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2014 (11) TMI 702 - HC - Central ExciseDenial of refund claim - Submission of photocopy of relevant documents - refund claim was with respect to Cenvat Credit in respect of input used in the manufacture of final product and in regard to which, a show cause notice for recovery of wrongly availed Cenvat Credit had been issued by the Commissioner - bonafide belief that application returned not rejected - Held that:- Petitioner perceived the communication dated 26th May, 2008 as a communication returning the petitioner’s application for refund and did not consider it as an order rejecting the refund claim. It is only when the petitioner approached this Court by filing Application [2014 (11) TMI 656 - GUJARAT HIGH COURT] making prayer for decision on the refund claim that the Court clarified the position and held that the communication dated 26th May, 2008 was an order rejecting the petitioner’s refund application and that therefore, there was no further need to give any direction to decide such application. The petitioner had a bona fide belief may be erroneously held that the communication dated 26th May, 2008 was not an order rejecting his refund claim. In our view, the petitioner could bona fide hold such a belief, though as held by this Court, such a belief was erroneous. Firstly because, the Deputy Commissioner returned the application along with annexed documents to the petitioner. In our experience, when the authority decides to rejects the refund application, we have never come across an incident where the application itself is returned. Secondly, the normal procedure is to issue show cause notice why such refund application should not be rejected before final decision is taken. All quasi judicial orders passed by the Dy. Commissioners which are appealable also come with format specifying that the order is appealable, the period within which such appeal could be filed and the appellate authority before which the appeal could lie. In the present case, admittedly no such steps were taken by the Deputy Commissioner. He summarily disposed of the petitioner’s refund application by returning the application and the annexures accompanying it. If, therefore, the petitioner held a honest belief that his application was not rejected but only returned and he therefore persuaded the cause with the said authority, we see no lack of bona fide on his part. The petitioner, therefore, requested the Deputy Commissioner to pass an order, after hearing him, which he can appeal against, if the Deputy Commissioner was of the opinion that the refund claim was to be rejected. At no stage, the Deputy Commissioner in response to the petitioner’s communications conveyed to him that his refund application is already rejected and there is no scope of any further decision. Department has not produced any proof of service of the communication dated 19th August, 2009. In such communication, the petitioner was granted 10 days to clarify how refund could be granted when the Commissioner has issued show cause notice why wrongly taken Cenvat credit not be withdrawn; failing which the application shall stand rejected. When such a communication was not served on the petitioner, he obviously could not respond to the same within 10 days as granted, or any time thereafter. Order of Deputy Commissioner was passed without any notice to the petitioner. The first order dated 26th May, 2008 was passed without a show cause notice as to why the refund claim should not be rejected. Secondly, it is based on Deputy Commissioner’s belief that the petitioner had wrongly availed Cenvat Credit. For such purpose, the Commissioner of Central Excise, Vapi had already issued a show cause notice dated 17th July, 2007 and such proceedings were pending. Therefore, to press in service, the element of wrongful availment of Cenvat credit for rejecting a refund claim, an issue which was still to be adjudicated, in our opinion, was wholly wrong. - Matter remanded back - Decided in favour of assessee.
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