2019 (12) TMI 541 - AT - Central Excise

Appropriation of refund - Revenue is aggrieved by the sanction of ₹ 20,12,525/-, which is sought to be reversed - also aggrieved by the sanction of ₹ 30,00,000/- though partially appropriated - HELD THAT - No appeal had been filed by Revenue before the first appellate authority against the sanction of ₹ 30,00,000/-. Accordingly, that sanction cannot be agitated before the Tribunal in an appeal arising from a decision of the first appellate authority on challenge by the assessee. It is seen that the sanction of ₹ 20,12,525/- is a consequence of the finding by the first appellate authority that such deposit had been effected in relation to the show cause notice dated 5th March 2009. Those proceeding culminated in the order of the first appellate authority dated 6th September 2010 setting aside the demand. As the order of the first appellate authority which led to sanction of refund in the impugned order is non-existent and the show cause notice requires fresh disposal, the interim deposit should stand restored - appeal by way of remand for deciding eligibility only in relation to the claim for ₹ 20,12,525/-.

Summary

Issues:
1. Appropriation of funds by the original authority
2. Rejection of refund claim by the first appellate authority
3. Appeal against the sanction of funds by the Revenue
4. Remand of the matter to the original authority

Analysis:
1. The appeal was filed against the order-in-appeal dated 5th August 2011, which upheld the appropriation of funds amounting to ?26,86,071 from the sanctioned amount of ?30,00,000 by the original authority. The appellant sought a refund of ?20,12,525 that had been deposited before and after the issue of a show cause notice. The first appellate authority confirmed the appropriation, leading to the rejection of the refund claim. The appellant contested this decision before the Tribunal, arguing that the matter should be remanded back to the original authority as the duty dispute was pending fresh adjudication.

2. The Tribunal noted that the Revenue was aggrieved by the sanction of the refund amount and the partial appropriation of funds. However, since the Revenue had not appealed against the sanction of ?30,00,000 before the first appellate authority, it could not challenge it before the Tribunal. The sanction of ?20,12,525 was linked to a show cause notice dated 5th March 2009, which was set aside by the first appellate authority in a subsequent order. As the order setting aside the demand was non-existent and the show cause notice required fresh disposal, the Tribunal decided to set aside the impugned order and remand the matter for determining the eligibility only in relation to the claim for ?20,12,525.

3. In conclusion, the Tribunal allowed the appeal by way of remand, emphasizing the need for a fresh determination of the eligibility for the refund amount of ?20,12,525. The decision highlighted the procedural irregularities and the importance of aligning the sanction of funds with the outcome of the appellate proceedings and the pending duty dispute for a fair and just resolution.