The Principal Bench of New Delhi Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that dispute relating to rebate amount subjudice before the appellate forum and directs the Authority to disburse sanctioned rebate amount.
The appellant M/s RSWM Ltd. the Appellant engaged in the manufacture and export of cotton yarn and manmade yarn, had filed 15 rebate claims under Rule 18 of the Central Excise Rules, totalling Rs. 59,16,907/- with respect to goods exported during May and June, 2008. The duty paid on the goods exported was paid from Cenvat credit account. The goods were exported under a duty drawback scheme on which the Appellants did not take credit of duty paid on the corresponding inputs, in relation to manufacture of goods that were exported.
The Assistant Commissioner rejected the rebate claims for the total amount. However, he allowed the Appellant to restore the amount in their Cenvat credit account, from where the payment of duty was made, observing that the Appellant was not liable to pay duty on the finished goods for export. Being aggrieved, Revenue filed an Appeal before the Commissioner (Appeals) on the ground that allowing re-credit in this manner is tantamount to a refund. The Appellants had not requested for restoration of the amount in their Cenvat credit account. The Commissioner (Appeals) allowed the Revenue Appeals. The aggrieved appellant filed an application before the Revisional Authority in the Ministry of Finance, Government of India. The Revisional Authority upheld the order.
The appellant filed Writ Petition before the Rajasthan High Court, which issued notice to the Revenue. In the meantime, the Revenue issued Show-Cause Notices, on the protective basis, for demand totaling Rs. 59,16,907/-. The Appellant had requested to keep the Show-Cause Notice in abeyance as the matter was sub-judice. The Assistant Commissioner passed ex-parte Order confirming the total demand as proposed Rs.59,16,907/- along with an interest of Rs. 36,11,907/- under Section 11AB of the Act. Being aggrieved, the Appellant preferred Appeals before Commissioner (Appeals), which were rejected.
The Appellant thereafter filed further rebate claims totaling Rs. 85,38,790/- relating to the subsequent period. The adjudicating authority adjusted the amount of Rs. 59,16,907/- which were sub-judice (before Rajasthan High Court) and also interest on the same of Rs. 36,11,907/-, totaling Rs.95,28,814/-. Being aggrieved with the Orders, the Appellant had preferred Appeals before the Commissioner (Appeals) which have been rejected. Hence the appellant is before the Tribunal.
The appellant submitted the dispute regarding the rebate amount of Rs. 59,16,907/- is sub judice before Rajasthan High Court and there being Stay granted by the Honāble High Court, the adjustment made by the Court below is ab initio void. Further submitted by the appellant that the Board Circular No. 13/92-CX-6 which provides-refund amount due to the assessee should be appropriated by a proper officer against confirmed demand only when the time limit for filing an appeal against such confirmed demand has expired.
The Tribunal observed that the dispute relating to rebate for the amount of Rs.59,16,907/- has been subjudice before the appellate forum and passing of the adjudication orders and appellate orders pursuant to protective show cause notices is ab-initio void in the eyes of law. Such adjudication and appellate orders are declared to be nonest under law. The Coram of Mr. Anil Choudhary, Member (Judicial) has held that āI allow these appeals and set aside the impugned orders-in-appeal. The appellant is entitled to consequential benefits. The Adjudicating Authority is directed to disburse the sanctioned rebate amount of Rs.85,38,790/- with interest under Section 11 BB of the Act within a period of 30 days from the date of receipt of the copy of this orderā.
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