Ravi Paints And Chemicals vs Cc on 21 May, 2004

Customs, Excise and Gold Tribunal – Tamil Nadu
Ravi Paints And Chemicals vs Cc on 21 May, 2004
Equivalent citations: 2005 (98) ECC 286, 2004 (177) ELT 1074 Tri Chennai
Bench: R K Jeet


Jeet Ram Kait, Member (T)

1. This appeal is filed by the appellants against the Order-in-Appeal No. 57/2001 (M-I) dated 16.7.2001 passed by the Commissioner of Central Excise (Appeals), Chennai by which the Commissioner has rejected the appeal of the appellants.

2. Brief facts of the case are that the appellants, are engaged in the manufacture of paints and varnishes. They were sanctioned a refund claim of Rs. 7,88,873 being the amount of four claims filed by them. The department felt that the refund claimed and paid was over and above the amount of Rs. 4,41,561 which was originally claimed and rejected vide Order-in-Original No. 76/97 dated 17.12.97. Therefore, a show cause notice dated 17.8.99 was issued to the appellants for recovery of the amount erroneously sanctioned which culminated in the order of the Original No. 54/99 dated 17.11.199 by which the original authority ordered recovery of Rs. 3,47,312. Aggrieved by the said order, the party filed stay application and appeal before the lower appellate authority, who by Order-in-Appeal No. 67/2000 (M-I) dated 26.5.2000 rejected the appeal for non-compliance of the stay order passed by him wherein he had directed the party to pre-deposit a sum of Rs. 3,47,312 in terms of Section 35F of the CE Act, 1944. Aggrieved by the said order of the Commissioner (Appeals), the appellants filed appeal before CEGAT and CEGAT vide Final Order No. 1105/2000 and Stay Order No. 718/2000 dated 11.8.2000 held that there was no ground to interfere with the order passed by the lower appellate authority and directed the party to pre-deposit the sum of Rs. 3,47,312 and on production of proof of such pre-deposit, the lower appellate authority was directed to adjudicate the matter de novo. Aggrieved by the order of the Tribunal, the party filed Writ Petition before the Hon’ble High Court of Judicature at Madras vide Writ Petition No. 19584/2000 and WMP No. 28442/2000 and the Hon’ble High Court disposed of the Writ Petition by their order dated 22.11.2000 directing the party to pre-deposit a sum of Rs. 1,00,000 within eight weeks from the date of the High Court’s order. The Commissioner was also directed to pass orders within a period of three months from the date of deposit of the amount by the party. The amount of Rs. 1,00,000 was deposited by the party on 30.1.2001. In terms of the direction of the Hon’ble High Court, the Commissioner (Appeals) took up the matter for decision and vide Order-in-Appeal No. 57/2001 (M-I) dated 16.7.2001 after due process of law, he rejected the appeal filed by the party. It is this order of the Commissioner (Appeals) which is impugned before me in the present appeal.

3. Shri C. Saravanan, learned counsel appeared for the appellants and submitted that the appellants were directed by the department to pay an amount equivalent to the credit taken on the inputs lying in stock and also on the inputs contained in finished goods which were lying in stock at the time of opting out of the Modvat scheme at the beginning of the financial year while availing SSI exemption. Accordingly the appellants paid a sum of Rs. 7,88,873 under protest. He has further submitted that the amount of refund of Rs. 7,88,873 granted as refund is the amount paid under protest. He has further submitted that appellants by mistake instead of claiming Rs. 7,88,872.71 (7,88,873) had claimed only Rs. 4,41,561 and the amount of Rs. 3,47,312 involved in the present appeal is the difference between the amount of Rs, 7,88,873 which they have paid under protest and the amount (Rs. 4,41,561 they had wrongly claimed earlier. He therefore, submitted that there was no double benefit accruing to the appellants, as contended by the Revenue. He, therefore, prayed for allowing the appeal.

4. Smt. Bhagyadevi, learned SDR appeared for the Revenue and submitted that in the instant case, the appellants had initially claimed four refund claims amounting to Rs. 4,41,561 for the period 1990-91 to 1993-94 and those claims were rejected by the Assistant Commissioner and consequent to an order in appeal in their favour, they filed a refund claim for Rs. 7,88,873 instead of the amount originally claimed viz. Rs. 4,41,561. The claim was allowed for Rs. 4,41,561 and the balance amount of Rs. 3,47,312 was rejected. She has submitted that when the case came up for hearing before the Tribunal, the Revenue was directed by the Bench to submit proof to show that the party has availed transitional credit of Rs. 3,47,312 which amount has been rejected as refund. The documents were accordingly produced before the Tribunal which clearly showed that during the period 1991 to 1994, the party had availed transitional credit on the inputs lying in stock whenever they opted for availment of Modvat Credit. Hence, the question of refund in such cases does not arise as it would lead to double benefit. Further, their original claim for Rs. 4,41,561 was rejected and on appeal, the order of rejection was set aside. The appellants instead of filing the refund claim for Rs. 4,41,561 enhanced the amount on their own. On this ground also, their appeal cannot be entertained because the enhanced amount was not part of the original order. She has also referred to the comments dated 27.2.2002 received from the Commissionerate, a copy of which is placed in the file, which states that even though the TR 6 challans do bear the endorsement of payment of duty under protest, none of the challans spelt out as to which removals, the payment under protest pertain. Mere deposit of amount towards their PLA under protest cannot be equated with individual removals, argued the learned SDR. In the circumstances, she prayed for rejection of the appeal.

5. I have considered the submissions made by both the sides and gone through the entire case records. I observe that in this case, the appellants had made an initial refund claim of Rs. 4,41,561 which was rejected and on appeal, the Commissioner (Appeals) set aside the Order-in-Original. Consequent on setting aside the Order-in-Original and allowing their appeal by the Commissioner (Appeals), the appellants, instead of reclaiming the amount they had originally claimed, enhanced their refund claim to Rs. 7,88,873 on their own. This amount was sanctioned and paid by the Department. It was only later on that it was found that the amount of Rs. 3,47,312 out of Rs. 7,88,873 was wrongly refunded to the appellants. As rightly pointed out by the learned SDR, enhancement of the refund amount to Rs. 7,88,873 on their own volition was not legal because the said amount did not form part of the order in original by which their original claim was rejected against which the appellants filed appeal before the Commissioner (Appeals) and got an order in their favour. They are eligible for an amount of Rs. 4,41,561 and this factual position is not disputed by the Revenue. The dispute pertains to this sum viz. Rs. 3,47,312 which is the amount involved in the present appeal. On the date when the appellants opted out of the Modvat Scheme, they have paid the duty of Rs. 4,41,561 under protest being the credit involved on the inputs lying in stock as such. Again while opting in, they took the credit under Rule 57H and utilized the same. Therefore, they have already utilized the credit towards the duty liability of the final products cleared by them. Therefore, I am of the considered opinion that the appellants are not entitled to any amount in excess of what was originally claimed by them as that would amount to granting double benefit. The plea of the appellants that they have originally claimed a lesser amount by mistake cannot be countenanced, as they themselves had calculated the amount of refund to the tune of Rs. 4,41,561 in terms of the detailed worksheet furnished by them, as noted by the lower appellate authority in the Order-in-Appeal No. 67/2000 (M-I) dated 26.5.2000, which has been adverted to in the present impugned order in appeal. Further, I have also perused the copies of TR 6 challans under which the appellants have stated to have made payment of duty under protest and as rightly pointed out by the Revenue, TR 6 challans do not indicate as to which particular removals the duty has been paid under protest. In view of my above discussion, I am of the considered opinion that no interference is called for in the order passed by the lower appellate authority. I, therefore, uphold the impugned order and reject the appeal. Operative portion of this order rejecting the appeal was pronounced in the open Court on 21.5.2004.

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