2024 (9) TMI 399 - AT - Central Excise

Refund of pre-deposit - clandestine production and clearance of mild steel ingots on the basis of investigation conducted by the Central Excise authorities, Nagpur - HELD THAT - The existing mission of Central Board of Excise Customs (CBEC) is, inter alia, to provide an efficient system by realizing revenue in a fair, equitable, transparent and efficient manner, it is a necessary responsibility for the field formation of CBEC-tax department, to lay down the specific ground on which the pre-deposit paid, is either eligible or not eligible to the assessee as refund. Inasmuch as the basic details produced by the appellant have not been verified to come to a conclusion, whether such pre-deposit can be refunded or not in terms of the legal provisions of Central Excise Act, 1944, there is a need that such exercise is to be undertaken by the jurisdictional authorities. Hence, for the limited extent of verification of the documents submitted in support of the claim for having made the pre-deposit by the appellant and to decide the issue of refund of pre-deposit of Rs.24 lakhs, it is deemed necessary to remand the case back to the original authority for fresh fact finding and for passing a speaking order. Interest from the date of deposit till the date of refund - HELD THAT - The issue has been examined in detail and considering the factual position that the refund has been granted within three months time in respect of the sanctioned amount of Rs.2,50,61,298/-, there are no infirmity in the order passed by the Commissioner (Appeals). The impugned order is modified to the extent of allowing the appeal filed by the appellant in respect of refund of Rs.24 lakhs to be subjected to a process of verification in the de novo proceedings by the original authority.

Summary

Issues Involved:
1. Refund of pre-deposit amount.
2. Payment of interest on pre-deposit.
3. Verification of pre-deposit amount claimed by appellant.
4. Legal substantiation of pre-deposit payments.

Detailed Analysis:

1. Refund of Pre-Deposit Amount:
The appellant sought a refund of Rs. 24 lakhs paid as pre-deposit during the investigation period. The Tribunal had earlier set aside the orders confirming the duty demands, leading to the appellant's claim for a refund. The Assistant Commissioner of Central Excise, Nagpur, initially sanctioned a refund of Rs. 2,50,61,298/- but rejected Rs. 75,77,783/- as inadmissible. The Commissioner (Appeals) upheld this decision, stating that the appellant's claim for Rs. 24 lakhs was not substantiated by documentary evidence and was not connected to the impugned case. The Tribunal found that the pre-deposit amount was not reflected in the show-cause notice or adjudication proceedings, necessitating further verification by the jurisdictional authorities.

2. Payment of Interest on Pre-Deposit:
The appellant also sought interest on the pre-deposit amount from the date of deposit until the date of payment. The Assistant Commissioner sanctioned the refund but did not grant interest, as the refund was processed within the three-month period prescribed under Section 11B and 11BB of the Central Excise Act, 1944. The Commissioner (Appeals) agreed with this decision, and the Tribunal found no infirmity in the order regarding the non-payment of interest.

3. Verification of Pre-Deposit Amount Claimed by Appellant:
The appellant claimed to have paid Rs. 24 lakhs as pre-deposit, supported by TR-6 challans and letters addressed to the Department. The Tribunal noted that the jurisdictional Range Officer had verified the 25% duty amount but had not similarly verified the Rs. 24 lakhs claimed by the appellant. The Tribunal emphasized the need for the Department to verify these payments to determine their eligibility for a refund.

4. Legal Substantiation of Pre-Deposit Payments:
The Tribunal highlighted that any tax collection must be authorized by law. If the pre-deposit was not related to any specific excise duty or clearance of goods, it should be adjusted against the duty liability. The Tribunal remanded the case to the original authority for fresh fact-finding and a speaking order, allowing the appellant to produce relevant documents for verification.

Conclusion:
The Tribunal modified the impugned order to allow the appellant's appeal regarding the Rs. 24 lakhs refund, subject to verification in de novo proceedings by the original authority. The claim for interest on the sanctioned refund amount was dismissed, as the refund was processed within the statutory period. The case was remanded for further verification of the Rs. 24 lakhs pre-deposit.

(Order pronounced in open court on 04.09.2024)