2007 (4) TMI 474 - AT - Central Excise

Appeal allowed, review refund order before recovery. Compliance with legal requirements and proper procedures crucial.

The Tribunal allowed the appeal, emphasizing the necessity of reviewing the refund order before recovery, as per legal requirements and Board's ... Recovery of erroneous granted refund - Held that: - the order of refund dt. 26-4-04 has not been appealed against or reviewed by the Department and therefore recovery of the refund of ₹ 1,11,744/- paid from the appellant by issue of show cause notice under Section 11A is not in order - appeal allowed - decided in favor of appellant. Issues:- Recovery of refunded amount without review of the original refund order.Analysis:The case involves an appeal against the order of the Commissioner (Appeals) upholding the recovery of a refunded amount without reviewing the original refund order. The appellant, a manufacturing unit, protested against the duty payment on diesel engines used in manufacturing centrifugal pump sets meant for export. The second unit of the company, under a different range, cleared diesel engines on payment of duty and claimed a refund, which was sanctioned but later ordered for recovery without reviewing the refund order. The appellant argued that since the original refund order was not appealed against or reviewed by the Department, the recovery was improper, citing a precedent where recovery of an erroneous refund required a review of the refund order. The Tribunal, following the precedent, allowed the appeal, emphasizing the necessity of reviewing the refund order before recovery, as per legal requirements and Board's instructions.In conclusion, the Tribunal allowed the appeal, highlighting the legal infirmity in the recovery of the refunded amount without reviewing the original refund order. The decision was based on the precedent that recovery of an erroneous refund necessitates a review of the refund order itself, as per statutory requirements and Board's instructions. The Tribunal emphasized the importance of following proper procedures, including issuing a Show Cause Notice under Section 11A before recovery, and reviewing the refund order to rectify any errors or discrepancies. The judgment serves as a reminder of the legal obligations and procedural safeguards in cases involving the recovery of refunds, ensuring compliance with established guidelines and principles of natural justice.