2024 (11) TMI 119 - AT - Central Excise

Recovery of amount availed as excess refund - violation of condition of N/N. 56/2002-CE dated 14.11.2002 - HELD THAT - This issue is no more res integra as held in various decisions. This Tribunal in the case of M/s Pace Non Woven Fabric Products 2024 (8) TMI 201 - CESTAT CHANDIGARH has considered the identical issue and has held ' since the department has not challenged the refund sanctioned order till date and in the absence of challenge to the refund sanction order, the refund cannot be rejected as held by the Hon'ble Gauhati High Court in the case of CCE, Shillong vs. Jellalpur Tea Estate 2011 (3) TMI 11 - GAUHATI HIGH COURT . The impugned order is not sustainable in law and the same is set aside - appeal allowed.

Summary

Issues:
Appeal against rejection of refund claim under Notification No.56/2002-CE for alleged violation of conditions - Recovery of excess refund claimed - Challenge to refund sanction order - Sustainability of impugned order.

Analysis:
The judgment pertains to an appeal challenging the rejection of a refund claim under Notification No.56/2002-CE. The appellant had availed self-credit of duty paid but was alleged to have not considered year-end discounts while paying duty, leading to an excess refund claim. The department sought to recover the excess amount through a show cause notice, which was confirmed by the Commissioner (Appeals). The appellant contended that the impugned order ignored precedents and that the self-credit claimed was based on actual payments made. The appellant cited precedents where it was held that even if higher duty was paid, the refund could not be rejected if the duty paid was eligible for refund. Additionally, the appellant argued that since the department had not challenged the refund sanction order, the refund could not be rejected, as established in various cases, including decisions by the Tribunal and the Hon'ble Gauhati High Court.

The Tribunal, after hearing both parties and examining the records, found that the issue was settled by previous decisions. It referenced a case involving M/s Pace Non Woven Fabric Products where a similar issue was addressed, emphasizing that the refund could not be rejected if the refund sanction order was unchallenged. The Tribunal also highlighted the importance of following precedents and legal principles established in earlier cases. Consequently, the Tribunal concluded that the impugned order was unsustainable in law and allowed the appeal, setting aside the order with consequential relief, if any, as per the law.

In summary, the judgment addresses the issue of rejecting a refund claim under a specific notification due to alleged violations and the subsequent recovery of an excess refund claimed by the appellant. The appellant's arguments centered on the legality of the impugned order, citing precedents and principles that supported their position. The Tribunal, relying on established legal principles and previous decisions, found in favor of the appellant, setting aside the impugned order and allowing the appeal. This case underscores the importance of adhering to legal precedents and the significance of challenging refund sanction orders before seeking recovery.