2023 (6) TMI 1239 - AT - Central Excise

Refund of Cenvat credit - Sugar cess - rejection on the only ground that the matter is pending and has not attained finality - HELD THAT - The appellant has produced records, to show that the appeal filed by the revenue against the Tribunal s order dated 07.08.2019 is pending before the Hon ble High Court at Calcutta in CEXA 9/2020 and there has been no orders passed by the Hon ble High Court granting stay of operation of the said order of the Tribunal. The revenue department has not been able to produce any document to show that the order has been stayed by any higher authority. Under this factual background, both the lower authorities were not correct in rejecting the refund claim of the appellant on the ground of pendency of proceedings when no stay has been given by any higher court in the earlier order regarding eligibility of Cenvat credit. It is further noted that the Ld. Commissioner (Appeals) had also passed orders on various other grounds which was never alleged while issuance of the show cause notice and thus the appellate order to that extent goes beyond the allegations raised in the SCN and cannot be sustained on this ground also. Appeal allowed.

Summary

Issues involved:
The judgment involves the issue of entitlement to refund of Cenvat credit of Sugar cess, rejection of refund application, pendency of proceedings, and applicability of CBIC Circulars.

Entitlement to refund of Cenvat credit of Sugar cess:
The appellant, an authorized bottler of Coco Cola, claimed Cenvat credit of Sugar cess in its ER 1 return for June 2017. The department rejected the refund claim on the ground of pendency of proceedings without any stay order from a higher court. The Tribunal found that the rejection was incorrect as no stay had been granted by the Hon'ble High Court, and the appellant was entitled to the refund as per CBIC Circulars. The judgment emphasized the need to follow judicial discipline to avoid unnecessary litigation.

Rejection of refund application:
The department issued a Show Cause Notice (SCN) questioning the refund claim, which was later rejected by the lower authorities based on grounds not mentioned in the SCN. The Tribunal held that such additional grounds beyond the SCN's scope cannot be sustained, and the rejection was unjustified.

Pendency of proceedings:
The department contended that the Tribunal was not competent to hear the appeal based on a previous judgment. However, the Tribunal clarified that the present issue did not deal with the same subject matter and proceeded to pass the order on merits, emphasizing that the appeal could be heard and disposed of by the Tribunal.

Applicability of CBIC Circulars:
The Tribunal relied on CBIC Circulars to support the appellant's entitlement to the refund of Sugar cess. It highlighted the importance of following the Circulars to avoid unnecessary litigation and emphasized the need for strict adherence to legal procedures in such cases.

The judgment, pronounced on 26 June 2023 by HON'BLE SHRI P. K. CHOUDHARY and HON'BLE SHRI K. ANPAZHAKAN, allowed the appeal of the Appellant, granting consequential benefits as per law.