Custom, Excise & Service Tax Tribunal
Yash International vs Medchal - G S T on 11 October, 2018
(1)
Appeal No: E/30604/2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Single Member Bench
Court - I
Appeal No.E/30604/2018
(Arising out of Order-in-Appeal No.HYD-EXCUS-MD-AP2-250-17-18 dated 19.02.2018
passed by CCCE & ST (Appeals-II), Hyderabad)
Yash International ..... Appellant(s)
Vs.
CCT, Medchal - G S T ..... Respondent(s)
Appearance Shri Lalit Mohan Chandra, Advocate for the Appellant. Shri Dass Thavanam, Superintendent/AR for the Respondent. Coram:
Hon'ble Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) Date of Hearing: 11.10.2018 Date of Decision: 11.10.2018 FINAL ORDER No. A/31313/2018 [Order per: M.V. Ravindran]
1. This appeal is directed against Order-in-Appeal No. HYD-EXCUS-MD-
AP2-250-17-18 dated 19.02.2018.
2. The relevant facts that arise for consideration are the appellants are manufacturers of electrical fans; during the year 2007, officers of DGCEI registered an offence case on appellant on the charge of irregular availment of CENVAT credit without receiving the inputs. During the investigation proceedings, appellants were directed to deposit an amount of Rs.25 lakhs which they have did so. Show cause notice dated 08.09.2008 was issued and was adjudicated by the adjudicating authority and by Order-in-Original No. 34/2009-Adjn (ADC) (C.Ex) dated 30.10.2009 confirmed demands of duty of Rs.25,76,136/- along with interest and a penalty of Rs.16 lakhs was (2) Appeal No: E/30604/2018 imposed. By the same order, the adjudicating authority appropriated the amount of Rs.25 lakhs as paid by the appellant during the investigation. Personal penalty of Rs.16 lakhs was also imposed on the Managing Director of the appellant. Aggrieved by such order, an appeal was preferred to the first appellate authority. After following due process of law, the first appellate authority upheld the Order-in-Original by Order-in-Appeal No. 93 & 94/2011 (H-IV) CE dated 26.12.2011. Appellant contested the said Order- in-Appeal before the Tribunal and Tribunal by Final Order No. A/31327- 31328/2016 dated 18.11.2016 set aside the Order-in-Appeal and allowed the appeals with consequential relief. The said order of the Tribunal is not contested by both sides. Consequently, based upon such final order, appellant filed refund claim with the adjudicating authority for an amount of Rs.43,96,019/- paid by them during the proceedings as also after the adjudication order was passed. The lower authorities after issuing show cause notice, restricted the refund claim to an extent of Rs.18,96,019/- and rejected refund claim of Rs.25 lakhs. Aggrieved by such adjudication order, an appeal was preferred before the first appellate authority. The first appellate authority in the impugned order has deprecated the findings of the adjudicating authority for two grounds raised for rejection as being technical in nature and held legally unsustainable, however, he agreed with the views of the adjudication authority that the amount of Rs.25 lakhs for which credit was raised in PLA, was not debited during 2007 and was subsequently debited in 2017, hence refund claim filed on 23.02.2017 is premature, coming to such conclusion he rejected the appeal filed by the appellant.
3. Learned counsel after taking the bench through the relevant papers submits that the first appellate authority has not considered the factual matrix of realisation of cheques issued by the appellant in the Government (3) Appeal No: E/30604/2018 Treasury. He draws our attention to Pg.77 in Appeal Memoranda, wherein the State Bank of India had given certificate that an amount of Rs.25 lakhs was debited to the account of appellant herein and credited to Government account by GAR-7 Challan No. 66038 dated 13.09.2007 & GAR-7 Challan No. 66044 dated 14.09.2007. It is his submission that once the amount stands credited to the account of Government, the question of debiting PLA and denying refund claim only on this ground is incorrect. He would also draw our attention to Final Order No. 603 & 604/2011 dated 15.09.2011, passed by this bench, when the matters were remanded back to the lower authorities and submits that the Tribunal had also perused that the appellant had paid an amount of Rs.25 lakhs with the Government. He would submit that the first appellate authority was in error in rejecting the appeal as amounts deposited during the investigation has to be refunded merely on submission of a letter. It is his further submission that this proposal is well settled and reliance upon recent decisions of the Tribunal in the case of Parle Agro Pvt Ltd [2018 (360) ELT 1005 (Tri-All)], Tycon Automation Pvt Ltd [2017 (358) ELT 1058 (Tri-All)] and Usha International [2017 (357) ELT 532 (Tri-Mumbai)].
4. Learned departmental representative submits that current account/PLA which is maintained by the appellant was credited by an amount of Rs.25 lakhs when they deposited the amount during the investigation of the records but they never debited the amount in order to show the receipt of the amount in the Government Treasury. It is his submission that till the refund claim was rejected by the adjudicating authority i.e., on April, 2017, appellant had not debited the PLA by the amount. It is his submission that on the contrary, appellant had been misguiding the higher judicial forum that they have deposited an amount of (4) Appeal No: E/30604/2018 Rs.25 lakhs during investigation. It is his further submission that all the payments made by the assessee needs to be done through e-payment is the law and the challans which are annexed to the appeal memoranda are of physical deposits of the amounts involved. It is his submission that since amounts are not debited in the PLA, it cannot be stated that the said amount was paid to the Government during investigation.
5. I have considered the submission made by both sides and perused the records.
6. The issue involved in this case is regarding the refund of amount of Rs.25 lakhs which is rejected. The findings of the first appellate authority for rejecting such refund claim are at Para 5.2.1 which is reproduced.
"5.2.1. As regards the other ground for rejection of refund claim it is mentioned in the impugned order that the amount of Rs.25,00,000/- which was deposited against the case registered was taken as credit in their PLA and retained this credit balance; the amount stands accrued to the national exchequer only when the same is debited in PLA; therefore when the amount is available as credit in their PLA without being debited, the question of refund of the same does not arise. It is also mentioned that it would be a traversy, if the refund is granted for full amount of Rs.43,96,019/- ignoring the availability of Rs.25,00,000/- at their disposal as it would fetch double benefit to the appellants as they can utilize the balance of Rs.25,00,000/- lying in their PLA post sanction of refund. In response to this, in the grounds of appeal the appellants have mentioned that they made a debit entry in the PLA, hence they are entitled for refund of the amount is cash. They enclosed a copy of a folio of PLA for the month of April, 2017 showing debit of Rs.25,00,000/-"
7. It can be seen from the above reproduced Para, the only reason for rejecting the refund claim is that the appellant has not debited the PLA with the amount of Rs.25 lakhs an debited the same in April, 2017 only. Hence, the refund claim is premature. In my considered view, the first appellate authority has not considered the issue holistically, as it is on record and admitted, Order-in-Original No. 34/2009 dated 30.10.2009 confirmed demands raised by the appellant contained in the order portion, an appropriation of amount of Rs.25 lakhs already paid by the appellant. If an (5) Appeal No: E/30604/2018 amount of Rs.25 lakhs stands appropriated on 30.10.2009, the case made out by the revenue that appellant had not debited amount in PLA and hence not eligible for refund is totally incorrect proposition. It is also to be noted that Tribunal has also recorded that this amount is debited by the appellant to the Government Treasury. On perusal of certificate issued by the State Bank of India which is annexed to appeal memoranda at Pg. 77, we do find that SBI has categorically stated that amounts are debited to appellant's account on 13th and 14th September, 2007 which would mean that the amounts have been credited with CBEC/Government of India. On such overwhelming evidence indicating the payment to the Government Treasury, I find that both the lower authorities were in error in not sanctioning the refund claims of Rs.25 lakhs to appellant.
8. In view of the foregoing, I hold that the impugned order needs to be set aside and appeal of the appellant needs to be allowed with direction to adjudicating authority to sanction refund of Rs.25,00,000/- immediately.
9. Appeal disposed of as indicated herein above.
(Operative Part of this order was pronounced in the Open Court on conclusion of hearing) (M.V. RAVINDRAN) MEMBER (JUDICIAL) Veda