2024 (7) TMI 305 - HC - Central Excise

Appropriation of the rebate claim towards tax liability of the petitioner - Section 11B of the Central Excise Act, 1944 r/w Rule 18 of the Central Excise Rules, 2002 - HELD THAT - As far as the Order in Original is concerned, the Tribunal had set aside the order passed by the Appellate Commissioner. Pursuant to the aforesaid order in E/734/2010, the petitioner opted to settle the dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019. The petitioner has discharged the liability under the aforesaid Scheme and therefore, the petitioner seeks direction to refund the amount of Rs. 5,26,662/- appropriated towards part of the liability confirmed vide Order in Original No. 1669 of 2009 dated 11.11.2009 - As far as the appropriation of amount of Rs. 51,972/- towards tax liability of Rs. 1,63,778/- vide Order in Original No.8 of 2011-ST is concerned, the petitioner had preferred an appeal before the Appellate Commissioner vide Order in Appeal No.152 of 2010 dated 26.08.2010. Thus, the Tribunal had remanded the case back to the Original Authority and that the petitioner has settled the dispute under the SVLDRS Scheme, 2019 and discharge certificate in Form-4 has also been issued to the petitioner by the Designated Authority on 29.01.2021. Thus, the liability of the petitioner has been either dropped or squared up under the SVLDRS Scheme. Therefore, the appropriation made pursuant to the aforesaid order is liable to be set aside. The respondents are directed to refund the amount that was sanctioned by the Rebate Sanctioning Authority together with applicable interest under Section 11(b) of the Central Excise Act, 1944 to the petitioner - petition allowed.

Summary

Issues: Challenge to order in appeal regarding rebate claim appropriation towards tax liability, rejection of appeal, settlement under Sabka Vishwas Scheme, refund of appropriated amount.

Analysis:
The petitioner challenged the Order in Appeal No. 77/2014 dated 22.08.2014, where the third respondent rejected the petitioner's appeal against Order in Original No.11/2014-R dated 12.02.2014. The rebate claim of Rs. 6,41,416/- made by the petitioner was scrutinized and Rs. 5,78,634/- was sanctioned under Section 11B of the Central Excise Act, 1944. However, this amount was appropriated towards the petitioner's tax liability under previous orders. The Tribunal had set aside the Orders in Original, leading to the petitioner settling the dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The petitioner sought direction for the refund of Rs. 5,26,662/- appropriated towards the liability confirmed under Order in Original No. 1669 of 2009.

Regarding the appropriation of Rs. 51,972/- towards a tax liability of Rs. 1,63,778/- under Order in Original No.8 of 2011-ST, the petitioner's appeal before the Appellate Commissioner was rejected, but succeeded at the CESTAT level. The Tribunal set aside both the liabilities under Order in Original No.1669 of 2009 and Order in Original No.8 of 2011-ST Adjn. The Tribunal remanded the case back to the Original Authority for the demand confirmed under Order in Original No.1669 of 2009. The petitioner settled this demand under the SVLDRS Scheme, 2019, and a discharge certificate was issued. Consequently, the appropriation made pursuant to the order needed to be set aside.

In conclusion, the Writ Petition was allowed, and the respondents were directed to refund the sanctioned amount with applicable interest under Section 11(b) of the Central Excise Act, 1944 to the petitioner. No costs were awarded in this matter.