2023 (2) TMI 834 - AT - Customs

Tribunal Upholds Refund Decision, Emphasizes CBEC Circulars

C.C. -KANDLA Versus GOODEARTH MARITIME LTD

The Tribunal upheld the Commissioner (Appeals) decision to grant a refund of cost recovery charges to the appellant. Despite the pending appeal before the ... Refund of Cost recovery charges paid - revenue submits that though the department has challenged the order of this Tribunal but no stay has been granted by the Hon’ble High Court - HELD THAT:- The Learned Commissioner (appeals) has granted the refund in pursuance to this Tribunal’s order in GOODEARTH MARITIME LIMITED VERSUS COMMISSIONER OF CUSTOMS, KANDLA [2020 (3) TMI 494 - CESTAT AHMEDABAD], whereby on merit the demand of cost recovery charges was set aside. Hence this refund is consequential relief to the afore said Tribunal’s order. Though the revenue has challenged the order of this tribunal before the High Court but, since there is no stay, the order of the Commissioner (Appeals) cannot be disturbed. Therefore, in view of this Tribunal’s order, since the demand of cost recovery charges has been set aside, the appellant was rightly granted the refund by the learned commissioner (appeals). The Central Board of Excise and Custom has repeatedly clarified that when any refund arises out of any order of adjudication/Commissioner (Appeals)/ CESTAT unless a stay order is obtained refund must be granted after 3 months from the date of the order. In the above circular the board has reiterated its earlier circular No. 572/9/2001-cx dated 22.02.01 which clarified that against the order from which the refund arises is not stayed by the higher authority within 3 months the refund must be granted - In the present case the Department has withheld the refund merely for the reason that this Tribunal’s order GOODEARTH MARITIME LIMITED, has been appealed against before the Hon’ble High Court of Gujarat under tax Appeal No: 299 of 2020. However, even after 2 years of filing tax appeal no stay could be obtained by the revenue. The revenue has no option except to grant the refund to the respondent. Accordingly, neither the stay application nor the appeal against the order of the Commissioner (Appeals) granting refund are not maintainable - there are no infirmity in the orders of the Commissioner (Appeals), hence, the same are upheld Revenue’s appeals are dismissed. Issues Involved:1. Eligibility for refund of cost recovery charges.2. Impact of pending appeal before the High Court on the refund order.3. Adherence to CBEC Circulars regarding the grant of refunds.Issue-wise Detailed Analysis:1. Eligibility for Refund of Cost Recovery Charges:The primary issue in this case is whether the appellant is eligible for a refund of cost recovery charges paid. The Learned Commissioner (Appeals) had ordered the refund of these charges based on the Tribunal's order No. A/10788/2020, dated 12.03.2020, which set aside the demand for cost recovery charges. The Tribunal found that since the demand for cost recovery charges was set aside on merit, the refund was a consequential relief. Therefore, the appellant was rightly granted the refund by the Learned Commissioner (Appeals).2. Impact of Pending Appeal Before the High Court on the Refund Order:The revenue argued that since the Tribunal's order, which formed the basis for the refund, was challenged before the Hon'ble Gujarat High Court, a stay should be granted on the refund order. However, the Tribunal noted that no stay had been granted by the High Court. According to the CBEC Circular No. 572/9/2001-CX., dated 22.02.2001, unless a stay order is obtained, refunds must be granted after three months from the date of the order. The Tribunal emphasized that the absence of a stay order from the High Court meant that the order of the Commissioner (Appeals) could not be disturbed.3. Adherence to CBEC Circulars Regarding the Grant of Refunds:The Tribunal highlighted the binding nature of CBEC Circulars on departmental officers, referencing the Hon'ble Larger Bench judgment in the case of Ratan Melting & Wire Industries- 2008 (231) ELT 22 (S.C). The relevant circulars, including Circular No. 695/11/2003-CX., dated 24-2-2003, clarified that refunds should be processed unless a stay is obtained from a higher judicial forum. The Tribunal noted that the revenue had withheld the refund merely because the Tribunal's order was under appeal, without obtaining a stay even after two years. Consequently, the Tribunal concluded that the refund must be granted in compliance with the binding circulars.Conclusion:The Tribunal upheld the orders of the Commissioner (Appeals) and dismissed the revenue's appeals, finding no infirmity in the Commissioner's decision to grant the refund. The stay applications were deemed infructuous and dismissed accordingly. The Tribunal reiterated that the revenue had no option but to grant the refund to the respondent, emphasizing the binding nature of CBEC Circulars and the absence of a stay order from the High Court.