2023 (8) TMI 938 - AT - Central Excise

Relevant date of payment of interest - delayed sanction of refund of amount deposited towards duty and interest - HELD THAT - Both the parties agreed that the Order-in-Appeal dated 27/06/2019 passed by the Commissioner (Appeals) was not appealed against, when no appeal by revenue, this order has become final even if the said order was erroneous or that view was possible in the matter. It is settled law that the Assistant Commissioner was bound by the order of the higher Appellate Authority and if he had taken any view contrary to the above said order, the said order would have passed in contempt of the order of the Commissioner (Appeals) which is contrary to the principle of judicial discipline as enunciated by the Hon ble Supreme Court in Union of India Vs M/s Kamlakshi Finance Corporation Ltd. 1991 (9) TMI 72 - SUPREME COURT - there are no error in the order of the Original Authority granting refund as directed by the order of the Commissioner (Appeals) which has acquired finality. He has taken all the necessary precautions before granting the refund, by making necessary enquiries with the review branch of Commissionerate and getting the refund pre-audited. It is a settled law that once an order has not been challenged before appropriate authority it cannot be reopened and challenged in collateral proceedings subsequently by the same authority. There are no merits in the impugned order and the same is set aside - appeal allowed.

Summary

Issues involved:
The issues involved in this legal judgment include the payment of interest on duty deposited, interest on penalty, and interest on interest. The judgment also addresses the refund of amounts deposited towards duty and interest, as well as the penalty imposed.

Payment of interest on duty deposited:
The appellant, engaged in the manufacture of Absorbent Cotton Wool, was directed to pay a demand of Rs 64,04,685/- along with interest and penalty. The Order-in-Appeal dated 27/06/2019 allowed a refund of Rs.16,01,171/- deposited towards penalty along with applicable interest. The Assistant Commissioner, in compliance with the appellate order, sanctioned the refund. The Revenue challenged this order, but the Commissioner (Appeals) modified the original authority's decision. The appellant contended that the original order was compliant with the appellate order, which had attained finality. The Tribunal held that the Assistant Commissioner was bound by the appellate order, and any contrary view would be against the principle of judicial discipline. The Tribunal found no error in the original authority's decision to grant the refund as directed by the appellate order.

Interest on penalty and interest on interest:
The judgment also addressed the interest paid on the penalty amounting to Rs 3,28,218/- and the interest paid on the deposit of Rs 22,61,177/-. The impugned order set aside the Assistant Commissioner's decision to grant interest on the duty deposited from a date earlier than three months after 30.07.2018. The Tribunal found that the interest paid on the penalty and interest upon interest was not supported by any provision of law and thus liable to be recovered from the appellant. The Commissioner (Appeals) modified the original authority's order, leading to the Revenue filing an appeal, which was subsequently allowed by the Tribunal.

Refund of amounts deposited towards duty and interest:
The Assistant Commissioner, in compliance with the appellate order, sanctioned a refund of Rs 16,01,171/- along with interest amounting to Rs 16,41,489/- and an additional amount of Rs 3,28,218/-. The Revenue challenged this order, but the Commissioner (Appeals) modified the original authority's decision. The Tribunal, after considering the facts and submissions, held that the original authority's decision to grant the refund as directed by the appellate order, which had attained finality, was correct. The Tribunal emphasized that once an order has not been challenged before the appropriate authority, it cannot be reopened in subsequent proceedings.

Conclusion:
The Tribunal allowed the appeal, setting aside the impugned order. The judgment highlighted the importance of upholding appellate decisions and the principle of judicial discipline. The Tribunal emphasized that once an order has attained finality, it cannot be challenged in collateral proceedings. The judgment provided references to legal precedents supporting the finality of appellate orders and the hierarchy of authorities in the adjudication process.