Custom, Excise & Service Tax Tribunal
Ce & Cgst Greater Noida, Noida -Ii vs Rmg Polyvinyl India Ltd on 21 October, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Excise Appeal No.70195 of 2024
(Arising out of Order-in-Appeal No.NOI-EXCUS-002-APP-167-168-22-23 dated
25/08/2022 passed by Commissioner (Appeals) Central Goods & Service Tax,
Noida)
Commissioner of Central Goods &
Service Tax, G.B. Nagar .....Appellant
(3rd Floor, Wegmans Business Park,
KP-III, Greater Noida)
VERSUS
M/s RMG Polyviny India Ltd., ....Respondent
(10/1, Industrial Area,
Sikandrabad, Bulandshahar-203205)
APPEARANCE:
Shri Sandeep Pandey, Authorised Representative for the Appellant
Shri Rajesh Chhibber, Advocate for the Respondent
CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL)
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
FINAL ORDER NO.70669/2024
DATE OF HEARING : 19 July, 2024
DATE OF PRONOUNCEMENT : 21 October, 2024
SANJIV SRIVASTAVA:
This appeal filed by the revenue is directed against Order-
in-Appeal No.NOI-EXCUS-002-APP-167-168-22-23 dated
25.08.2022 of Commissioner, CGST (Appeals), Noida. By the
impugned order, order in original No 03/R/AC/DIV-BSR/GBN/21-
22 dated 07.09.2021 holding as follows have been upheld
rejecting the appeals filed by both appellant and respondent:
ORDER
1. I hereby sanction the refund of Rs. 78,26,385/- (Rupees Seventy Eight Lakh Twenty Six Thousand Three Hundred and Excise Appeal No.70195 of 2024 2 Eighty Five only) and the amount of interest of Rs.30,05,247/- (Rupees Thirty Lakh Five Thousand Two Hundred and Forty Seven Only) . The payment shall be made electronically through RTGS/NEFT as per account details provided by them in terms of Circular No. 1013/1/2016-CX dated 12.01.2016 enforced through Trade Notice No. 02/N- 11/2016 dated 15.02.20 16.
2. I hereby reject refund claim of Rs 10,53,750/- (Rupees Ten Lakhs Fifty Three Thousand Seven Hundred and Fifty only). 2.1 Respondent was issued SCN dated 12.10.2012 for confiscation of goods and penalty and other SCN dated 26.04.2013 along with other 33 co-noticees for demand of Central Excise Duty and imposition of penalty. 2.2 Thereafter, they filed application dated 19.12.2014 in Settlement Commission for settlement of the dispute arising out of the show cause notices and made deposit of Rs. 41,30,080/- and Rs. 26,18,555/-. The Settlement Commission sent back the case to adjudicating authority to adjudicate the case in accordance with the provisions of law.
2.3 The show casue notices were adjudicated as per order in original No. 46-47/COMMISSIONER/NOIDA-II/2016-17 dated 31.12.2016 confirming the demand of Rs. 4,10,95,030/- along with imposition of penalty on the respondent and 33 co- noticees.
2.4 Aggrieved by the said order dated 31.12.2016, the respondent and co-noticees preferred appeal before Hon'ble CESTAT, Allahabad. The CESTAT vide order No. A/70670- 70703/2017-EX (DB) dated 11.05.2017 allowed the appeals with consequential relief.
2.5 The, respondent filed two refund applications dated 18.08.2021 for Rs..78,02,385/- and Rs. 10,77,750/- along with interest in terms of CBEC Circular No. 984/8/2014-CX dated 16.09.2014.
2.6 After scrutiny of the applications a SCN dated 01.09.2021 was issued to the asked the respondent to show cause as to why the refund amount of Rs. 10,50,000/- and Rs 3,750/- may not Excise Appeal No.70195 of 2024 3 be disallowed and rejected as the same was not mentioned in EA-3 Form filed before CESTAT, Allahabad and the same were not part of pre-deposit under Section 35F of the CEA, 1944. 2.7 The said SCN dated 01.09.2021 was adjudicated vide O-I- O No 03/R/AC/Div-BSR/GBN/21-22 dated 07.09.2021 wherein the adjudicating authority sanctioned refund of Rs. 78,26,385/- with interest of Rs. 30,05,247/- and rejected the claim of Rs. 10,53,750/- on the above mentioned accounts 2.8 Being aggrieved both revenue and respondents filed the appeal before Commissioner (Appeal). Both the appeals were disposed of by the impugned order.
2.9 Aggrieved by the impugned order revenue has filed this appeal stating following grounds:
That the party deposited Rs.67,48,635/- (Rs.41,30,080/ Rs.26,18,555/-) on 17.12.2014 after issuance of two Show Cause Notices. Adjudicating authority has granted interest under Section 35FF on entire amount of Rs.67,48,635/- since 17.12.2014 whereas the interest as per provisions under Section 35FF read with circular no. 984/08/2014-CX dated 16.09.2014 is payable since 01.03.2017 (date of filing of appeal in CESTAT) to 07.09.2021 i.e. date of grant of refund on amount Rs.30,82,127/ - which is equivalent to pre deposit ( @7.5% of demand amount Rs.4,10,95,030/-). Thus the interest on amount Rs.30,82,127/- for the period 17.12.2014 to 28.02.2017 has been paid in excess erroneously in contravention of provisions of Section 35F and 35FF That the circular no. 984/08/2014-CX dated 16.09.2014 issued by CBEC clarifies that amount paid over and above the amount stipulated under Section 35F of Central Excise Act,1944 shall not be treated as deposit under this section. It has also been clarified that any amount paid prior to filing of appeal takes colour of the deposit under Section 35F of the Central Excise Act, Excise Appeal No.70195 of 2024 4 1944 only when appeal is filed. Relevant para of the aforesaid circular are reproduced below- 3. Payment made during investigation: 3.1 Payment made during the course of investigation or audit, prior to the date on which appeal is filed, to the extent of 7.5% or 10%, subject to the limit of Rs 10 crores, can be considered to be deposit made towards fulfillment of stipulation under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962. Any shortfall from the amount stipulated under these sections shall have to be paid before filing of appeal before the appellate authority. As a corollary, amounts paid over and above the amounts stipulated under Section 35 F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962, shall not be treated as deposit under the said sections. 3.2 Since the amount paid during investigation/audit takes the colour of deposit under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962 only when the appeal is filed, the date of filing of appeal shall be deemed to be the date of deposit made in terms of the said sections.
Here in this case, the date of filing of party's appeal no. E/70126/2017 in CESTAT is 01.03.2017 which shall be taken as date of deposit for the purpose of Section 35F & 35FF.
That the refund of remaining amount Rs.36,66,508/- [Rs.67,48,635 - Rs.30,82,127) which is not pre-deposit is required to be dealt with provisions of 11B and 11BB of the Central Excise Act, 1944.
the refund has arisen consequent to the CESTAT Final order No. A/70670-70703/2017- EX (DB) dated 11.05.2017, and application for refund is filed on 18.08.2021 after lapse of more than one year time from the relevant date as prescribed under Section 11B.
Excise Appeal No.70195 of 2024 5 The Relevant date has been explained under explanation given under Section 11B which is reproduced as under-Explanation. (A) For the purposes of this section,- (B) "relevant date"
means, (a) In the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods, A () if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India, or (i) if the goods are exported by land, the date on which such goods pass the frontier, or (ii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to place outside India, a (b) in the case of goods returned for being remade, refined, reconditioned, or subjected to any other similar process, in any factory, the date of entry into the factory for the purposes aforesaid; (c) in the case of goods to which banderols are required to be affixed if removed for home consumption but not so required when exported outside India, if returned to a factory after having been removed from such factory for export out of India, the date of entry into the factory; (d) in a case where a manufacturer is required to pay a sum, for a certain period. on the basis of the rate fixed by the Central Government by notification in the Official Gazette in full discharge of his liability for the duty leviable on his production of certain goods, if after the manufacturer has made the payment on the basis of such rate for any period but before the expiry of that period such rate is reduced, the date of such reduction; (e) in the Excise Appeal No.70195 of 2024 6 case of a person, other than the manufacturer, the date of purchase of the goods by such person; (ea) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of section 5A, the date of issue of such order; (eb) in case where duty of excise is paid provisionally under this Act or the rules made there under, the date of adjustment of duty after the final assessment thereof; (ec) in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction; in any other case, the date of payment of duty in this case, the date of Final order passed by the Hon'ble CESTAT i.e. 11.05.2017 is relevant date in view of para (ec) and the party is required to file application for refund before 11.05.2018 but the party filed the same on 18.08.2021. Therefore, refund of Rs.36,66,508/- & interest thereon has been granted erroneously as case hit by limitation.
Appellate authority has failed to appreciate the facts of the case that granted the interest of Rs.30,05,247/- incorrectly in violation to provisions of Section 35F & 35FF of Central Excise Act,1944. Hon'ble Commissioner (Appeal) placed reliance of the decision of M/s Marshall Foundry works Pvt.Ltd. (Final Order no. 61058- 61062/2019) relied upon by the appellate authority is are distinguishable.
In the instant case all the appellate remedies were duly resorted to by the party and refund has arisen consequent to the CESTAT Final order No. A/70670- 70703/2017- EX (DB) dated 11.05.2017. Therefore, the ratio of the case M/s Marshal Foundry works Pvt. Ltd.
Excise Appeal No.70195 of 2024 7 which itself is based on the decision of the Hon'ble Apex Court in the casc of M/s Sandvik Asia Ltd. is not applicable here in this case.
In the case of M/s Ratnamai Metals & Tubes Ltd. vs Commissioner Central Excise & Service Tax, Ahmedabad II [2019(366)ELT139(Tri-Ahmd.)]), Hon'ble Tribunal has held that as regard to the deposit made during the investigation it is obvious that there is no provision in Central Excise or to make deposit. Whatever payment made, it is towards the probable Excise duty liability for which the investigation is undergoing therefore it cannot be said that any deposit made during the investigation so made by the assessee is not a duty but only a deposit. Once the adjudicating authority confirms the demand the said amount stands confirmed as duty only, the same being the duty stands appropriated against the demand confirmed in adjudication order. For this reason also the amount even though that paid during the investigation shall be considered as payment of duty. When this be so, the refund of duty amount is clearly governed by Section 11B of the Central Excise Act, 1944. In case of refund under Section 11B provisions, of interest is available under Section 11BB. In terms of such section the interest is payable only from the date after completion of three months from the date of filing of refund application. Therefore, this case is relevant in the present appeal.
That the monetary threshold limit in this case for filing of appeal shall not apply as the Central Board of Indirect Taxes and Customs (earlier Central Board of Excise & Customs) have fixed the monetary limits below which appeal shall not be filed in the Tribunal, High Court and the Supreme Court and instructed to its sub offices vide instruction F. No. 390/Misc/116/2017- Excise Appeal No.70195 of 2024 8 JC dated 22.08.2019 but in the para 4 of the instruction it is also directed to follow para 1.3 of the instruction dated 17.08.2011 issued under F. no. F.No.390/Misc./ 163/2010-JC where it has been provided that cases of adverse judgments relating to the following should be contested irrespective of the amount involved:
Where the constitutional validity of the provisions of an Act or Rule is under challenge.
Where Notification/ Instruction/ Order or Circular has been held illegal or ultra vires as in the instant issue of payment of interest as prescribed under Section 35FF and Section 11BB of Central Excise Act,1944 is under challenge, this appeal is being preferred by the revenue, even when the amount involved is less than the prescribed monetary limit as per litigation policy of Government.
3.1 We have heard Shri Sandeep Pandey, Authorized Representative for the revenue and Shri Rajesh Chibber, Advocate for the respondents.
3.2 Learned authorized representative arguing for the revenue re-iterated the grounds taken in the appeal filed by revenue.
3.3 Arguing for the respondent learned counsel submits:
Department appeal is beyond SCN in which only refund of Rs 10,53,750.00 was disputed.
In EA 3 the amount under dispute is to be mentioned. There has been never any dispute with regard to refund of Rs.78,26,385.00 (Rs.67,48,635.00 of Company and Rs.10,77,750.00 of Co appellants). There was no challenge to the interest paid on 7.5% of the duty amount from the date of filing of appeal.
Going as per the contention of the Department before appellate authority, the interest was to be given on 7.5% (on Rs.30,82,127.00 and that too from the date of filing of Excise Appeal No.70195 of 2024 9 appeal which comes to Rs 8,35,974. therefore as best the difference of Rs 30,05,247-8,35,974= RS 21,69,273 can be disputed by the Department which is within the monetary limit.
So the department has tried to mislead the Hon'ble CESTAT by giving incorrect amounts under challenge. The department never raised any issue with regard to the remaining amount of Rs.36,66,508.00 before the appellate authority and there was no challenge to that extent in the SCN. Accordingly, there was no finding in the OI0 also. Hence said plea cannot be made before CESTAT for the first time.
Once the pre-audit of refund was carried out, the department could not challenge the order sanctioning the refund.
Even as per department, the amount involved is less than Rs.30,05,247.00 but has not shown as to how the payment of interest on differential amount and the determination of period or sanctioning the interest would be considered as an issue involving the constitutional validity of the act or rule is under challenge or where the notification instruction order or circular has been held illegal or ultra virus.
In view of the above, once the amount involved was less than Rs.50,00,000.00 the department could not file the appeal before the CESTAT. Without prejudice, when the amount was deposited before passing of adjudication order the same was mere deposit and hence the interest was payable from the date of payment till the date of refund as has rightly been held by the authorities below following the settled legal position.
4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments.
4.2 Impugned order records the findings as follows:
Excise Appeal No.70195 of 2024 10 "7.2 M/s RMG Polyvinyl India Limited in their Appeal dated 02.12.2021 have contended that the lower authority while passing Order-In- Original No.03/R/AC/Div.-BSR/GBN/21- 22 dated 07.09.2021 has rejected the refund claim of Rs.
10,53,750 on incorrect appreciation of facts and submissions of appellant supported with legal backing. That the lower authority has sanctioned the rate of interest @6% whereas according to the appellant the same should have been 12% as the amount was deposited much before the introduction of mandatory pre deposit provisions. On the other hand, the department have also filed an appeal against the Order of the lower authority dated 07.09.2021 In their appeal the department has contended that the lower authority while passing Order-In-Original No.03/R/AC/Div.-BSR/GBN/21-22 dated 07.09.2021 has gone beyond the scope of CESTAT Final Order No. A/70670-70703/2017-EX(DB) dated 11.05.2017 and in contravention of the provisions of Section 35F, 35FF and Board's Circular No. 984/08/2014-CX dated 16.09.2014 has paid interest on stipulated amount i.e. 7.5% of duty involved in SCN (Rs. 30,82,128) and also from date of payment i.e. 17.12.2014 instead of date of filing of appeal i.e. 01.03.2017 while sanctioning refund of Rs. 78,26,385 7.3 In the given matter of the case, as evident from the documents/information placed on record, I find that the investigation of the case had culminated into issuance of SCN dated 12.10.2012 (for confiscation of goods and penalty) and other SCN dated 26.04.2013 for demand of duty form the notices. Thereafter, the appellant M/s RMG filed an application dated 19.12.2014 before Settlement Commission for settlement of the dispute arising out of the show cause notices and made pre-deposit of Rs. 41,30,080/ and Rs. 26,18,555/- (Total Rs. 67,48,635).
7.4 The Settlement Commission sent back the case to adjudicating authority to adjudicate the case in accordance Excise Appeal No.70195 of 2024 11 with the provisions of law. The Commissioner, Central Excise Commissionerate, Noida -I vide his order in original No. 46-47/COMMISSIONER/NOIDA-II/2016-17 dated 31.12.2016 confirmed the demand of Rs. 4,10,95,030/- and imposed penalty on the appellant M/s RMG and 33 co- noticees,.
7.5 M/s RMG filed appeal before Hon'ble CESTAT, Allahabad. As per appellant made pre-deposit of Rs. 10,77,750 on behalf of the co- applicants, as they were not registered with the Central Excise department, at the time of filing appeal before Hon'ble CESTAT, Allahabad. The Appellant M/s RMG had also mentioned the amount of Rs. 41,30,080/- deposited vide Challan No. 00142 dated 17.12.2014 and amount of Rs. 26,18,555/- vide Challan No. 144 dated 17.12.2014 in Column No 14(i) of Form EA-3 filed before CESTAT. The CESTAT vide order No. A/70670- 70703/2017-EX (DB) dated 11.05.2017 set aside the impugned order dated 31.12.2016 and allowed the appellant and all co-appellants consequential relief.
7,6 I find that the lower authority while passing Order-In- Original No )3/R/AC/Div.-BSR/GBN/21-22 dated 07.09.2021 has considered Rs. 41,30,080/-, Rs. 26,18,555/- and Rs. 10,77,750/- as pre-deposit in terms of Section 35F of Central Excise Act, 1944 and has allowed refund of the same. The lower authority has also held that as this pre: deposit of Rs.78,26,385/- has been deposited after commencement of Finance (2) Act,2014, the interest on pre-deposit is payable from the date of pre-deposit to date of Order as per Section 35FF. The lower authority has however, rejected the refund of Rs. 10,50,000/- and Rs. 3,750/- deposited vide Challan No. 224 dated 20.02.2017 and Challan No. 225 dated 20.02.2017 respectively as the reason for making deposit was not explained by the party. That also confessed in reply that deposit of this amount was not brought to the notice of CESTAT The lower Excise Appeal No.70195 of 2024 12 authority thus rejected the refund of Rs. 10,50,000/- and Rs. 3,750/- treating the same not being deposit under Section 35 F of Central Excise Act, 1944 7.7 I have observed that the Appellant has argued that whatever amount was not deposited after passing of Order- in-Original, the same was mere deposit and Hon'ble CESTAT only for the purpose of hearing of appeal considered the said amount as sufficient deposit towards mandatory deposit. Hence, when the amount was mere deposit with the department, interest was payable from the date of payment. I find that the Appellant M/s RMG have placed reliance in the ratio of decision of Hon'ble CESTAT in the case of Pr. Commissioner of CGST, New Delhi Vs, Emmar MGF Construction P. Ltd., reported in 2021 (55) GSTL 311 (Tri.Del.). The appellant M/s RMG have also contested that the mischief of unjust enrichment will not be applicable in the present case as provisions of Section 12B are applicable to duty only-
7.8 I have carefully examined submissions made by M/s RMG, submissions made by department, discussion and findings of the lower authority while passing the impugned Order-in-Original, provisions under law and the decisions relied upon in the matter. I find that as per provisions of law and as already settled in plethora of decisions, the deposits made with the department during the course of investigation and before passing of Final Order is mere deposit and not duty. I also observe that once the matter attains finality through an order which is not challenged by the department and accepted to be final, then the department is liable to return the said deposited amount to the party along with interest for the period till the amount remained with the department. Thus the interest will be payable by the department to the appellant on the total deposit that was made in relation to the entire process of the case. The contention of the department that the Excise Appeal No.70195 of 2024 13 interest is payable on the deposit restricted up to a maximum of 7.5 % of the duty of Rs. 4,10,95,030/- i.e. Rs.30,82,128/- and that too only beginning from the date of appeal is not correct. I hold that the Adjudicating Authority has correctly allowed refund of the deposit of Rs. 78,26,385/- along with interest of Rs. 30,05,247/-. To this count I am of the considered opinion that the Order passed by the lower authority is correct. In this regard I also piace reliance in the decision of the Hon'ble CESTAT in the case of Marshall Foundry & Engg. (P) Ltd Vs. CGST Appeal No. E/60916/2019-Ex(SM) dated 28.11.2019. The Hon'ble CESTAT while discussing the entire law on the subject, has held that Appellants are entitled to claim interest for the period the amounts remained with the Department i.e. from the date of deposits made during an investigation to till, the amount is actually refunded by the Department to the party after the decision of the appeal.
7.9 I further observe that M/s RMG in para 3 of the Grounds of Appeal dated 02.12.2021 have mentioned that they had submitted before the Lower authority that Rs. 10,53,750/- was not deposited as pre-deposit for filing of appeal. They have further mentioned the lower authority has mentioned in Order that they did not explain for making deposit of the said amount. I find that this observation of the Adjudicating authority has been construed by the appellant M/s RMG as admittance of deposit by the department. They have made a claim of refund of this amount claimed to have been deposited by them and still lying with the department.
7.10 In the mater mentioned in para 7.9 above I am of the opinion that refund of any deposit can be considered only after complete verification by the department. In the matter I find that in the matter, firstly the appellant M/s RMG had mentioned that the deposit of this amount of Rs. 10,53,750/- escaped to be brought to the notice of Hon'ble CESTAT. Subsequently, they filed a separate refund for this Excise Appeal No.70195 of 2024 14 amount and mentioned that this amount was deposited by them and that w.e.f 01.07.2017 they migrated to GST and the closing balance of June 2017" was transferred to GST regime. They have argued that this amount has not been credited to PLA nor utilized for discharging any dues. I also see that the Lower authority has categorically mentioned that the appellant has not explained as to why this amount was deposited by the appellant. Further I also observe that the refund in the matter placed before me pertains to Final Order No. A/70670-70703/2017- EX(DB) dated 11.05.2017 of CESTAT which has set aside the demand. The refund claimed by the appellant in the first place was consequent to the said Final Order. I am thus of the considered opinion that a detailed verification of the deposit of Rs.10,53,750/- and admissibility of refund required by the Adjudicating Authority. In the facts and circumstances of the mater, I am of the opinion that the best legal recourse will be to remand this aspect of the case to the Original Authority for reconsideration after granting proper opportunity to the appellant to represent his case and if need be to call for a detailed report from the field formation in the matter 7.11The contention of M/s RMG that payment of interest @6% by the Lower Authority is not proper and was required to be paid at 12% as settled by CESTAT in the case of Commissioner Vs Parle Agro P.Ltd vide Final Order No.70180-181/2021 dated 25.05.2021, does not appear to be acceptable and proper. In this regard I find the government has specified 6% as the rate of interest for delayed refund of pre-deposit under Section 35FF of the Central Excise Act, 1944 as per Notification No.24/2014- CE(NT) dated 12.08.2014.
4.3 Original authority has recorded the findings as follows:
"3. I have carefully scrutinized the refund claim of the Party. The Party has submitted all the prescribed documents along with deposit challans to substantiate their refund Excise Appeal No.70195 of 2024 15 claim. I observe that the Hon'ble CESTAT. Allahabad vide CESTAT Final Order No. A/70670-70703/2017 dated 11.05. 2017 has set aside the Order-In-Original No.46- 47/COMMISSIONER/NOIDA-II/2016-17 dated 31.12. 2016. Hon,ble CESTAT, Allahabad has ordered as below -
"Therefore, while setting aside the demand of duty raised on account of clandestine removal or undervaluation, we also set aside the impugned order. We also set aside the confiscation and we hold that the penalties as imposed under Rule 26 are erroneous. Accordingly, we allow all the appeals. The appellants shall be entitled for consequential benefits as per the law."
Further, Para 5.2 of the Board's Circular No 984/08/2014- CX dated 16.09.2014 states that- Pre-deposit for filing appeal is not payment of duty. Hence, refund of pre-deposit need not be subjected 1o the process of refund of duty under section 11B of the Central Excise Act, 1944. Therefore, in all cases where the appellate authority has decided the matter in favour of the appellant, refund with interest should be paid to the appellant within 15 days of the receipt of the letter of the appellant seeking refund irrespective of whether order of the appellate authority is proposed to be challenged by the department or not 4.1 On going through the application dated 18.08.2021 for refund Rs.78,02,385/- I find that Rs. 41,30,080 vide Challan No. 00142 dated 17.12.2014 & Rs. 26,18,555/- vide Challan No.144 dated 17.12.2014 was deposited by the party when approaching the Settlement Commission. I also find that these two challans have also been mentioned in Column 14(i) of Form EA-3 filed by the party before Hon`ble CESTAT which is more than 7.5% of the mandatory pre deposit under Section 35 F of the Central Excise Act 1944. However, it is also observed that the details of the other amount Rs. 10,50,000/- deposited vide Challans No. 224 dt. 20.02.2017 and Rs. 3,750/- vide challan no. 225 Excise Appeal No.70195 of 2024 16 dt. 20.02.2017 was not mentioned by the party in the Column 14(i) of Form EA-3 and therefore it appears that it was not a part of pre-deposit under Section 35 F of the Central Excise Act 1944. 4.2 Consequently, the party was issued a Show Cause Notice No. 15/AC/Div-BSR/2021-22 dated 01.09.2021 requiring them to show casue as to why refund of Rs. 10,50,000/- deposited vide Challan No. 224 dt. 20.02.20 17 and Rs. 3,750/- vide challan no. 225 dt. 20.02.2017 may not be disallowed and rejeted as it is not mentioned Form EA-3 filed before CESTAT it was not a part of pre-deposit under Section 35 F of the Central Excise Act 1944 4.3 The party replied to the said Show Cause Notice vide letter dated 02.09.2021 wherein they stated that - We filed an appeal before CESTAT. At that point of time we deposited Rs. 10,50,000/- vide Challan No. 224 dt, 20.02.2017 and Rs. 3,750/- vide challan no. 225 dt. 20.02.2017 as 'others` and not n duty account, which were in connection with said case. It seems that due to some confusion, said deposit could not be brought to the notice of CESTAT, However, it is submitted that since the said amount was not deposited as duty, refund of the same is not governed by the provisions of section 11B of the Act." In this regard the Party has relied upon decision of CESTAT in case of Cochin Shipyard reported in 2021(51)GSLT322 (Iri. Bang.). 4,4 find that the reply o1 the Party S not tenable as they have not explained the reasons for depositing RS 10,50,000/- vide Challan No. 224 dt. 20.02.2017 and RS. 3,750/- vide challan no. when the amount of Rs, 41,30,080 vide Challan No. 00142 dated 17.12.20 14 & Rs. 26,18,555/- vide 225 dt. 20.02.2017 Challan No.144 dated 17.12.2014 deposited earlier by the party and mentioned in Column 14(i) of Form EA-3 was already more than 7.5% of the mandatory pre deposit under Section 35 F of the Central Excise Act 1944. Moreover,the party have confessed in their reply that said deposit could not be brought to the notice of CESTAT. Circular No. 984/8/2014-CX dated Excise Appeal No.70195 of 2024 17 16.09.2014 of C.B.E.C rett d clearly stipulates at para 6.4 that for appeals filed before CESTAT, Column 14(i) of the Form EA-3 seeks information of payment of duty, fine, penalty and interest alongwith proof of payment (challan) and these columns may, therefore, be used for the purpose of indicating the amount of deposit made which shall be verified by the appellate authority before registering the appeal. The case of Cochin Shipyard reported in 2021(5
1)GSLT322 (Tri. Bang.) is not applicable to this case as the facts and circumstances of both the case are different. In Cochin Shipyard case the refund pertains to advance tax deposited under Service tax Rules 1994 whereas in the instant case the refund pertains to other deposits whose relevance the party has failed to establish with this case.
45 Accordingly, I conclude that Rs. 41,30,080 deposited vide Challan No. 00142 dated 17.12.2014 & Rs. 26,18,555/- vide Challan No.144 dated 17.12.2014 mentioned in Column 140) of Form EA-3 filed before CESTAT was pre-deposit in terms of Section35F of Central Excise Act 1944 and the same is refundable to the Party as per the provisions of CBEC Circular No. 984/8/2014-CX dated 16.09.2014. The refund claim of Rs. 10,50,000/- vide Challan No. 224 dt. 20.02.2017 and Rs. 3,750/- vide challan no. 225 dt. 20,02.2017 is liable for rejection as not being pre- deposit in terms of Section35F of Central Excise Act 1944.
5, going through the application dated 18.08.2021 for refund Rs. 10,77,750/- I find that the same has been deposited by the Party on behalf of 31 co-appellants of the case at the time of filing of appeal before CESTAT as these co-appellants were not registered with the Central Excise Department and were finding it difficult to make the mandatory pre-deposit. The Party has submitted copy of Form EA-3 filed before CESTAT in respect of all the co- appellants and I find that all the pre-deposit amount Excise Appeal No.70195 of 2024 18 deposited by the Party vide the 31 aforementioned challans has been mentioned in Column 14() of respective Form EA- 3 filed before CESTAT. Accordingly, I conclude that Rs. 10,77,750/- deposited vide aforementioned challans was pre-deposit in terms of Section35F of Central Excise Act 1944 and the same is refundable to the Party as per the provisions of CBEC Circular No. 984/8/2014-CX dated 16.09.2014.
6. The Superintendent CGST Range-I Sikandrabad, Bulandshahr in his verification report communicated vide letter C.No. 20-CGST/SKD-I/Rfd Vfn/3/2021 dated 31.08.2021 has submitted that - The Challans submitted along with refund claim have been verified from ACES payment details. As per TAR report and as per record available in this office, no outstanding dues are pending against the party.
V In the present case the department has preferred an appeal before Hon'ble High Court Allahabad having Filing no.CEXA/8056/2018 and as per status available on the website of High Court, it is at admission stage with last listing on 28.01.2019 and no stay has been granted Further, Para 5.1 of the Board's Circular No 984/08/2014- CX dated 16.09.2014_states that- " Where the appeal is decided in favour of the party/ assesse, he shall be entitled to refund of the amount deposited along with interest at the prescribed rate from the date of making the deposit to the date of refund in terms of Section 35 FF of the Central Excise Act 1944 or Section 129EE of the Customs Act 1962."
Section 35FF of the Central Excise Act, 1944 is reproduced as under:-
"Where an amount deposited by the appellant under section 35F is required to be refunded consequent upon the order of the appellate authority, there shall be paid to the appellant interest at such rate, not below five Per cent and Excise Appeal No.70195 of 2024 19 not exceeding thirty-six per cent per annum as is for the time being. fixed by the Central Government, by notification in the Official Gazette on Such amount from the date of payment of the amount till, the date of refund of such amount.
Provided that the amount deposited under section 35F, prior to the commencement of the Finance (2) Act, 2014, shall continue to be governed by the provisions of section 35 FF as it stood before the commencement of the said Act", All the deposits vide aforesaid challans in the instant case have been made consequent to the commencement of the Finance (2) Act, 2014.
NOTIFICATION UNDER SECTION 35FF FOR INTEREST The Notification No.24/2014-CE (NT), dated 12.08.2014 issued under Section 35FF of the Central Excise Act. 1944 which prescribes the rate of interest is also reproduced as under- Interest @ 6% per annum fixed for delayed Refund of pre-deposit under Section 35 FF of Central Excise Act,1944.-In exercise of powers conferred 'by section 35FF of the Central Excise Act,1944(1 of 1944) the Central Government hereby fixes the rate of interest at six percent per annum for the purpose of said Section. find the proviso to Section 35 F of Central Excise Act 1944 is applicable as the pre deposit amount of Rs.78,26,385/- has been deposited after commencement of the Finance (2) Act, 2014 (w.e.f 06.08.2014). I hold that under section 35FF the party is eligible for interest amounting to Rs.30,05,247/- (calculated on Rs. 78,26,385/-) from date of Pre-deposit of amount to till date of order. The computation of the interest is as under:-
S. Name Penalty Amount Challa Date Day Interest No of the Imposed of Pre- n No. s . Party deposit
1. RMG Demand 413008 00142 17.12.20 245 16,64,705.Polyvin 4,10.95.030 0 14 2 12
yl India /- penalty-
Limited 4,10,95,030 261855 00144 17.12.20 245 10,55,457.
Excise Appeal No.70195 of 2024
20
/- 5 14 2 02
674863 27,20,162/
5 -
Co- Appellants -Pre-deposit amount deposited by the M/s RMG Polyvinyl 1 Guideman 100000 7500 0050 06/04/201 161 1,986.16 Tape 7 7 1 Industries 2 Rosla 100000 7500 0051 06/04/201 161 1,986.16 Water 7 7 1 Works 3 Popular 300000 22500 0052 06/04/201 161 5,958.49 Stores 7 7 1 4 J.R. Bhatia 400000 30000 0051 06/04/201 161 7,944.66 & Co. 0 7 1 5 P J 400000 30000 0052 06/04/201 161 7,944.66 Internation 1 7 1 al 6 Chowdhary 400000 30000 0052 06/04/201 161 7,944.66 Waterproof 5 7 1 Work 7 Siddharth 400000 30000 0054 06/04/201 161 7,944.66 Brothers 0 7 1 8 Mulak Raj 250000 187500 0052 06/04/201 161 49,654.11 Govind Lal 0 3 7 1 9 Bajaj 250000 187500 0052 06/04/201 161 49,654.11 Plastic 0 9 7 1 1 Eastern 10000 750 0049 06/04/201 161 198.62 0 Rain Water 0 7 1 1 Raja Plastic 10000 750 0051 06/04/201 161 198.62 1 4 7 1 1 Jayanti 15000 1125 0048 06/04/201 161 297.92 2 Cotex 8 7 1 1 Chowdhary 20000 1500 0050 06/04/201 161 397.23 3 Internation 5 7 1 al 1 Mobile 200000 1500 0053 06/04/201 161 397.23 4 India 8 7 1 Marketing 0 13500 0017 12/04/201 160 3,561.78 7 7 5 1 AK 25000 1875 0049 06/04/201 161 496.54 5 Internation 6 7 1 al 1 Mayur 25000 1875 0051 06/04/201 161 496.54 6 Plastic 1 7 1 Excise Appeal No.70195 of 2024 21 1 J.S.Seat 40000 3000 0053 06/04/201 161 794.47 7 Maker 6 7 1 1 SGM Paper 50000 3750 0048 06/04/201 161 993.08 8 Products 5 7 1 1 Empire 50000 3750 0049 06/04/201 161 993.08 9 Plastic 2 7 1 2 Modern 50000 3750 0051 06/04/201 161 993.08 0 Enterprises 2 7 1 2 Zeasant 100000 7500 0047 06/04/201 161 1,986.16 1 Enterprises 9 7 1 2 Nidhi 200000 15000 0047 06/04/201 161 3,972.33 2 Elastimer 6 7 1 India Pvt Ltd 2 Batra 200000 15000 0053 06/04/201 161 3,972.33 3 Rexine 1 7 1 Company 2 Bramputra 200000 15000 0053 06/04/201 161 3,972.33 4 Enterprises 4 7 1 2 Wadhumal 250000 18750 0049 06/04/201 161 4,965.41 5 & Sons 8 7 1 2 Ram 250000 18750 0050 06/04/201 161 4,965.41 6 Bhagat 0 7 1 Ashok Kumar 2 Gulshan 250000 18750 0050 06/04/201 161 4,965.41 7 Agencies 9 7 1 2 Techno 100000 7500 0051 06/04/201 161 1,986.16 8 Trade 9 7 1 2 Agarwal 150000 11250 0053 06/04/201 161 2,979.25 9 Cloth Store 5 7 1 3 Mr. Arvind 500000 375000 0026 01/04/201 160 99,000.00 0 Goenka 0 2 7 6 3 Kumar 75000 5625 0017 12/04/201 160 1,484.08 1 Sons 9 7 5 Industries 1077750 2,85,084.74
Grand 78,26,385 30,05,247
Total /-
9. Since the instant refund is of pre-deposit amount under Section 35F of the Central Excise, Section 11B of the Central Excise Act, 1944 is not applicable due to not being duty Therefore, the limitation period of one year does not hit the claim of refund for pre-deposit amount of RS.
Excise Appeal No.70195 of 2024 22 78,26,385/- as per the CESTAT's Final Order No.A/70670- 70703/201 7 dated 1 1.05.2017.
I find that consequent upon the CESTAT's Final Order No.A/70670-70703/2017 dated 11.05,2017, the instant refund claim of pre deposit deposited by them under the existing law has been arisen which is after the roll out of GST on 01.07.2017 for which following provisions of CGST are applicable The Section 142(3) of the Central GST Act 2017 says - Every claim for refund filed by any - person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, nowithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 1 1B of the Central Excise Act, 1944:
Provided that where any claim for refund of CENV AT credit is fully or partially rejected, the amount so rejected shall lapse:
Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act.
The Section 142(6) (a) of the Central GST Act 2017 says -
"every proceeding of appeal, review or reference relating to a claim for CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law, and any amount of credit found to be admissible to the claimant shall be refunded to him in cash, notwithstanding Excise Appeal No.70195 of 2024 23 anything to the contrary contained under the provisions of existing law other than the provisions of section (2) of section I1B of the Central Excise Act, 1944 (1of 1944) and the amount rejected, if any, shall not be admissible as input tax credit under this Act:
Provided that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forwarded under this Act;"
10. I find that instant refund of pre deposit has arisen after the appointed day (01.07.2017). the provisions of Section 142(3) & Section 142(6) (a) of the CGST Act, 2017 will be applicable to dispose off the refund claim.
In view of the aforesaid provisions of the Section 142 (3) & Section 142(6) (a) of the Central GST Act,2017 of the Central GST Act, 2017 read with Section 35 F/35FF of the Central Excise Act, 1944 and the discussion held above, I find that the claim of Rs. 78,26,385/- and interest of Rs.30,05.247/- due thereon under section 35FF of CEA 1944 is admissible for refund to the party in cash.
It is also observe that clause of unjust enrichment in not applicable in the instant case, as this is case of pre-deposit. The refund claim has been pre-audited from Headquarters Audit, a Central GST, G.B. Nagar vide their letter C.No. V(1)/Pre/post Audit /BSR /2017/ 812 dated 07.09.2021."
4.4 From the order of original authority it is evident that the refund order was pre-audited by the Headquarters Audit and no objection was communicated to the Assistant Commissioner, directing for rejection of refund claim on the grounds of limitation or objecting to the computation of interest proposed to be granted. We also note that the show cause notice 01.09.2021 was issued to respondent asking them to show cause as to why certain amounts claimed as refund be not rejected. Para 7 of the Show cause notice is reproduced below:
Excise Appeal No.70195 of 2024 24 "7. Now, therefore in view of the above, M/s RMG Polyvinyl India Limited, 10/1, Industrial Area Sikandarabad, Distt. - Bulandsahar are required to show cause to the Assistant Commissioner, CGST and Central Excise Division Bulandsahar, 3rd Floor, Wegmens Business Park, Plot No 3, K P III, Greatter Noid as to why refund of Rs 10,50,000/-
deposited vide Challan No 224 dt 20.02.2017 and Rs 3,750/- vide challan No 225 dt 20.02.2017 may not be disallowed and rejected as it is not mentioned in EA-3 Form filed before CESTAT Allahabad and is not a part of pre- deposit under Section 35 F of the Central Excise Act, 1944."
4.5 Evidently any refund claim filed by any person has two parts one part, for which the jurisdictional Assistant/ Deputy Commissioner do not doubt the admissibility of the refund claim and the other part, for which the jurisdictional officer doubts the admissibility of refund claim and issues the Show Cause Notice for rejection. However for all the refunds above certain value, (High Value Refund Claims) the refund order whether allowing or rejecting the refund order is subjected to pre audit and after clearance from the audit branch of Headquarter the order is issued as such or subject to further scrutiny and examination by the jurisdictional authorities before finalizing the refund claim. In the case of refund claims were the amounts involved is less than the prescribed limit refund orders are subjected to post audit and on the basis of the post audit the jurisdictional officers are directed to issue show cause notice for the erroneous refund.
4.6 In the present case the refund claim was pre-audited by the head quarter audit as noted by the jurisdictional Assistant Commissioner in his order vide letter dated 07.09.2021. It appears that audit to had no objections to sanction of refund claim in the manner as proposed by the jurisdictional Assistant Commissioner. Thus with the concurrence of the audit the refund order was issued. However subsequent to the issue of the refund order, the review branch of headquarter which is part of the office of the same commissioner objected to the refund claim Excise Appeal No.70195 of 2024 25 and Commissioner directed for filing the appeal with the Commissioner (Appeal). The appeal filed by the revenue was dismissed by the Commissioner (Appeal), so Committee of Commissioners, in which one member was the jurisdictional Commissioner, directed for filing this appeal before the Tribunal.
4.7 Respondent has raised the objection to the appeal filed by the revenue stating that the refund claim was pre-audited and hence the order sanctioning the refund claim could not have been challenged. However we do not find any merits in the contention made by the respondent. Hon'ble Bombay High Court has in case of Bombay Chemicals Ltd. [2007 (8) S.T.R. 417 (Bom.)] observed as follows:
"9. It is not in dispute that proceedings before the Assistant Collector adjudicating the claim for refund of the excise duty are of quasi judicial nature. Relying upon its two earlier decisions in Mahadayal v. Commercial Tax Officer (AIR 1958 SC 667) and Rajagopal Naidu v. State Transport Appellate Tribunal - AIR 1964 SC 1573, Their Lordships of the Supreme Court observed as follows in Orient Paper Mills Ltd. v. Union of India - 1978 (2) E.L.T. (J345) (S.C.) = AIR 1969 SC 48.
"If the power exercised by the Collector was a quasi judicial power as we hold it to be that power cannot be controlled by the directions issued by the Board. No authority however high placed can control the decision of a judicial or quasi judicial authority. That is the essence of our judicial system. There is no provision in the Act empowering the Board to issue directions to the assessing authorities or the appellate authorities in the matter of deciding disputes between the persons who are called upon to pay duty and the department. It is true that the assessing authorities as well as the appellate authorities are judges in their own cause:
yet when they are called upon to decide disputes arising under the Act they must act independently and impartially. They cannot be said to act independently if their judgment Excise Appeal No.70195 of 2024 26 is controlled by the directions given by others. Then it is a misnomer to call their orders as their judgments, they would essentially be the judgments of the authority that gave the directions and which authority had given those judgments without hearing the aggrieved party."
10. Relying on the above observations, in a similar case in Rewa Gases Pvt. Ltd. v. Assistant Collector of C.Ex., Satana
- 2002 (140) E.L.T. 18 (M.P.) the Madhya Pradesh High Court has observed as follows :
"It is not in dispute that the proceedings before the Assistant Collector for adjudicating the claim for refund of excise duty are of quasi judicial nature. He must act independently and impartially. His discretion cannot be controlled by the directions of the superiors in that very case. The procedure of pre-audit of such a judicial discretion is unbeard of. It amounts to pulling the strings from the backdoor and renders the adjudicating officer as a puppet in the hands of others. The tax-collector is already considered as leaning in favour of the administration and if his quasi judicial discretion is controlled by laying down the procedure of pre-audit justice to the assessee would be a casualty. The officer is bound by the statutory provisions and he must appreciate the evidence and material on record by using his own judgment. His attention can be invited to general principles and norms relevant for adjudication of the claim but there cannot be a direct or indirect interference in the case which he is handling. The Central Board or the Collector (Internal Audit) has no jurisdiction or authority to direct an officer to exercise his discretion in a particular way. The discretion is vested in the adjudicating officer. While the adjudicating officer performs the statutory or particularly quasi the judicial duty, the superior authorities cannot direct that the discretion should be exercised one way or the other. The adjudicating officer must consider the case independently, uninfluenced by the departmental Excise Appeal No.70195 of 2024 27 instructions, on basis of evidence brought before him and also on the basis of all the facts placed before him. The officer is not bound by any administrative instructions. The questions of fact and law, which may be determined by him after full application of mind in an objective manner without feeling in any way controlled by any administrative instructions."
From the aforesaid two authorities of the Supreme Court and Madhya Pradesh High Court, it is clear that the authority exercising quasi judicial power has to discharge his function judicially, independently and without any control or interference. According to the Respondents, in view of certain standing orders and the circular dated 13th September, 1990 from Central Board of Excise and Customs after the Assistant Collector prepares the order, he has to submit the same to audit cell for pre-audit and after the pre-audit, the concerned Assistant Collector should pass the final order accordingly. Infact, it amounts to direct interference in the judicial order passed by the competent authority in the quasi judicial proceedings by some officers of the audit cell and thus such officer of the audit department controls the final decision of the authority vested with quasi judicial power. It cannot be supported in view of the observations of the Supreme Court in Orient Paper Mills v. Union of India (supra).
11. It is possible that before passing final order in the proceedings for refund claim, the concerned Assistant Collector may get the record about the payment of duty, about the passing on of the incidence of the duty to the customer or otherwise verified from his office or even from the Accounts or Audit Department, But if after being satisfied that claim is justified, he passes the order, it becomes final. Thereafter, there can not be any pre-audit of the order passed by the Assistant Collector."
Excise Appeal No.70195 of 2024 28 4.7 Relying on circular issued by the board specifying the monetary limit for filing the appeals by the department respondent have contended that the said that as the disputed amount in the said order is Rs 21,69,273/- this appeal could not have been filed. However in their appeal revenue has contended that, this appeal is maintainable in view of the exceptions provided in the said circular. They contend that in the instant case issue of payment of interest as prescribed under Section 35FF and Section 11BB of Central Excise Act,1944 is under challenge, this appeal is being preferred by the revenue, even when the amount involved is less than the prescribed monetary limit as per litigation policy of Government.
4.8 The exceptions provided in the said circular read as follows:
Where the constitutional validity of the provisions of an Act or Rule is under challenge.
Where Notification/ Instruction/ Order or Circular has been held illegal or ultra vires.
We do not find that the appeal of the revenue can be said to be filed under the said exception clauses. Neither constitutional validity of any provision of Acts or Rules is under challenge, nor any notification/ Instruction Order or Circular has been held illegal or ultra viresby the impugned order. The issue at best can be said to be interpretation of certain statutory provisions contained in Section 35F, 35FF and Section 11BB. Interpretation of the provisions of statute cannot be equated to the constitutional validity of the provision. Hence in our view for the reason that the disputed amount in this appeal is below the prescribed limit as per the Circular issued by the Board, this appeal filed by the revenue is not maintainable.
4.9 Chandigarh Bench has in case of Commissioner of Customs ICD Patparganj & Other ICDs Vs VSM Impex Pvt Ltd [FINAL ORDER NO. 60260-60285/2024 dated 22.05.2024 in Customs Appeal No. 60711 to 60737 of 2023 ] held as follows:
Excise Appeal No.70195 of 2024 29
6. We have carefully considered the submissions made by both the parties and perused material on record; and also gone through the various decisions relied upon by both the sides. We find that for reduction of litigation, the CBIC has issued circulars/instructions from time to time instructing the department not to file the appeal and in some cases, if it has already filed, not to press the appeal before higher authorities i.e. the CESTAT, the High Courts and the Supreme Court as the case may be, where the duty amount involved is below the minimum threshold limits respectively prescribed in such circulars. In the present cases, we are concerned with the CBIC's latest circular dated 02.11.2023, wherein it has been specifically prescribed that no appeal shall be filed before the CESTAT below the monetary limit of Rs.50 lakhs and if already filed, will have to be withdrawn.
These instructions have been issued in exercise of its power under Section 131BA of the Customs Act, 1962. The perusal of the circular cited supra shows that the same prescribes monetary limit below which the department shall not file appeal before the CESTAT, the High Courts and the Supreme Court. In so far as, the CESTAT is concerned the monetary limit prescribed is Rs.50 lakhs. Para 3 of the said circular prescribes that in respect of the pending cases before the CESTAT, the High Courts and the Supreme Court which are below the monetary limits, process of withdrawal of the appeal would be undertaken by the department.
7. Further, we find that the present appeals do fall within the instructions as prescribed in the circular dated 02.11.2023. We also note that the CESTAT, the High Courts and the Supreme Court have been consistently dismissing the appeals of the Revenue if the same are below the monetary limits as prescribed in circulars issued by CBIC from time to time.
8. It is pertinent to mention here that the amount of duty involved in each of the appeal is below of the threshold limit Excise Appeal No.70195 of 2024 30 prescribed in circular dated 02.11.2023 issued by the CBIC wherein it is provided that if the duty amount involved is less than Rs.50 lakhs, then no appeal shall be filed before the CESTAT, and if already filed, the same will be withdrawn by the department.
9. In this regard, we may refer to the decision of the Bombay High Court in the case of CCE vs Suvarna Sanjivani Sugarcane Transport - 2017 (355) ELT 238 (Bom.), wherein the Hon'ble High Court has observed in para 9 as under :
"9. The Division Bench of this Court at Panaji (Goa) of which one of us (Anoop V. Mohta, J.) was a party, while dealing with Sec. 131BA of the Customs Act, 1962 read with Sec. 35R of the Central Excise Act, 1944 and the aspect of reduction of litigation referring to monetary limits from time to time for filing appeals by the department in a case of Commissioner of Customs and Central Excise v. Sesa Goa Ltd., 2017 (3) Bom.C.R. 470 has reiterated as under:
4. Apart from the above position of law the Ministry of Finance issued certain resolutions of excise and customs from time to time and has issued instructions/circulars with clear intention to support the Government cases for reduction of litigation referring to the monitory limits from time to time, for filing appeals by the department before CESTAT/High Court and Supreme Court referring to power conferred by Section 35R of the Central Excise Act, 1944 and Section 131BA of the Customs Act, 1962 and related provisions of the Finance Act, 1994.
5. * * * * *
6. There is no issue that the appeals filed by the department in the year 2 012 having monitory limits of below 15/20 lakhs. The above provisions and instructions/circulars therefore covers the case of disposal of these appeals on the same ground. The Excise Appeal No.70195 of 2024 31 learned Counsel appearing for the respondents has no objection for such disposal. We are, therefore, inclined to do so.
7. However, it is made clear that in view of the specific provision of Section 131BA(2) as reproduced and emphasized above it is necessary to observe that once the appeals are disposed of in view of the above circumstances, based upon such circulars/instructions "it shall not preclude such Commissioner of Customs from filing any appeal, application, revision or reference in any other case involving the same or similar issues or questions of law."
Further, in the case of CC Vs. FJM Cylinders Pvt Ltd - 2024 (2) TMI 1325 Delhi High Court, the Hon'ble Delhi High Court has observed in para 2, 3 & 4 as under:
"2. Subject Appeal is covered by notification dated 2.11.2023 read with notification dated 17.08.2011 issued by the Central Board of Indirect Taxes and Custom on the subject "Reduction of Government litigation- providing monetary limit for filing appeals by departments before CESTAT/High Court/Supreme Court regarding" The monetary limit prescribed for filing an appeal before the High Court has been enhanced to Rs. 1 Crore by notification dated 02.11.2023.
3. The instructions direct not only for not filing an appeal but also withdrawal of pending cases as per the revised limit.
4. Since the subject appeal involves a duty of Rs.40,21,173/- which is the below the monetary limit prescribed and is not covered by the exceptions stipulated in the subject notification this appeal is dismissed on the ground of Low Tax Effect."
Excise Appeal No.70195 of 2024 32 Further, in the case of CC Vs. Panacea Biotech Ltd - 2024 (1) TMI 580 CESTAT, New Delhi, the Delhi Bench of this Tribunal has held in para 9 & 10 as under:
"9. From the contents of the aforesaid letter also, we do not think that the present appeal by the Department where the revenue involved is less than what has been fixed for filing an appeal to CESTAT would be maintainable and hence the same needs to be dismissed on that ground itself.
10. The learned Counsel for the respondent has pointed out to an order of the Supreme Court in Commissioner of Customs, Rajasthan Versus Sagar Suitings Pvt. Ltd - (2023) 3 Centax 147 (S.C.), where civil appeal filed by the Revenue was dismissed as the tax amount involved was less than the prescribed limit as specified in the notification for the Revenue to appeal and left the question of law open. We feel that the Instructions have been issued with the object to reduce the litigation involving meagre amount of revenue and where no substantial question of law of the nature specified arises for consideration."
Further, in the case of CC Vs. Kulcip Medicines P Ltd - 2009 (14) STR 608 (P&H), the Hon'ble High Court of Punjab & Haryana has observed in para 12 as under:
"12. We are further of the view that the circulars issued by the Board are binding and meant for adoption for the purposes of bringing uniformity. In that regard reliance may be placed on the judgments of Hon‟ble the Supreme Court in the cases of Ranadey Micronutrients v. Collector of Central Excise - 1996 (87) E.L.T. 19 (S.C.) and Paper Products Ltd. v. Commissioner of Central Excise - 1999 (112) E.L.T. 765 (S.C.) = (1999) 7 SCC 84. If the aforesaid principle is applied to the facts of the present case there does not remain any doubt that the circular issued by the Board is to be considered as binding and Excise Appeal No.70195 of 2024 33 cannot be deviated even by the department. On that account also the expression "clearing and forwarding agent‟ have to be interpreted in the light of the circular."
Similarly, the Hon'ble High Court of Punjab & Haryana in the case of Ambuja Cements Ltd vs. Union of India - 2009 (236) ELT 431 (P&H) has held in para 9 & 10 as under:
9. It is well settled that the circulars issued by the Board are binding and aims at adoption of uniform products. In that regard reliance has been rightly placed on the judgment of Hon‟ble the Supreme Court in the case of Paper Products Ltd. (supra) and such circulars are binding on the department. Placing reliance on earlier judgments of the Supreme Court in the cases of CCE v. Usha Martin Industries, 1997 (94) E.L.T. 460 (S.C.) = (1997) 7 SCC 47; Ranadey Micronutrients v. CCE, 1996 (87) E.L.T. 19 (S.C.) = (1996) 10 SCC 387; CCE v. Jayant Dalal (P) Ltd., 1996 (88) E.L.T. 638 (S.C.) = (1997) 10 SCC 402 and CCE v. Kores (India) Ltd., 1997 (89) E.L.T. 441 (S.C.) = (1997) 10 SCC 338, Hon‟ble the Supreme Court concluded in para 5 as under :- "5. It is clear from the abovesaid pronouncements of this Court that, apart from the fact that the Circulars issued by the Board are binding on the Department, the Department is precluded from challenging the correctness of the said Circulars even on the ground of the same being inconsistent with the statutory provision. The ratio of the judgment of this Court further precludes the right of the Department to file an appeal against the correctness of the binding nature of the Circulars.
Therefore, it is clear that so far as the Department is concerned, whatever action‟ it has to take, the same will have to be consistent with the Circular which is in force at the relevant point of time."
Excise Appeal No.70195 of 2024 34
10. It is, thus, evident that the revenue is precluded from challenging the correctness of the circular even on the ground of the same being inconsistent with statutory provisions. It goes further to limit the right of the revenue to file an appeal against the correctness of the binding nature of the circular. Therefore, there is no escape from the conclusion that the circular is binding on the revenue."
10. In view of our discussion and by following the ratios of the various decisions cited supra, we are of the considered opinion that the present appeals filed by the department are not maintainable in view of the instructions dated 02.11.2023 issued by the Board and consequently we dismiss all these 26 appeals leaving the question of law, if any, open."
4.10 Thus, in view of the discussions as above, we find this appeal to be not maintainable in view of the Circular issued by the Board prescribing monetary limit for filing the appeal.
5.1 Appeal is disposed of as not maintainable. Question of law if any is left open.
(Order pronounced in open court on-21 October, 2024) (P.K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp