TaxTMI 
TaxTMI 
2025 (5) TMI 1992
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....at the Appellant is engaged in the manufacture of motorcycles, scooters, parts and accessories thereof. For the purpose of manufacturing, the Appellant procured various inputs and services on which it availed Cenvat credit. The Appellant was discharging its Central Excise duty by utilizing the Cenvat credit. However, the manufacturing of motorcycles and scooters also attracted the National Calamity Contingency Duty NCCD @ of 1% ad valorem. During the period under consideration, the proviso to Rule 3(4) of the Cenvat Credit Rules, 2004 was amended and the Cenvat credit of any duty, except that of NCCD, could not be utilized for payment of NCCD. Owing to bona fide mistake, the Appellant somehow missed such amendment and inadvertently paid the....
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....a detailed reply to the show cause notice dated 16.10.2018 wherein, it explained that the deposited amount never attained the character of duty and prayed that the refund must be granted alongwith interest. 6. 17.07.2020 The Assistant Commissioner, GST & CE Division-I vide Order-in-Original No.05-CX/REF/AC/DIV-I/GBN/2020-2021 rejected the refund claim by holding the same to be time barred. 7. 21.10.2020 Aggrieved by the order Appellant filed an appeal against the Order-in-Original dated 17.07.2020. 8. 15.04.2021 The Commissioner (Appeals) vide Order-in-Appeal allowed the appeal and set aside the OIO dated 17.07.2020. The Commissioner (Appeals) after considering the submissions of both the side, observed that such ....
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....ugned order to the extent it is prejudicial to the interest of the Appellant, the Appellant has filed the present appeal. 3. The learned Advocate appearing on behalf of the Appellant submits that the Adjudicating Authority sanctioned the refund of the full amount i.e. Rs.38,72,24,971/-, the interest granted was limited to only 7.5% of the total refund amount. The learned Commissioner (Appeals) upheld this decision, holding that interest cannot be granted on the entire refund as amount was not deposited under Section 35F of the Central Excise Act, 1944 which deals with mandatory pre-deposits for appeals. 4. Learned Advocate further argues thatRs.38,72,24,971/- was never treated as proper duty but instead as an excess payment, a mere 'd....
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....e the duty is paid twice by mistake of law or on facts, then the excess paid duty (whether first time or the second time) qualifies as a mere deposit and not duty and the provisions of Section 11B do not apply for the refund thereof. I also observe that in the present case also the doctrine of restitution is applicable and the adjudicating authority has rightly refunded the amount in question to the appellant. I therefore, find no merit in the argument of the department that the impugned OIO is not correct and proper as far as sanction of the refund of Rs.38,72,24,971/- to the party is concerned. However, as far as treating the 7.5% of the said amount as pre-deposit under Section 35F and granting interest on the said 7.5% under Section 35FF....
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....principle of restitution is crucial in this case. Restitution ensures that when an erroneous or unjust act results in one party benefiting at the expense of another, the benefiting party must restore what was wrongfully retained. In this case, since the Government retained the Rs.38,72,24,971/- wrongfully, it must compensate the Appellant by granting interest for the period during which the money remained with the Government. Although the Appellate Authority in Para 12 has accepted that Doctrine of Restitution is applicable in the present case but has failed to actually apply the doctrine in its true essence. The Department's prolonged retention of the amount deprived the Appellant of its rightful funds, and the Appellant should be compensa....
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....me Court, the Hon'ble High Court has held that:- "9. In absence of any statutory provision on the basis of which any such recovery can be made, the action of the respondent authorities in collecting the cheques from the petitioner cannot be sustained in law. The position in law is well settled that liability to excise duty can arise on the production/manufacture of the excisable goods or at best on removal of such excisable goods. In the present case, the respondent authorities have failed to show any such taxing event having taken place on the basis of which they would be entitled to effect such recovery. Any tax or duty can only be levied and collected in accordance with law, namely, backed by and supported by appropriate provisi....