Custom, Excise & Service Tax Tribunal
Sudarshan Chemicals Inds. Ltd vs Commissioner Of Central Excise, Raigad on 18 June, 2015
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No.
E/971/10
- Mum
(Arising out Order-in- Appeal No. YDB/120/RGD/2010 dated 26.02.2010 passed by the Commissioner of Central Excise (Appeals), Mumbai II)
For approval and signature:
Honble Mr. M.V. Ravindran, Member (Judicial)
1. Whether Press Reporters may be allowed to see No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the No CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Yes
of the Order?
4. Whether Order is to be circulated to the Departmental Yes
authorities?
Sudarshan Chemicals Inds. Ltd.
Appellant
Vs.
Commissioner of Central Excise, Raigad
Respondent
Appearance:
Ms. Padmavati Patil, Advocate for the appellant Shri H.M. Dixit, AC (AR) for the respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Date of hearing : 18-06-2015 Date of decision : 18-06-2015 O R D E R No:..
This appeal is directed against order in appeal number YDB/120/RGD/2010 dated 26.02.2010.
2. Heard both sides and perused the records.
3. The issue involved in this case is regarding rejection of refund claim of Rs.1,23,369/-which was paid as interest under protest during the pendency of proceedings. The adjudicating authority sanctioned the refund claim filed by the assessee. Aggrieved by such sanctioning of refund revenue preferred an appeal before the first appellate authority. After following the due process of law the first appellate authority set aside the order in original and allowed the appeal of the revenue.
4. Learned Counsel after taking me through the entire records submits that the first appellate authority has erroneously without considering the factual matrix has set aside the impugned order before him. It is her submission that the entire issue started with debiting of CVD in DEPB licenses during the period 2004 to 2005. On making such debits appellant took the Cenvat credit of the amounts debited in DEPB licenses. On being pointed out the said amounts were reversed under protest. It is her submission that based upon circular number 59/2004 - Cus appellant took the re-credit of the amounts debited in the DEPB licenses; show cause notice was issued for rejecting such suo-moto credit which was finally accepted by the Tribunal directing the appellant to reverse Cenvat credit along with interest, however, a window was kept open by the adjudicating authority, holding that appellant was free to claim the refund of the amounts wrongly debited under protest. It is the submission of the learned Counsel that appellant filed a refund claim which was sanctioned by the adjudicating authority by an order dated 12.03.2007 and is not challenged by the revenue; it is the submission that appellant by mistake did not file refund claim for the interest paid under protest and subsequently preferred refund claim of interest on 17.12.2007; which was allowed by the Asst Commissioner wide order in original number 365/MHD/08-09 dated 24.10.2008.. It is the submission that the first appellate authority has in the impugned order mentioned that the appellant had not preferred any appeal against order in original dated 30 and August 2006 which confirmed the recovery of credit along with interest; and submits that it is factually incorrect as against the very same order in appeal was filed and first appellate authority by an order dated 2.2.2007 rejected the appeal of the appellant. It is the submission that there is no dispute as to the fact that interest on was also paid under protest and is correctly claimed as refund by the appellant.
5. Learned Departmental representative reiterates the findings of first appellate authority.
6. I have considered the submissions made at length by both sides and perused the records.
7. Undisputedly, the interest amount of Rs.1,23,369/-was paid under protest as per the records available, also undisputed is that appellant was sanctioned the refund of CVD which was wrongly paid by them by an order No RGD/MHD/RFD-487/06-07 dated 12.03.2007 and the same is not challenged by the revenue.
8. While sanctioning the refund of interest on the adjudicating authority has recorded the following findings:
I have carefully gone through the facts of the case. I find the assessee has tiled the refund claim for an amount ofRs.123369/- vide their letter dated 17.12.2007 (received on 18.12.2007). the said refund claim is arising out of Order- in-Original No. Raigad/JC/2/06-07 dated 05.09.2006. I find that the assessee had availed credit of duty paid on imported raw material for the period from 01.06.2004 to 31.01.2005 amounting to Rs. 1998700.50 (BED) and Rs.33788.72 (Education Cess). In terms of Board's Circular no.59/2004-Cus dated 21.10.2004 additional customs duty paid through debit under DEPB shall be allowed to be availed as Cenvat Credit or duty drawback only in respect of licences issued under the new foreign trade policy effective from 01.09.2004. It appeared that the assessee had availed the said credit in violation of circular no.59/2004-Cus dated 21.10.2004. On pointing out the assessee reversed the said credit under protest vide RG23 Pt.II Entry No.1740 dated 08.02.2005 availed against the bill of entries where in the said additional customs duties paid through DEPB debit under protest during the period 01.06.2004 to 31.01.2005. It further appeared that the assessee out of cenvat credit reversed under protest vide RG23A Pt.II Entry no.1740 dated 08.02.2005 has taken re-credit ofRs.589567.80 (BED)and Rs.11791.35 (Education cess) vide entry no. 1740 dated 08.02.2005 without obtaining prior permission / order from the department. A show cause notice bearing no. V/Adj(SCN)15-184IRGD/05/3136 dated 24.03.206 was served to the assessee demanding the amount of duty which was reversed by the assessee without prior permission from the department. The said demand was confirmed by the Joint Commissioner of Central Excise, Raigad vide Order-in-Original Raigad/JC/2/06-07 dated 05.09.2006.
Thereafter the assessee reversed the cenvat credit amounting to Rs.589567.80 (BED) and Rs.11791.35 (Education cess) vide entry no.1471 dated 19.10.2006 and interest of Rs.123369 paid through TR-6 challan no.03/06-07 dated 20.10.2006. In his Order-in-Original No.Raigad/JC/02/06-07 dated 05.09.2006 the Joint Commissioner had made a finding that the assessee is free to claim re-credit of the said amount by following the proper procedure as prescribed in act and rules. Accordingly, in view of the findings of the Joint Commissioner the assessee had filed refund claim for duty amount of Rs.589567.80 (BED) and Rs.11791.35 (Education cess) which was sanctioned by the Assistant Commissioner, Central Excise, Mahad Division vide Order-in-Original No.RgdIMHDIRFDIl8/06-07 dated 12.03.2007. The assessee has not filed this application of refund of interest of Rs.123369.00 paid under protest vide TR6 challan no.03/06-077 dated 20.10.2006 under Section 11B of Central Excise Act, 1944.
In his verification report dated 15.03.2008 the Range Supdt. has stated that in the instant case the License issued to the assessee are issued after 01.09.2004. As such they are entitled for refund claim. The assessee has enclosed the TR6 challan under which the interest has been paid 'under protest' in the bank which has been attested by the Range Supdt.
9. It can be seen that the adjudicating authority has correctly recorded the facts and sanctioned the refund claim which is in accordance with the law; on an appeal filed by the revenue the first appellate authority while accepting the appeal recorded the following findings:
I have gone through the case records and considered the rival contentions. The issue involved in. the appeal is in a very narrow compass. While adjudicating the show cause cum demand, notice 23.3.2006 for recovery of Cenvat Credit of Rs.5,89,567.80 (BED) mid Rs.11,791.35 (Education cess), the Joint Commissioner vide Order-in-Original No. Raigad/JC/2/06-07 dated 30.8.2006 held that the aforesaid credit was recoverable from the respondents under the provisions of Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A of Central Excise Act, 1944 and further held that the said amount was liable to be recovered along with interest as applicable. The respondents reversed the credit on 19.10.2006 and paid the interest on 20.10.2006. No appeal was ever filed against them against the aforesaid order of the Joint Commissioner. Therefore, the said order had acquired finality and the adjudicating authority wrongly held that the interest was refundable as the duty credit itself had been refunded vide order dated 12.3.2007. The interest was due, confirmed and was paid on 20.10.2006 for having wrongly taken suo motu credit of Rs.5,89,567.80 (BED) and Rs.11,791.35 (Education Cess) on 22.8.2005 and reversed on 19.10.2006. Accordingly, the impugned order has to be set aside.
10. In my considered view, the first appellate authority has misdirected himself in recording that the appellant had not preferred any appeal against the order of the adjudicating authority. In fact and appeal was preferred and the same had attained finality in the hands of Tribunal. Subsequent proceedings of claiming the refund of the amounts debited under protest are separate proceedings which needs to be addressed on its own merits. In the case in hand undoubtedly the interest amount paid by the appellant is not required to be paid, which is evident from the fact that the Customs duty which was wrongly debited was sanctioned by an order which is not challenged by revenue and has attained finality. If an amount on which interest is demanded, is refunded, the question of rejecting the refund claim of the amount of interest on such an amount would not arise. The adjudicating authority had correctly followed the law in sanctioning the amount of the interest which was paid under protest.
11. In my considered view the impugned order is incorrect and liable to be set aside. The impugned order is set aside and appeal is allowed with consequential relief if any.
(Operative part pronounced in Court) (M.V. Ravindran) Member (Judicial) //SR 8