TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal rules in favor of appellants, sets aside recovery orders, allowing refund claims based on CENVAT credit.</h1> <h3>M/s Ozone Pharmaceuticals and M/s Ozone Ayurvedics Limited Versus Commissioner of Central Excise & Service Tax, Guwahati</h3> M/s Ozone Pharmaceuticals and M/s Ozone Ayurvedics Limited Versus Commissioner of Central Excise & Service Tax, Guwahati - TMI Issues Involved:1. Retrospective amendment of Notification No. 32/99-CE by Notification No. 61/2002-CE.2. Utilization of accumulated CENVAT credit.3. Legitimacy of refund claims and subsequent recovery orders.4. Revenue neutrality and actual loss to the revenue.5. Procedural fairness in issuing recovery orders without notice.Issue-wise Summary:1. Retrospective Amendment of Notification No. 32/99-CE by Notification No. 61/2002-CE:Notification No. 61/2002-CE amended Notification No. 32/99-CE, effective from 23.12.2002, requiring manufacturers to utilize the entire amount of CENVAT credit before claiming a refund of excise duty paid through PLA. The Finance Act, 2003, gave this amendment retrospective effect from 08.07.1999, implying that the restrictive condition was deemed always to have been in place.2. Utilization of Accumulated CENVAT Credit:The appellants, M/s. Ozone Pharmaceuticals Limited and M/s. Ozone Ayurvedics, began utilizing their accumulated CENVAT credit for payment of duty starting from 23.12.2002. By June 2003, the balance in the CENVAT account was 'Nil' due to continuous utilization. As a result, no refund was claimed or sanctioned during February 2003 to May 2003.3. Legitimacy of Refund Claims and Subsequent Recovery Orders:The Deputy Commissioner of Central Excise, Guwahati, issued orders on 02.06.2023 and 03.06.2023, directing the appellants to pay the amounts refunded in excess during the period up to 22.12.2002, without giving notice. The appellants' representation for reassessment was not considered, leading to writ petitions and subsequent appeals. The Hon'ble Supreme Court directed the appellants to file an appeal before the Commissioner (Appeals), who upheld the Deputy Commissioner's orders.4. Revenue Neutrality and Actual Loss to the Revenue:The appellants argued that the excess refund claimed up to 22.12.2002 was adjusted by lower/nil refund claims during 23.12.2002 to May 2003 due to the utilization of accumulated CENVAT credit. They cited precedents where no demand was sustainable if no actual loss to the revenue occurred, emphasizing that the situation was revenue neutral.5. Procedural Fairness in Issuing Recovery Orders Without Notice:The appellants contended that recovery orders were issued without notice, violating procedural fairness. The Supreme Court had observed that facts and circumstances should be considered before making a recovery order. The Commissioner (Appeals) and the Tribunal's findings were deemed contrary to the Supreme Court's direction to consider the totality of facts and circumstances.Conclusion:The Tribunal found that the issue was no longer res integra, referencing similar cases where the utilization of CENVAT credit in subsequent months was deemed revenue neutral. It held that the refund claims for the subsequent period could not be rejected based on excess refund prior to 22.12.2002. Consequently, the Tribunal set aside the impugned order, allowing the appeals with consequential relief.(Pronounced in the open court on 26.09.2023)
TaxTMI 
TaxTMI 
