2016 (9) TMI 1101 - HC - Central Excise

Refund claim - seeking direction to refund a sum together with interest at the rate of 6% from the date of deposit till the date of payment - stay granted on the condition that the petitioner pays a sum of ₹ 15,00,000/- - Held that - the amount which has been paid by the petitioner is not strictly in the sense of pre-deposit, but it may be akin to one, as the same has been done pursuant to the interim order granted by the Division Bench of this Court. Having succeeded before the Division Bench, the petitioner is entitled to refund of the amount deposited. So far as the interest portion is concerned, the petitioner has referred to circular which contemplates the payment of interest when pre-deposit is effected and the assessee succeeds in the appeal. There is no reason as to why such condition should not be imposed in the instant case also because what was deposited by the petitioner is akin to a pre-deposit as it has been done pursuant to the order passed by the Division Bench of this Court. Therefore, the present writ petition is disposed of by directing the respondent to consider the documents placed by the petitioner namely, the payment voucher and the information regarding the challan status as culled out from the website of the department and verify the records maintained by the department and thereafter, effect refund of the amount paid by the petitioner. So far as the demand for interest at the rate of 6% is concerned, the respondent is directed to take note of the law as pointed out in the preceding paragraphs and pass orders on merits and in accordance with law. - Petition disposed of

Summary

Issues:
Challenge to show cause notice and refund claim of deposited amount with interest.

Analysis:
The petitioner challenged a show cause notice issued by the respondent and sought a direction to refund a sum of ?15,00,000 with 6% interest. The petitioner had complied with a conditional order of stay by paying the said amount in two installments. The Division Bench of the Court allowed the petitioner's appeal, setting aside the order by CESTAT. The petitioner then requested a refund of the amount paid. The respondent sought details from the bank regarding the payment but issued a show cause notice before clarifications were provided.

The petitioner cited Circular No.984/08/2014, stating that a simple letter from the depositor suffices for refund in case of pre-deposit. The Circular also allows for interest on the refunded amount. The respondent argued that the refund process must follow legal procedures, requiring submission of relevant documents like the GAR challan. The Court noted that the payment made by the petitioner, though not strictly a pre-deposit, was akin to one due to the interim order. The petitioner's ability to produce the tax paid voucher and challan status from the department's website supported the refund claim.

The Court found the GAR challan unnecessary as the petitioner had provided sufficient evidence of payment. Refund verification could be done through departmental records. Citing Circular provisions for interest on successful appeals, the Court emphasized that the petitioner was entitled to interest on the refunded amount. Reference was made to a Supreme Court decision and other court judgments supporting the petitioner's claim for refund and interest.

The Court directed the respondent to consider the payment voucher and challan status information provided by the petitioner, verify departmental records, and proceed with the refund. The respondent was instructed to adhere to legal provisions regarding interest payment on the refunded amount. The writ petition was disposed of accordingly, with no costs incurred.