2018 (11) TMI 1511 - AT - Central Excise

Tax Tribunal Rejects Refund Challenge, Grants Relief

The Tribunal deemed the demand confirmed in Appeal No.E/421/2010 unsustainable as challenging assessment orders of refund claims after sanctioning without ... Recovery of refund - it was alleged that refund was erroneously sanctioned - Revenue has not challenged the order of sanctioning the refund claim - Held that:- The Revenue has not challenged the order of sanctioning the refund claim - provisions of Section 11A of the Act are not applicable to the facts of this case - demand not sustainable. The adjustment of refund is also not sustainable. Hence, the demand on account adjustment of refund is set aside. Denial of refund of education cess and higher education cess in terms of Notification No.56/02-CE dt.14.11.2002 - Held that:- As the issue has been settled by Hon’ble Supreme Court in the case of M/s. SRD Nutrients Pvt. Ltd. vs. CCE- Guwahati [2017 (11) TMI 655 - SUPREME COURT OF INDIA], therefore the appellant is entitled to claim refund of education cess and higher education cess paid by the appellant in terms N/N. 56/02-CE dt.14.11.2002. Appeal allowed - decided in favor of appellant. Issues:1. Confirmation of duty demand due to erroneously sanctioned refund.2. Adjustment of refund amount by the Revenue for the confirmed demand.3. Denial of refund on education cess and higher education cess.4. Applicability of Section 11A of the Act in challenging refund claim sanctioning.Analysis:1. The appellant filed two appeals against impugned orders confirming duty demand for erroneously sanctioned refund and adjusting the refund amount for the confirmed demand. The Revenue contended that the appellant was not entitled to claim refund for outward transportation charges under Notification No.56/02-CE dt.14.11.2002. Although the refund claim was sanctioned and not challenged, a show cause notice was later issued to demand the erroneously refunded duty. The Tribunal referred to a previous case and held that challenging the assessment orders of refund claims after sanctioning without following the prescribed statutory remedy was impermissible. Therefore, the demand confirmed in Appeal No.E/421/2010 was deemed unsustainable.2. The adjustment of refund in Appeal No.E/3701/2012 was also found unsustainable as the Revenue had not challenged the order sanctioning the refund claim. The Tribunal emphasized that the provisions of Section 11A of the Act were not applicable to the case, following the decision in a related High Court case. Consequently, the demand on account of the adjustment of refund was set aside.3. The appellant had challenged the denial of refund on education cess and higher education cess under Notification No.56/02-CE dt.14.11.2002 in Appeal No.E/3701/2012. Citing a Supreme Court case, the Tribunal ruled that the appellant was entitled to claim a refund of education cess and higher education cess paid, thereby overturning the denial of refund in the impugned orders.4. In conclusion, the Tribunal set aside the impugned orders and allowed the appeals with consequential relief, based on the findings regarding the unsustainable demands and the entitlement to claim a refund of education cess and higher education cess.