2024 (6) TMI 1188 - HC - Customs

Refund claim - demand of cost recovery charges set aside - whether the Tribunal could have confirmed the order passed by the Commissioner (Appeals) granting the refund pursuant to the order passed by the Tribunal on merits by which the demand of cost recovery charges was set aside? - HELD THAT - The appellate-revenue is bound by the Circular dated 22.2.2001 issued by the Central Board of Excise Customs which has repeatedly clarified that if any refund arises out of any order of adjudication passed by the Commissioner or CESTAT, unless the stay order is obtained, refund must be granted after three months from the date of the order. The Tribunal has also referred to and relied upon CBEC Circular No. 572/9/2001-CX dated 22.2.2001 to reject the appeal filed by the revenue challenging the order passed by the Commissioner granting the refund to the respondent. The appeal is devoid of any merits that no questions of law much less any substantial questions of law arises from the impugned order of the Tribunal. Appeal dismissed.

Summary

Issues:
1. Interpretation of Customs Act, 1962 regarding granting refunds based on tribunal orders.
2. Validity of granting refunds without a stay order from a higher forum.
3. Applicability of CBEC Circular No. 572/9/2001-CX dated 22.2.2001 in refund cases.

Analysis:
1. The appeal under Section 130 of the Customs Act, 1962 raised substantial questions of law regarding the Tribunal's decision to grant a refund to the respondent based on a previous order without considering the pending appeal before the High Court. The primary issue was whether the Tribunal had the authority to grant the refund despite the pending appeal against the order. The main contention was whether the Tribunal erred in not considering the pending appeal and solely relying on its previous order.

2. The appellant argued that since the order setting aside the demand of cost recovery charges was challenged through an appeal, the Commissioner and the Tribunal should not have granted the refund without a stay order from the higher forum. However, the Court disagreed with this argument. The Court referred to the Circular dated 22.2.2001 issued by the Central Board of Excise & Customs, which mandates that refunds arising from adjudication orders must be granted after three months from the date of the order unless a stay order is obtained. The Tribunal also relied on CBEC Circular No. 572/9/2001-CX dated 22.2.2001 to reject the appeal filed by the revenue challenging the refund granted to the respondent.

3. The Court concluded that the appeal lacked merit as it did not raise any substantial questions of law. The Court emphasized that the appellant-revenue is bound by the Circular issued by the Central Board of Excise & Customs regarding the grant of refunds following adjudication orders. Therefore, the Court dismissed the appeal, affirming the Tribunal's decision to grant the refund to the respondent based on the previous order.