TaxTMI 
TaxTMI 
2026 (9) TMI 952
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....ate Tribunal ['CESTAT'] vide Final Order No. 56215/2024 dated 01.08.2024, whereby the Petitioner's entitlement to refund of Rs. 76,72,000/- under Rule 5 of the CENVAT Credit Rules, 2004 was upheld. 2. Through the present Petition, the Petitioner seeks the following reliefs: a. Allow the present petition and issue a writ of certiorari or any other appropriate writ as this Hon'ble Court may deem fit to quash the Show Cause Notice dated 10.12.2019 issued by the Joint Commissioner, Central Goods and Service Tax, West, Delhi. b. Allow the present petition and issue a writ of certiorari or any other appropriate writ as this Hon'ble Court may deem fit to quash the Order-in-Original dated 24.03.2025 having no. DL/GST/West/Adjn./ADC/138/Welspring/2019 whereby the learned Adjudicating officer has confirmed the demand raised. c. Pass a direction for the payment of interest on pre-deposit amounting to Rs. 7,67,200/- made by the Petitioner in Excise Appeal No. 51000 of 2020 filed before the Hon'ble CESTAT; and d. Pass such other orders as this Hon'ble court may deem fit and proper in the facts and circumstances of the present case. FACTUAL MATRIX 3. ....
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....tion that the Petitioner had actually paid excise duty totalling Rs. 35,05,894/-. 10. This Court further examined the applicability of Section 5A(1A) of the Central Excise Act, 1944 and observed that the exemption relied upon by the Department was not absolute but was subject to conditions and prescribed procedures. Consequently, Section 5A(1A) was held to be inapplicable in the facts of the case. The aforesaid order dated 13.12.2017 was accepted by the Competent Authority (Reviewing) on 15.06.2018 and thus attained finality. 11. The second limb of the controversy relates to the excise duty paid by the Petitioner on goods exported by it. Between April 2007 and December 2007, the Petitioner exported goods out of India through 36 consignments after paying excise duty amounting to Rs. 76,72,000/-. 12. The Petitioner initially filed rebate claims in respect of the exported consignments under Rule 18 of the Central Excise Rules, 2002. Four rebate claims aggregating to Rs.7,88,553/- were sanctioned by the jurisdictional officer. Subsequently, the jurisdictional officer informed the Petitioner that the rebate claims had been wrongly sanctioned on the ground that the Petitioner, b....
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....llenged the aforesaid order before the CESTAT. The appeal was allowed by way of remand vide Final Order No.5066/2017 dated 07.02.2017. The CESTAT noticed that the earlier Order-in-Original dated 26.02.2010 had proceeded without taking into account the legal position arising from the earlier proceedings concerning the admissibility of the CENVAT credit. It was observed that the matter required a holistic consideration, including the correctness of the credit initially taken by the Petitioner on various inputs and the benefit accruing to the Petitioner in terms of Rule 5 of the CENVAT Credit Rules, 2004. 18. Pursuant to the aforesaid remand, the Commissioner, Central Excise, Delhi-II, adjudicated the Show Cause Notice dated 03.02.2009 vide Order-in-Original No. 37/SS/CE/D-II/2-16-17 dated 21.03.2017. By the said order, the proceedings initiated against the Petitioner were dropped. The Commissioner, inter alia, recorded that the admissibility of the credit initially taken by the Petitioner was not in dispute and that the circumstances in which the credit had been taken were required to be considered in their entirety. The Commissioner further observed that, once the Department had ....
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....ed 16.12.2019 was set aside. The CESTAT examined the scheme governing export of goods and the statutory mechanisms by which the duty paid in respect of exported goods could be neutralised, including the provisions relating to rebate under Rule 18 of the Central Excise Rules, 2002, export under bond under Rule 19 thereof and refund of CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004. 25. In the facts of the present case, the CESTAT recorded that the Petitioner had initially exported the goods under a claim for rebate, had paid the duty and had thereafter claimed rebate. Although the rebate had initially been sanctioned, the Petitioner, acting upon the advice of the Department, had repaid the rebate amount along with interest. Thereafter, the Petitioner had continued to pay duty on the exported goods by debiting its CENVAT account and had taken credit of the duty so paid. 26. The CESTAT ultimately held, in paragraph 22 of its Final Order dated 01.08.2024, that the Petitioner was entitled to refund of CENVAT credit of Rs. 76,72,000/- under Rule 5 of the CENVAT Credit Rules, 2004. The CESTAT further held that the substantive benefit available to the Petitioner could no....
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....eby the Order-in-Appeal dated 16.12.2019 had itself been set aside and the Petitioner's entitlement to refund had been upheld. CONTENTIONS OF THE PARTIES 33. Contentions on behalf of the Petitioner 33.1. It was submitted that the Final Order dated 01.08.2024 passed by the CESTAT was directly material to the adjudication of the Demand-cum-Show Cause Notice dated 10.12.2019. It was submitted that the Department's appeal against the Refund Order dated 06.05.2019 had resulted in the Order-in-Appeal dated 16.12.2019, which was thereafter challenged by the Petitioner before the CESTAT. The CESTAT, vide Final Order dated 01.08.2024, allowed the Petitioner's appeal, set aside the Order-in-Appeal dated 16.12.2019 and expressly held that the Petitioner was entitled to refund of Rs. 76,72,000/- under Rule 5 of the CENVAT Credit Rules, 2004. The CESTAT also held that the refund claim was not barred by limitation. 33.2. It was further submitted that once the Order-in-Appeal dated 16.12.2019 had been set aside, the Additional Commissioner could not have relied upon the same order while passing the impugned Order-in-Original dated 24.03.2025. It was submitted that the impugned order e....
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.... the refund order and those initiated pursuant to the impugned Show Cause Notice were distinct statutory proceedings. It was submitted that the Show Cause Notice was independently issued upon the Department forming a prima facie view that the refund had been erroneously sanctioned, inter alia, to safeguard the interest of revenue and prevent the matter from being defeated by limitation. 34.3. It was further submitted that the Refund Order dated 06.05.2019 was an independent and self-contained statutory determination concerning the eligibility, admissibility and quantification of the refund and was consequently open to appellate scrutiny in accordance with law. It was contended that the Petitioner could not claim that the said order was merely consequential to the earlier proceedings and, therefore, incapable of being independently examined or challenged. The mere acceptance by the Reviewing Authority of an earlier order, according to the Respondent, could not operate as an estoppel against the Department from assailing a subsequent refund sanction order if the latter was found to be erroneous or prejudicial to the interests of revenue. 34.4. It was further submitted that the ....
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....s not been shown to have been set aside or stayed in any subsequent proceedings 37. The sequence of events assumes significance. The refund of Rs. 76,72,000/- was sanctioned by the Refund Order dated 06.05.2019. The Department challenged the said order before the Commissioner (Appeals), and during the pendency of that appeal, the Demand-cum-Show Cause Notice dated 10.12.2019 came to be issued. The Commissioner (Appeals) thereafter allowed the Department's appeal vide Order-in-Appeal dated 16.12.2019. The Petitioner challenged the said Order-in-Appeal before the CESTAT, which ultimately allowed the Petitioner's appeal vide Final Order dated 01.08.2024 and set aside the Order-in-Appeal dated 16.12.2019. 38. The effect of the Final Order dated 01.08.2024 cannot be lost sight of. The Order-in-Appeal dated 16.12.2019, which had set aside the Refund Order dated 06.05.2019, was itself subsequently set aside by the CESTAT. Consequently, the Additional Commissioner could not proceed on the premise that the Order-in-Appeal dated 16.12.2019 continued to operate as a valid determination against the Petitioner, without considering the subsequent appellate adjudication by the CESTAT. 39....
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....erefore, cannot be sustained. The finding is directly contrary to the adjudication already undertaken by the CESTAT in its Final Order dated 01.08.2024. The same infirmity permeates the finding of the Additional Commissioner that the Petitioner had previously filed a refund claim which had been rejected and that, since the said rejection had not been challenged, the subsequent claim was not maintainable. 46. The aforesaid finding fails to take into account the subsequent appellate proceedings concerning the refund. The Refund Order dated 06.05.2019 was challenged by the Department before the Commissioner (Appeals), and the Order-in-Appeal dated 16.12.2019 passed in those proceedings was thereafter challenged by the Petitioner before the CESTAT. The CESTAT allowed the appeal on 01.08.2024 and set aside the Order-in-Appeal dated 16.12.2019. 47. Therefore, the Additional Commissioner could not have treated the proceedings as though the Order-in-Appeal dated 16.12.2019 continued to operate independently of the subsequent appellate adjudication. Once the said Order-in-Appeal was set aside by the CESTAT, the Additional Commissioner was required to consider the legal and factual con....
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....ppeal No.51000 of 2020, examined the Petitioner's entitlement to refund and ultimately allowed the appeal. 54. Once the CESTAT had set aside the Order-in-Appeal dated 16.12.2019 and had held that the Petitioner was entitled to refund of Rs. 76,72,000/- under Rule 5 of the CENVAT Credit Rules, 2004, the Additional Commissioner could not treat the said Order-in-Appeal as continuing to operate against the Petitioner while adjudicating the Demand-cum-Show Cause Notice. 55. It is also relevant to notice that the earlier proceedings arising out of the Show Cause Notice dated 03.02.2009 had culminated in the Order-in-Original dated 21.03.2017 dropping the proceedings. The said order was accepted by the Competent Authority (Reviewing). The subsequent refund proceedings thus arose in the backdrop of the findings recorded in the earlier proceedings and, thereafter, the appellate adjudication rendered by the CESTAT vide Final Order dated 01.08.2024. 56. The present proceedings cannot be viewed in isolation by merely referring to the Refund Order dated 06.05.2019 and the Order-in-Appeal dated 16.12.2019. The latter order was not the last word on the controversy. It was carried in appe....