2024 (6) TMI 298 - AT - Central Excise

Clandestine removal - refund of amount paid under protest - HELD THAT - It is found that initially demand of duty amounting to Rs. 46,96,664/- along with interest and penalty was confirmed by both the authorities below against which the appellant filed the appeal and the Tribunal vide order dated 24.08.2016 allowed the appeal of the appellant with consequential relief. It is a fact that during the investigation, the appellant deposited Rs. 15,45,000/- and after the decision of the Tribunal filed a refund claim which was sanctioned but thereafter a show cause notice dated 18.05.2017 was issued proposing to recover the erroneous refund of Rs. 15,45,000/-. The appellant paid the duty amouting to Rs. 46,97,000/- under protest by debiting the Cenvat credit account in order to avoid interest liability in future if the department succeeds before the Hon ble High Court of Punjab and Haryana - Subsequently, the department on 20.09.2018 withdrew its appeal on monetary grounds and the appellant after the withdrawal of the appeal by the department filed the refund claim which was rejected wrongly by both the authorities, by observing that the appellant had debited Cenvat credit account just to encash the same. Once, the decision of the Tribunal attained finality the appellant is entitled to claim refund Rs. 46,97,000/- which was deposited by him under protest by debiting RG-23A. The appellant is entitled to refund of Rs. 46,97,000/- on the basis of the order passed by the Tribunal dated 24.08.2016; therefore, the impugned order is set aside - appeal allowed.

Summary

Issues involved: Appeal against rejection of refund claim u/s Central Excise Tariff Act, 1985; Challenge to impugned order dated 25.03.2023; Withdrawal of appeal by department from Hon'ble High Court; Rejection of refund claim by adjudicating authority; Appellant's entitlement to refund.

The appellant, engaged in manufacturing re-rolled products of Iron & Steel, received a show cause notice alleging clandestine receipt of inputs and subsequent clearance of final products without duty payment. After various proceedings, including appeal to the Tribunal, a refund claim of Rs. 15,45,000/- was allowed/sanctioned. Subsequently, a show cause notice was issued for recovery of the sanctioned refund, leading to the appellant debiting Rs. 46,97,000/- under protest to avoid interest liability pending department's appeal challenge to the Tribunal's order (24.08.2016). The department later withdrew its appeal, prompting the appellant to file a refund claim of Rs. 62,42,000/-, including the earlier sanctioned amount. However, the refund claim was rejected, leading to the present appeal against the impugned order dated 25.03.2023.

The appellant contended that the impugned order failed to appreciate the facts and law, emphasizing the Tribunal's previous order allowing the appeal with consequential relief. The appellant argued that the duty amount was deposited under protest upon department's appeal challenge, which was later withdrawn, rendering the Tribunal's order final. The appellant asserted the right to claim the deposited amount as a refund, disputing the department's objection to the Cenvat credit utilization without issuing a show cause notice.

After considering submissions, the Tribunal found that the duty demand was initially confirmed but later set aside by the Tribunal's order dated 24.08.2016. The appellant's deposit under protest and subsequent refund claim were in response to the department's appeal challenge, which was later withdrawn. The Tribunal concluded that the appellant was entitled to the refund of Rs. 46,97,000/- deposited under protest, based on the finality of the Tribunal's order dated 24.08.2016. Consequently, the impugned order was set aside, and the appellant's appeal was allowed for the refund amount, with any consequential relief as per law.