Appellant entitled to refund of Rs. 46,97,000 deposited under protest after Tribunal's favorable decision attained finality

CESTAT Chandigarh allowed appellant's appeal regarding refund of duty paid under protest. Initially, duty demand of Rs. 46,96,664/- with interest and penalty was confirmed by lower authorities. Tribunal's 24.08.2016 order allowed appellant's appeal with consequential relief. Appellant deposited Rs. 15,45,000/- during investigation and later paid Rs. 46,97,000/- under protest by debiting Cenvat credit to avoid future interest liability. Department withdrew its appeal on monetary grounds on 20.09.2018. Lower authorities wrongly rejected refund claim. Since Tribunal's decision attained finality, appellant entitled to refund of Rs. 46,97,000/- deposited under protest by debiting RG-23A account.

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Issues involved: Appeal against rejection of refund claim u/s Central Excise Tariff Act, 1985; Challenge to impugned order dated 25.03.2023; Withdrawal of appeal by department from Hon'ble High Court; Rejection of refund claim by adjudicating authority; Appellant's entitlement to refund.

The appellant, engaged in manufacturing re-rolled products of Iron & Steel, received a show cause notice alleging clandestine receipt of inputs and subsequent clearance of final products without duty payment. After various proceedings, including appeal to the Tribunal, a refund claim of Rs. 15,45,000/- was allowed/sanctioned. Subsequently, a show cause notice was issued for recovery of the sanctioned refund, leading to the appellant debiting Rs. 46,97,000/- under protest to avoid interest liability pending department's appeal challenge to the Tribunal's order (24.08.2016). The department later withdrew its appeal, prompting the appellant to file a refund claim of Rs. 62,42,000/-, including the earlier sanctioned amount. However, the refund claim was rejected, leading to the present appeal against the impugned order dated 25.03.2023.

The appellant contended that the impugned order failed to appreciate the facts and law, emphasizing the Tribunal's previous order allowing the appeal with consequential relief. The appellant argued that the duty amount was deposited under protest upon department's appeal challenge, which was later withdrawn, rendering the Tribunal's order final. The appellant asserted the right to claim the deposited amount as a refund, disputing the department's objection to the Cenvat credit utilization without issuing a show cause notice.

After considering submissions, the Tribunal found that the duty demand was initially confirmed but later set aside by the Tribunal's order dated 24.08.2016. The appellant's deposit under protest and subsequent refund claim were in response to the department's appeal challenge, which was later withdrawn. The Tribunal concluded that the appellant was entitled to the refund of Rs. 46,97,000/- deposited under protest, based on the finality of the Tribunal's order dated 24.08.2016. Consequently, the impugned order was set aside, and the appellant's appeal was allowed for the refund amount, with any consequential relief as per law.

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