2021 (12) TMI 284 - CESTAT NEW DELHI - Central Excise

Head Note / Extract:
Refund of amount deposited as pre-deposit - amount deposited in excess of the mandatory pre-deposit shall be treated as deposit under section 35 F of the Central Excise Act or not? - para 3 of Circular No.984/08/2014 dated 16.09.2014 - HELD THAT:- The impugned refund cannot be called as refund of amount of pre-deposit nor has been claimed so by the appellant. The amount to the extent of pre-deposit out of aforesaid ₹ 66 Lakhs was ₹ 44 Lakhs which has already been refunded in favour of the appellant. The proposals of duty demand have been set aside. Hence, it becomes clear that appellant was not liable to pay ₹ 66 Lakhs. ₹ 44 Lakhs whereof were required as an amount of pre-deposit till the appeal of the appellant was not decided by the Tribunal. Once the Tribunal’s order setting aside the demand had attained finality, the amount equivalent to the 10% of the impugned duty was calculated as ₹ 44 Lakhs, hence, was refunded. However, ₹ 21 Lakhs is also part of such money of appellant for which he was never liable towards the Department. Accordingly, Department is not entitled to retain the same or to become unjustly rich by retaining the money of the assessee. Once the proposed duty demand against the appellants stands set aside, the entire basis of deposit as was made by the appellant fails to survive. Department cannot be allowed to retain any part of the said amount. The amount of ₹ 21 Lakhs is an amount of “deposit made under protest “it cannot be called as duty. Question of applicability of section 11B of Central Excise Act does not at all arise. The findings of Commissioner (Appeals) to this effect are, therefore, held to be wrong. Rejection to the extent of ₹ 6 Lakhs on the ground of no proof for said amount to be debited from the credit ledger - HELD THAT:- It is observed from the record that the said amount of ₹ 6 Lakhs is depicted in ER-1 for the period June, 2017 as a closing balance. The GST regime was introduced w.e.f. July 1, 2017. It is also observed that the said amount has not been claimed as credit under GST through form GST TRAN-1. Hence, it was the amount which is standing as a closing balance in ER-1 as on June 30, 2017 which was not transferred to GST Regime. Hence, is as good as the cash lying with the Department and has to be treated as equal to the debit of the Cenvat account in terms of Section 142 of GST Act. The said amount has mandatorily to be refunded to the assessee in cash. It stands clear that appellant is entitled for refund of ₹ 15 Lakhs as were paid in cash by him at the time of the investigation of the impugned proceedings and is also entitled for refund of ₹ 6 Lakhs in cash as was being paid from his Cenvat Credit Account at the same stage as mentioned above and that appellant has been held to not to be liable to pay the alleged amount of duty which includes said ₹ 21 Lakh also. Accordingly, the refund claim of ₹ 21 Lakhs has wrongly been rejected by the Adjudicating Authority below. Appeal allowed - decided in favor of appellant.