2017 (11) TMI 1174 - AT - Central Excise

Refund of amount deposited - In order to avail the course of appellate remedy appellant deposited the amounts confirmed and preferred an appeal before the First Appellate Authority - Held that - During the pendency of the proceedings, they had deposited the duty liability interest and part of the amount as penalty. On successful litigation on before the Hon ble High Court of Delhi, they rightfully claimed the amount paid/deposited by them with the authorities. In my view, the First Appellate Authority was correct in coming to a conclusion that the amounts which were deposited by the appellant are refundable. It is settled law that amount paid on the insistence of the Revenue and the matter is successfully contested in higher judicial forum it has to be considered that the assessee has deposited the amount under protest. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Classification of goods for Central Excise duty.
2. Refund claim rejected on the ground of limitation.
3. Applicability of time bar for refund claim.

Analysis:
1. The appeal involved a dispute over the classification of "Branded Chewing Tobacco" for Central Excise duty. The appellant classified the product as un-manufactured, while the show cause notice alleged it should be classified as manufactured. The Adjudicating Authority confirmed demands for duty, interest, and penalties. The First Appellate Authority upheld the classification but set aside the demands based on limitation. The Tribunal dismissed the appeal of the Department, holding the demands beyond the limitation period. The High Court dismissed the Revenue's appeal on merits. The appellant filed a refund claim after the High Court's order, which was initially rejected by the Adjudicating Authority but allowed by the First Appellate Authority.

2. The Department argued that the refund was not due as the duty liability had to be discharged by the appellant. They relied on a previous Tribunal decision and contended that the deposited amount could not be considered voluntary. However, the Tribunal found that the appellant had contested the demands on both limitation and merits, deposited the amounts during the proceedings, and rightfully claimed a refund after the High Court's decision. The Tribunal held that the deposited amounts were refundable, as the appellant had paid under protest and successfully litigated the matter.

3. The issue of time bar for the refund claim was raised, with the Department arguing that the claim was filed after a significant delay from the relevant date prescribed by law. The Tribunal considered various legal precedents cited by the appellant and held that the issue of time bar could not be raised at the appeal stage since it was not included in the show cause notice or adjudication order. The Tribunal concluded that the grounds for rejecting the refund claim did not hold legal scrutiny and upheld the First Appellate Authority's decision to allow the refund.

In conclusion, the Tribunal rejected the appeal filed by the revenue, finding no merits in their arguments, and upheld the decision to allow the refund claim to the appellant.