The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) remanded the matter to the Commissioner to scrutinize the validity of the appropriation of the amount from the total refund of excise duty after providing an opportunity to assessee.
J K Tyre & Industries Ltd, the appellant is engaged in the manufacture of pneumatic tyres falling under Chapter Heading 4011 of CETA, 1985. They have filed a refund claim of Rs.2,55,32,134/- consequent to the finalization of their provisional assessment for the period 01.10.2007 to 31.03.2009.
The adjudicating authority considered the refund claim and held that the same was within the time limit prescribed under Section 11B of the Central Excise Act, 1944 and also did not hit the bar of unjust enrichment.
The adjudicating authority has held that the appellant is eligible for a cash refund of Rs.74,04,319/- and credit in their Cenvat account of Rs.1,81,27,815/-. However, the adjudicating authority has deducted an amount of Rs.67,15,595/- under Section 11 of the CEA, 1944 based onthe Range report observing that the said amount was due from the appellant.
The appellant submitted that the deduction/appropriation of the amount of Rs.67,15,595/- was made unilaterally without issuing any notice to them before the adjudication order was passed. It was that the amounts mentioned in the adjudication order are totally erroneous and most of the amount has already been paid by them.
No opportunity was given to the appellant to explain whether the amount had already been paid or otherwise. Even though, the provision laid down under Section 11 of the CEA, 1944 empowers the lower authorities to recover sums due from the appellant, however, whether the said amount is due or otherwise, is to be ascertained before deducting the same.
A two-member bench comprising of Dr D M Misra, Member (Judicial) And Mrs R Bhagya Devi, Member (Technical) remanded the matter to the adjudicating authority to examine in detail taking note of the submissions of the appellant that the deducted amount of Rs.67,15,595/- is not due to the government, hence, not deductable from the refund amount.
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