2024 (8) TMI 1144 - AT - Central Excise

Adjustment of refund against duty demand - Refund of additional amount deposited based on High Court order - HELD THAT - Going back to the legality of issue of adjustment of refund against duty demand, that has become infructuous in view of the order passed by the Hon'ble Supreme Court as no amount, by way of reversal of CENVAT Credit on removal of capital goods, is held to be payable after the same is paid on its depreciated value. What remains here to be seen is that on the basis of Appellant s request letter dated 12.12.2023 the entire amount of ₹18,38,774/- (13.5 lakhs 4.88 lakhs paid earlier) is required to be refunded to the Appellant within 15 days of receipt of such request letter in view of Board Circular dated 10.03.2017, falling which interest under Section 11BB is also payable but as could be noticed here, no order was passed by the Refund Sanctioned Authority in that respect. The most important point that would be required to be determined by this forum is concerning its jurisdictional competency to deal with such an issue that occurred subsequent to passing of order by the Commissioner (Appeals), which is assailed herein. This Tribunal which has denied the relief granted by the Commissioner (Appeals) to the Appellant, is duty bound to enforce the order passed by the Hon'ble Supreme Court as contained in order 2(a) of the said Enforcement Order 1954 and therefore, in exercise of the power conferred on this Tribunal under Rule, 41 of the CESTAT (Procedure) Rules, 1982, that provides in a way for implementation of order. Appellant is entitled to get refund of payment of ₹18,38,774/- against demand raised for inadmissible credit taken by the Appellant alongwith applicable interest and for this purpose the order passed by the Commissioner (Appeals) is hereby set aside - Appeal allowed.

Summary

Issues:
1. Adjustment of refund against outstanding duty dues and interest confirmed by Tribunal and High Court.
2. Refund of additional amount deposited based on High Court order.
3. Legality of adjustment of sanctioned refund against duty due.
4. Jurisdictional competency of the Tribunal to deal with post-Commissioner (Appeals) order issue.

Analysis:
1. The Appellant challenged the adjustment of the entire refund amount of Rs. 13,50,000 against outstanding duty dues and interest confirmed by the Tribunal and High Court. The dispute arose from the denial of Service Tax paid on inputs, which was set aside by the Tribunal, leading to the accrual of the refund amount. Additionally, an additional amount of Rs. 4,88,774 deposited based on a High Court order was also sought to be refunded by the Respondent-Department.

2. The Appellant, a manufacturer of plastic laminated tubes, was involved in a complex dispute regarding the refund of CENVAT Credit on excise duty paid for capital goods. The dispute involved multiple stages of confirmation and setting aside of demands by various authorities, including the Adjudicating Authority, Appellate Authority, Tribunal, and High Court. The Appellant was granted a refund of Rs. 13,50,000 in another proceeding, which the Refund Sanctioning Authority proposed to adjust against confirmed duty dues. The Appellant contested this adjustment, citing an appeal before the Supreme Court, which subsequently ruled in favor of the Appellant.

3. The Tribunal, after considering submissions from both sides, concluded that the issue of adjustment of refund against duty demand became infructuous following the Supreme Court's order. The Tribunal highlighted the necessity of refunding the entire amount of Rs. 18,38,774 (Rs. 13.5 lakhs + Rs. 4.88 lakhs) to the Appellant within 15 days of the request letter, failing which interest under Section 11BB would be payable. The Tribunal invoked the Supreme Court (Decrees and Orders) Enforcement Order, 1954, to enforce the Supreme Court's decision and set aside the Commissioner (Appeals) order justifying the adjustment.

4. The Tribunal, in exercising its power under Rule 41 of the CESTAT (Procedure) Rules, 1982, allowed the appeal and directed the refund of the payment against the demand for inadmissible credit taken by the Appellant, along with applicable interest. The Tribunal emphasized compliance with the relief accrued after the Supreme Court's order within a month of the Tribunal's order.