2024 (5) TMI 8 - HC - Central Excise

Recovery of rebate claim - Adjusted rebate claims towards their existing liabilities - petitioner's eligibility for rebate on the exports made during months of March, 2013; July, 2011; December, 2011; October, 2011; and January, 2011 - HELD THAT - Although the Department succeeded before the Appellate Commissioner, vide Order-in-Appeal and the petitioner's revisions were dismissed on 31.03.2014 and recovery were ordered in terms of Order-in-Original, which stands confirmed by the Appellate Commissioner's Order-in- Appeal, the fact remains that these orders have been set aside and the case has been remitted back to the respondents to consider the issue afresh as far as rebate claim for Rs. 27,71,599/-. Thus, there is no demand that is remaining in force to be unenforced as on date for a sum of Rs. 27,71,599/-. There is no justification in adjusting the above said amount of Rs. 27,71,599/- from the rebates on exports made by the petitioner, which the petitioner is otherwise entitled to. Adjustments have been made against the respective Order-in-Original have already been given above. Hence, the amounts adjusted have to be refunded back to the petitioner together with interest. In case, in the remand proceedings, the petitioner is held ineligible for the rebate on the exports made by them in the month of April, 2012, the respondents can independently recover the amount from the date of other amount that may be refundable as on the date of the order to be passed by the Revisional Authority. These Writ Petitions are allowed.

Summary

Issues involved:
The petitioner challenged impugned orders adjusting rebate claims against liabilities and subsequent reversals. The main issue was the adjustment of sanctioned rebate claims against the petitioner's liability.

Details of the judgment:

Issue 1: Adjustment of rebate claims against liabilities
The petitioner exported goods and filed rebate claims under Rule 18 of the Central Excise Rules, 2002. The respondents allowed these rebate claims but adjusted the amounts against the petitioner's liability based on previous orders. The adjustment was made pursuant to Order-in-Original No.2 / 2014, dated 13.03.2014, which was confirmed by Order-in-Appeal No.52 / 2014, dated 20.08.2014.

Issue 2: Reversal of sanctioned rebate claims
The petitioner had earlier exported goods and filed rebate claims which were sanctioned by the respondents. However, the sanctioned amount was reversed by the Commissioner of Central Excise (Appeals) in Order-in-Appeal No.104 / 2013, dated 20.08.2013. This reversal led to the adjustment of the sanctioned amount in the impugned orders.

Issue 3: Judicial review and remand
The petitioner challenged the orders of the Revisional Authority and the Appellate Commissioner, which confirmed the adjustments. The High Court set aside these orders and remanded the case back to the Original Authority for fresh consideration. The Court held that there was no pending demand against the petitioner for the adjusted amount.

Conclusion:
The High Court allowed the Writ Petitions, stating that there was no justification for adjusting the sanctioned rebate amount against the petitioner's entitlement. The Court directed the refund of the adjusted amounts with interest and allowed independent recovery if the petitioner was found ineligible for rebate in the remand proceedings.