2018 (11) TMI 821 - AT - Central Excise

Refund of Excise duty paid during investigation - rejection of refund on the ground that the appellant has not debited the PLA with the amount of ₹ 25 lakhs an debited the same in April, 2017 only and thus, refund claim filed on 23.02.2017 is premature - Held that - The first appellate authority has not considered the issue holistically, as it is on record and admitted, Order-in-Original No. 34/2009 dated 30.10.2009 confirmed demands raised by the appellant contained in the order portion, an appropriation of amount of ₹ 25 lakhs already paid by the appellant - If an amount of ₹ 25 lakhs stands appropriated on 30.10.2009, the case made out by the revenue that appellant had not debited amount in PLA and hence not eligible for refund is totally incorrect proposition. The adjudicating authority is directed to sanction refund of ₹ 25,00,000/- immediately - appeal allowed - decided in favor of appellant.

Summary

Issues: Refund claim rejection of ?25 lakhs.

Analysis:
1. The appeal was against an order dated 19.02.2018. The appellant, a manufacturer of electrical fans, faced charges of irregular CENVAT credit availment in 2007. They deposited ?25 lakhs during investigation, and a penalty of ?16 lakhs was imposed. The adjudicating authority confirmed the demands and penalties. The first appellate authority upheld the order, leading to an appeal to the Tribunal. The Tribunal set aside the order and allowed appeals with consequential relief. The appellant then filed a refund claim for ?43,96,019, but it was restricted to ?18,96,019 by the lower authorities, rejecting the ?25 lakhs claim.

2. The first appellate authority rejected the refund claim of ?25 lakhs stating it was premature as the amount was not debited in the PLA until 2017. The appellant argued that the amount was credited to the Government account in 2007, as evidenced by bank certificates. They cited previous Tribunal decisions supporting their claim for refund based on payment realization. The departmental representative contended that the amount was not debited in the PLA, making the refund premature.

3. The main issue was the rejection of the ?25 lakhs refund claim due to non-debiting in the PLA until 2017. The first appellate authority's decision was based on this premise. However, the appellant provided evidence of the amount being credited to the Government account in 2007. The Tribunal found the lower authorities erred in not sanctioning the refund claim based on overwhelming evidence of payment to the Government Treasury. Consequently, the impugned order was set aside, and the appellant's appeal was allowed with directions to sanction the refund of ?25,00,000 immediately.