Refund claims are not premature after annulment of demand orders; revenue cannot retain payments without authority of law.

When orders-in-original demanding duty, penalty and redemption fine were annulled for want of jurisdiction and remanded for de novo adjudication, the amounts paid under those orders could not continue to be retained by the revenue. The pendency of fresh adjudication did not make the refund claims premature, because no subsisting order then fastened liability on the assessee. The settled principle applied was that money cannot be retained without authority of law merely because re-adjudication is pending, and the refund rejections were therefore unsustainable.

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Issues: Whether the respondents could retain duty, penalty and redemption fine deposited pursuant to orders-in-original after those orders were annulled in appeal, and whether the petitioners' refund claims were premature.

Analysis: The orders-in-original had been set aside by the appellate authority for want of jurisdiction and the matters were remanded for fresh adjudication. Once those orders ceased to exist in law, the amounts paid pursuant to them could no longer be retained by the department. The fact that de novo adjudication was pending did not make the refund claims premature, because there was then no subsisting adjudication fastening any liability on the petitioners. The Court followed the settled principle that the revenue cannot hold on to money without authority of law merely because re-adjudication is pending.

Conclusion: The respondents were not entitled to retain the amounts, and the refund claims could not be rejected as premature; the issue was decided in favour of the assessee.

Final Conclusion: The communications rejecting the refund claims were quashed, and the petitioners were held entitled to have their refund claims considered afresh in accordance with law.

Ratio Decidendi: Once an adjudication order demanding duty or imposing penalty is annulled, the amounts paid under that order cannot be retained by the revenue merely because the matter is remanded for de novo adjudication.

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