Recovery of refunded CENVAT credit cannot proceed after binding refund orders unless the Revenue obtains Supreme Court relief.

A show cause notice seeking recovery of refunded CENVAT credit and interest was unsustainable where the refund and delayed-refund interest had already been sanctioned under binding Tribunal and court directions. The Revenue could not treat the payment as erroneous merely because it had filed, or proposed to file, an SLP; unless it succeeded before the Supreme Court or obtained protective relief, it had no basis to reopen recovery of amounts already paid pursuant to those orders. The Delhi High Court quashed the notice.

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Issues: Whether a show cause notice seeking recovery of refunded CENVAT credit and interest could be sustained after the refund and interest had been granted pursuant to earlier adjudication and judicial orders.

Analysis: The refund amount and the interest on delayed refund had already been sanctioned pursuant to the Tribunal's order and the Court's direction under Section 11-BB of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. The Revenue's grievance against the refund order had already failed before the Court, and the only basis in the impugned notice was the stated filing or proposed filing of an SLP. Until the Revenue succeeds before the Supreme Court or obtains protective orders there, it cannot unilaterally treat the refund and interest already paid pursuant to binding orders as erroneous and seek recovery.

Conclusion: The show cause notice was unsustainable and was quashed.

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