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M/s Shoreline Hotel Pvt. Ltd. Versus Commissioner of Central Excise, Mumbai-I And Vice-Versa

2016 (3) TMI 806 - CESTAT MUMBAI

Refund claim - pre-deposit - Held that:- In the instant case, an amount of ₹ 11 lakhs was deposited during investigation and was appropriated in the Order-in-Original. The said Order-in-Original was set aside by the order of the Tribunal dated 19.7.2005 and hence, in terms of the Circular No. 802/35/04-CX dated 8.12.2004 the refund of ₹ 11 lakhs becomes due along with interest at the applicable rate. In this very case, this Tribunal has ordered refund of pre-deposit along with intere .....

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of the above, the appellants are also entitled to interest - Appeal No. E/396, 453 & 1769/11 - Dated:- 13-1-2016 - SHRI RAJU, MEMBER (TECHNICAL) For the Petitioner : Shri R.D. Wagley, Advocate with Ms. Anagha Gavade, Advocate For the Respondent : Shri N.N. Prabhudesai, Supdt. (AR) ORDER PER: RAJU M/s Shoreline Hotel Pvt. Ltd. (hereinafter called as SHPL) were visited by the Revenue officers on 11.11.1997 by the Central Excise Officers. A case was booked against them in respect of furniture found .....

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and why ₹ 11 Lakhs paid by them not be appropriated against it. The notice dated 21.11.2000 against M/s Interscape was adjudicated and the duty was confirmed against M/s Interscape. In the same order, the furniture found in the premises of M/s SHPL was confiscated and was redeemed after adjusting ₹ 11 lakhs already paid by them. Subsequently, on 29.1.2001, the notice dated 15.4.1998 raised against M/s SHPL was dropped. M/s SHPL filed an appeal challenging the said order before the T .....

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HPL filed a refund claim again which was rejected by Assistant Commissioner on 20.8.2010. M/s SHPL filed an appeal before Commissioner (Appeals), who allowed their appeal and ordered refund of pre-deposit of ₹ 11 lakhs. However, he did not order anything in respect of interest thereon. Consequently, M/s SHPL filed an appeal to CESTAT (E/396/2011) seeking direction for Commissioner (Appeals) to pass order in respect of payment of interest. Meanwhile, Revenue also filed an appeal against the .....

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. The Tribunal in that case had observed that such pre-deposit needs to be refunded along with interest within three months of the remand order of CESTAT. In the review, it was argued that the said order of the Tribunal is not applicable to M/s SHPL. It was argued that since the case is pending adjudication, therefore, the refund of M/s SHPL is premature. It was argued in the review petition that as the appeal of the party is pending in CESTAT, the Commissioner (Appeals) ought to not have decide .....

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ainst the said order of the Commissioner (A) seeking directions to Commissioner (A) to pass suitable orders for grant of interest. Later on Dy. Commissioner of Central Excise following the order of Commissioner (A) sanctioned refund of ₹ 11 lakhs vide order dated 9/10.8.2011. M/s SHPL filed an appeal before Commissioner (Appeals) against the said refund order seeking interest on the refund. The Commissioner (Appeals) vide order dated 30.11.2011 rejected the claim of interest on the ground .....

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e order dated 30.11.2011 rejecting the interest claimed on the refund sanctioned. Both are being heard together alongwith the appeal of revenue against the order of Commissioner (Appeals) dated 20.12.10 directing sanction of refund. 3. Learned Counsel for M/s SHPL prepared a chart of above event and explained the same. He argued that ₹ 11 lakhs were paid in 1997/98 in respect of investigation conducted by the Central Excise officers and consequently a show-cause notice was issued on 15.4.1 .....

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ated in a different investigation. He also argued that the amount of ₹ 11 lakhs deposited during investigation should be treated as a pre-deposit and benefit of Circular No. 802/35/04-CX dated 8.12.2004 should be granted. The said Circular directs that the pre-deposit shall be returned within a period of three months of the disposal of the appeal in the assessee s favour. The said Circular also states that default will entail an interest liability, if such liability accrues by reason of an .....

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ction 35F of the Central Excise Act, 1944. 4. The learned AR relies on the impugned order and on grounds of appeal. He argued that on 22.6.2010, the refund claim was returned to M/s SHPL by an order. M/s SHPL had not challenged the said order and, therefore, are not entitled to any refund claim. He further argued that in this case the cause of action for refund does not arise, as the case is still pending adjudication before Commissioner after remand by Tribunal. He argued that in case of Inters .....

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12.2010, is incorrect as the said order was not in respect of M/s SHPL. He argued that the order of CESTAT in case of Interscape cannot be made applicable to M/s SHPL in view of the following decisions: - (i) Mafatlal Industries Ltd. Vs. Union of India - 1997 (89) ELT 247 (SC), wherein the Hon'ble Supreme Court has held that the theory of mistake of law and the consequent period of limitation of three years from the date of discovery of such mistake of law cannot be invoked by an assessee ta .....

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s case has led him to discover the mistake of law under which he has paid the tax nor can he claim that he is entitled to prefer a writ petition or to institute a suit within three years of such alleged discovery of mistake of law. (ii) He also relied on the decision of the Tribunal in case of Commissioner of Central Excise, Allahabad Vs. V.N. Dyes & Processors P. Ltd. - 2004 (167) ELT 183 (Tri-Del) wherein the Tribunal has held as under: - 4. I have gone through the record and in my view th .....

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missioner (Appeals) that the galleries could not be added while determining the ACP of the furnace of an assessee, still, the same was required to be got set aside. The respondents rather accepted that order and paid the duty. They cannot under the law be permitted to take advantage of the judgments rendered in favour of the other assessees. They have to stand on their own legs and any benefit allowed by the Tribunal or the Court on a similar issue to another assessee, that cannot be claimed as .....

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uently cannot be sustained and is set aside. The appeal of the Revenue is allowed. 5. I have gone through the rival contentions. I find that M/s SHPL had paid an amount of ₹ 11 lakhs during 10.12.1997 to 3.2.1998, whereas statements were recorded during the period 11.11.1997, when the officers visited the SHPL premises, to 15.4.1998, when the first show-cause notice was issued. Subsequently, it is noticed that on the same set of statement recorded during 11.11.97 to 15.4.98, another show-c .....

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SHPL. The order further goes on to give an option to M/s SHPL for redemption of such goods on payment of redemption fine of ₹ 11 lakhs in lieu of confiscation. The order also appropriated ₹ 11 lakhs paid by them. It is seen that in respect of same set of investigation and statements recorded, two show-cause notices were issued at the gap of two and half years. The second show-cause notice issued on 21.11.2000 was confirmed o 23.01.2001 and first show-cause notice issued on 15.4.1998 .....

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earned Counsel that on conclusion of first show-cause notice, the amount deposited by them in 1997-98 became due for refund is misplaced. 5.1 The second show-cause notice which was confirmed on 23.1.2001 was set aside by the Tribunal vide order dated 19.7.2005. The appellants have relied on the following decisions to assert that deposit made during investigation is to be treated as pre-deposit and are liable to be refunded on success of litigation: - (i) Rajiv Plastic Industries Vs. Commissioner .....

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