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Commissioner of Central Excise, Kolkata-IV Versus M/s. Hindusthan Engineering & Industries Ltd.

Admissibility of refund claim - MODVAT Credit once taken and paid back - Appropriate documents submitted - Revenue contended that amount paid back was voluntary payment but respondent is of the view that payment cannot be considered as an admission of improperly taken credit and has to be treated as a deposit with the Department.

Held that:- by relying on the judgment of Hon'ble Apex Court in the case of Tractors and Farm Equipment Ltd. vs. CC, Madras [1997 (2) TMI 111 - SUPREME COURT .....

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t : Shri Saurabh Bagaria & Shri Partha Banerjee, Advocates ORDER PER SHRI H.K.THAKUR. This Appeal has been filed by the Revenue against Order-in-Appeal No.08/KOL-IV/2011 dated 21.01.2011 passed by Commissioner(Appeals), Kolkata-V under which Order-in-Original dated 02.07.2007 passed by the Adjudicating Authority has been set aside. Under Order-in-Original dated 02.07.2007 Adjudicating Authority rejected a refund claim of ₹ 8,63,245.82 filed by the Appellant. 2. Shri K.Chowdhury, Supdt. .....

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med DGCEI Authorities that the payment is made to settle the difference, to buy peace and maintain cordial relations with the Department. That on 02.12.1997 a Show Cause Notice was issued to the Respondent only with respect to imposition of penalty upon the Respondent under Rule 173Q of the Central Excise Rules, 1944. That Adjudicating Authority under Order-in-Original dated 06.08.2001 imposed a penalty of ₹ 1.00 Lakh upon the Respondent against which Appeal was filed and Commissioner(Appe .....

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allowed the appeal as per para-6 holding that Appellant at no stage has accepted its liability and inadmissibility of MODVAT Credit. The ld.AR made the Bench go through the letter dated 07.05.1997 written by the Respondent to DGCEI and emphasized that amount was paid voluntarily by the Respondent with respect to inadmissible MODVAT Credit. He also made the Bench go through para 5 of Order dated 05.01.2006 passed by this Bench in the first round of litigation where a specific observation has bee .....

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dent. It was argued by Shri Bagaria that Respondent never accepted the duty liability and amount was paid as a result of coercion by the Investigating Agency. That amount paid has not been appropriated by the Adjudicating Authority and has to be considered as a deposit for which no time limit is applicable. He relied upon the case law decided by this Bench in the case of Steel Products Ltd. vs. CCE, Kol-II [2003 (158) ELT 476(Tri.-Kolkata). It was also his case that doctrine of unjust enrichment .....

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tries [2003 (157) ELT 498(SC) 4. As a counter to the arguments made by the ld.Advocate of the Respondent Shri Chowdhury (AR) argued that this Bench in the case of Steel Products Ltd. vs. CCE, Kol-II relied upon Gujarat High Court s decision in the case of Parle International Ltd. v. UOI [2001 (127) ELT 329(Guj.)], which has been set aside by Honble Supreme Court as per citation Commissioner v. Parle International Ltd. [2005 (188) ELT A-81(SC)]. 5. Heard both sides and perused the case records. .....

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en to DGCEI(earlier named as DGAE) indicating that the amount paid is towards MODVAT Credit taken by the Respondent. It is the case of the Revenue that amount paid back was voluntary payment. On the other hand Respondent is of the view that the payment cannot be considered as an admission of improperly taken credit and has to be treated as a deposit with the Department. In this regard it is observed from para 5 of Order No.A-5/KOL/06 dated 05.01.2006 passed by this Bench in the earlier proceedin .....

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Corporation was taken under the cover of appropriate documents. However, no Appeal against the admissibility of MODVAT Credit was preferred by the Respondent before the Commissioner(Appeals) and CESTAT in the first round of litigation to stake a claim on admissibility of credit. If Respondent was of the view that MODVAT Credit and resultant refund is admissible then they should have filed an Appeal on this aspect before the First Appellate Authority and this Bench in the first round of litigatio .....

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