2021 (7) TMI 734 - AT - Customs

Customs Act: Refund entitlement modified, 10% pre-deposit required. Tribunal directs fresh decision on refund adjustment.

Nayara Energy Ltd Versus C.C. -Jamnagar (prev)

Nayara Energy Ltd Versus C.C. -Jamnagar (prev) - TMI Issues involved:1. Entitlement for refund of a specific amount under Customs Act.2. Requirement of pre-deposit at the second appeal stage.3. Appropriation of refund against sanctioned drawback claims.Analysis:Issue 1: Entitlement for refund under Customs ActThe appeal in question revolved around the entitlement of the appellant for a refund of Rs. 1,99,97,500. The Commissioner (Appeals) allowed the revenue's appeal, stating that the appellant needed to pay an additional 10% over and above the 7.5% pre-deposit as per Section 129E of the Customs Act. The original authority's order allowing the refund was set aside. Subsequently, the appellant filed appeals against the impugned order, arguing for their entitlement to the refund.Issue 2: Requirement of pre-deposit at the second appeal stageThe main contention here was whether the appellant was obligated to make a pre-deposit of 7.5% + 10% at the second appeal stage. The appellant cited a judgment of the Hon'ble Delhi High Court in the case of SANTANI SALES ORGANIZATION, asserting their right to the refund based on this precedent. The Tribunal examined the relevant portions of the judgment and concluded that the appellant was only required to pay a total of 10%, with 7.5% at the first appellate stage and the remaining 2.5% at the CESTAT stage. The previous view that the appellant had to pay a total of 17.5% was deemed illegal, leading to the modification of the impugned order.Issue 3: Appropriation of refund against sanctioned drawback claimsRegarding the adjustment of the sanctioned refund against drawback claims, it was found that the amount in question had been sanctioned and disbursed by the Original Adjudicating Authority. However, due to an appeal filed by the department, an arrangement was made between the deputy commissioner and the appellant. The adjustment against the amount already disbursed was made as a result of the sanctioned refund of the pre-deposit. The Tribunal, after disposing of the related appeal, directed a fresh decision by the Adjudicating Authority specifically on the aspect of the adjustment of the sanctioned refund against the previously sanctioned drawback claim.In conclusion, the impugned orders related to the entitlement for refund and the appropriation against drawback claims were modified, and the appeals were allowed for a fresh decision in light of the Tribunal's observations and judgments.