2005 (10) TMI 199 - AT - Central Excise

Summary

Issues: Refund of duty deposited during pendency of appeal, refusal of consequential relief, rejection of reference application by High Court

Refund of duty deposited during pendency of appeal:
The Tribunal addressed the issue of refund of duty deposited by the appellants during the pendency of their appeal. The Commissioner (Appeals) initially refused to grant consequential relief, citing the pending application filed by the department under Section 35H of the Central Excise Act with the High Court. However, the Tribunal emphasized the settled law that refund of pre-deposit made during the appeal process should be granted upon success of the appeal before higher appellate authorities. The Tribunal referred to the decision in the case of Sheela Foam Pvt. Ltd. and Circular No. 275/37/2K-CX.8A, emphasizing that such refunds must be granted as per the Board's directive, which is binding on authorities. The Tribunal noted that there was no stay of operation of its order, compelling the authorities to provide the refund.

Refusal of consequential relief:
The Commissioner (Appeals) had refused to grant consequential relief on the grounds of the pending reference application before the High Court. However, the Tribunal highlighted that the rejection of the reference application by the High Court on a later date entitled the appellants to the refund of duty deposited during the appeal process. The Tribunal set aside the impugned order and allowed the appeal in favor of the appellants.

Rejection of reference application by High Court:
The Tribunal noted that the reference application filed by the Revenue had been rejected by the High Court of Bombay in an order dated 17-2-2005. This rejection, combined with the settled law on refund of pre-deposits during appeals, led the Tribunal to conclude that the appellants were indeed entitled to the refund of duty deposited by them during the pendency of their appeal. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellants, emphasizing the lack of stay on the Tribunal's order as a key factor in granting the refund.