2018 (3) TMI 1372 - AT - Central Excise

Refund of the duty paid after issuance of SCN 4.2.2008 - the adjudicating authority rejected the refund claim on the premise that a SCN to demand duty was already issued to the appellant - Held that - Considering the fact that the demand of duty of ₹ 30,68,816/- has already set aside against the appellant vide order dated 29.10.2009 by the adjudicating authority and the appellant has paid duty after issuance of SCN dated 4.2.2008 - further, all the subsequent proceedings have been set aside by the Hon ble Punjab & Haryana High Court vide order dated 26.10.2010, therefore, the appellant is entitled to claim refund of the amount paid by them - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection, Duty payment on zinc sulphate, Show cause notices, Jurisdiction of High Court, Adjudication of refund claim

Refund Claim Rejection:
The appellant appealed against the rejection of their refund claim of ?30,68,816 filed on 3.8.2009 by the authorities below. The appellant, engaged in manufacturing zinc sulphate (agricultural grade), did not pay duty on the cleared zinc sulphate initially. A show cause notice was issued demanding duty for the period of clearance without payment. Subsequently, a notification under Section 11C of the Central Excise Act, 1944 exempted the duty on zinc sulphate clearance. The appellant paid the duty after the show cause notice and filed a refund claim. Another show cause notice was issued to deny the refund claim, leading to a legal battle.

Duty Payment on Zinc Sulphate:
The appellant was required to pay duty on zinc sulphate (agricultural grade) cleared without payment initially, as per the show cause notice. However, after paying the duty and filing a refund claim, subsequent legal proceedings ensued, including the issuance of another show cause notice challenging the refund claim.

Show Cause Notices:
Multiple show cause notices were issued to the appellant, initially demanding duty on zinc sulphate clearance without payment, and later challenging the refund claim. The appellant faced legal complexities due to these notices, leading to a prolonged adjudication process.

Jurisdiction of High Court:
The Hon’ble Punjab & Haryana High Court played a crucial role in the case, dropping one of the show cause notices issued to the appellant. The High Court’s intervention impacted the adjudication process and the subsequent rejection of the refund claim by the Commissioner (Appeals).

Adjudication of Refund Claim:
The adjudicating authority had initially set aside the demand for duty against the appellant. Subsequent legal proceedings and the involvement of the High Court led to the rejection of the refund claim. However, the Appellate Tribunal found in favor of the appellant, stating that all subsequent proceedings had been set aside by the High Court, entitling the appellant to claim the refund amount. Consequently, the impugned order rejecting the refund claim was set aside, and the appeal was allowed with consequential relief.