Cce, Allahabad vs M/S. Jallan Concast Ltd., Gorakhpur

[Arising out of Order-in-Appeal No.41/CE/ALLD/2-13 dated 01.10.2013 passed by the Commissioner, Central Excise, Allahabad].

For approval and signature:

HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

1. Whether Press reporters may be allowed to see the

order for publication as per Rule 27 of the CESTAT

(Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the

CESTAT (Procedure) Rules, 1982 for publication in

any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy

of the Order?

4. Whether Order is to be circulated to the Departmental

authorities?

__________________________________________________

CCE, Allahabad Appellant

Vs.

M/s. Jallan Concast Ltd., Gorakhpur  Respondent

Present for the Appellant : Shri G.R.Singh, DR

Present for the Respondent: Shri Mayank Garg, Advocate

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 21.05.2015

FINAL ORDER NO. 53067/2015

PER: S.K. MOHANTY

Revenue is in appeal against the impugned order dated 01.10.2013 passed by the Commissioner (Appeals), Customs and Central Excise, Allahabad, wherein refund claim for Rs.50,00,000/- was allowed in favour of respondent by setting aside the adjudication order dated 22.08.2012.

2. The brief facts of the case are that the respondent herein is a manufacturer of MS ingots and MS Bars. On 18.04.2012 the factory of the respondent was searched by DGCI Officers. During the course of search, the respondent was forced to deposit Rs.50,00,000/-, which was subsequently claimed as refund on the ground that the amount deposited during the course of investigation cannot be considered as duty of excise, since the said amount is not attributable to removal of excisable goods from the factory. Refund application filed by the respondent was rejected by the original authority. In appeal against the said order, the Commissioner (Appeals) has allowed the appeal in favour of the respondent. Hence, this present appeal before this Tribunal.

3. Shri G.R. Singh, the ld. DR appearing for Revenue submits that the refund application is premature as the disputed amount in question has been deposited willingly and voluntarily during the course of investigation against the expected liability; thus without waiting for conclusion of adjudication proceedings, claiming of refund is not maintainable. He further submits that as per the statutory provisions, the deposits made by the assessee during course of investigation bears the character of pre-deposit and the question of refund would arise only when the assessee succeeds the litigation. According to the ld. DR since the dispute arising out of the investigation has not attained finality, claiming of refund amount and sanction of the same by the appellate Commissioner is contrary to the statutory provisions.

4. Per contra, the ld. Advocate appearing for the respondent reiterates the findings recorded in the impugned order and also relies on the judgment of Honble Gujarat High Court delivered in the case of Sonali Dyeing and Printing Pvt. Ltd. vs. Union of India, reported in 2006(205) ELT 120 (Guj.).

5. I have heard the ld. Counsel for both the sides and perused the records.

6. Incidence of levy of Central Excise duty is manufacture or production of excisable goods. If any amount is collected or retained by the Central Excise authorities, which statutorily is not required to be levied, then on filing of formal application by the assessee, such amount has to be refunded. I find from the available records that duty liability on account of investigation has not been determined against respondent by adjudication process. Therefore, in absence of determination of any outstanding liability, the amount paid by the respondent cannot be retained by the Revenue, in absence of any specific authority provided under the statute. In an identical set of facts, the Honble Gujarat High Court in the case of Sonali Dyeing and Printing (supra) have allowed the refund claim, holding as under:-

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 provision empowering the authority to undertake such an exercise of levy and collection. The respondent authorities must bear in mind that they are creatures of statute and are bound by statutory law; the powers that they exercise are granted to them by the statute and there are no powers de hors the statute. Therefore, the authorities are bound to act as provided by the provisions under which they can exercise such powers. The revenue is not an organization which is entitled to retain money without sanction of law. Therefore, without entering into the controversy as to whether payment was voluntary or otherwise, in absence of any statutory backing, the funds recovered by the respondent authorities by way of various cheques collected by them, cannot be permitted to be retained and are required to be refunded forthwith. The learned Counsel for Revenue has failed to point out a provision which empowers the authorities to collect and retain cheques in this manner.

7. In view of the above, I do not find any infirmity in the impugned order. Thus, the appeal filed by the Revenue is dismissed.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

Anita

??

??

??

??

0 5 E/51011/2014 EX. [SM]