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Issues:
Refund claim rejection based on pending appeal before Tribunal. Analysis: The petition challenged the Assistant Collector's order denying a refund claim of Rs. 2,71,835.05 due to a pending appeal before the Tribunal. The petitioners had initially faced demands confirmed by the Assistant Collector, leading to an appeal before the Commissioner (Appeals). To comply with Section 35F of the Act, they deposited refund amounts on various dates. Eventually, the appeal was allowed, setting aside the demands. Subsequently, the Revenue appealed to CEGAT, but their appeal was rejected, nullifying the earlier demand confirmation. The petitioner contended that the refund rejection reason was no longer valid post the CEGAT order, citing precedents like Nelco Co. Ltd. v. Union of India. These judgments established that deposits under Section 35F were security, not duties, and were refundable upon appeal resolution. With the appeal concluded, the petitioner argued they were entitled to the refund. The respondents, invoking Section 11B(2) of the amended Act, opposed the refund, suggesting the need to verify if the amounts were collected from customers. However, as the deposited amounts were security, not collected funds, Section 11B did not apply. Consequently, the impugned order rejecting the refund was quashed, affirming the petitioner's entitlement to the refund. Given the undertaking to repay in case of an adverse judgment, no further relief or payment direction was necessary, and the petition was disposed of without costs.
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