By TIOL News Service

MUMBAI, APRIL 11, 2017: A pre-deposit of Rs.1 Crore was made during the pendency of the appeal.

The Tribunal vide Final order dated 05.03.2004 set aside the order impugned and remanded the matter to the adjudicating authority for re-quantification of the duty after considering entitlement of MODVAT credit and cum-duty benefits.

Pursuant thereto, the appellant sought refund of the pre-deposit made.

The same was sanctioned by the Deputy Commissioner vide order dated 01.09.2005.

The appellant is before the CESTAT and submits that there has been a delay of almost 545 days for grant of refund and, therefore,they are entitled for the interest on the said delay.

Reliance is placed on a catena of case laws, notably, King Win Johnson (India) - 2005-TIOL-600-CESTAT-DEL, Sheela Foam Pvt. Ltd - 2003-TIOL-241-CESTAT-DEL-LB .

The AR while reiterating the finding of the lower authorities emphasizes that the appellant's appeal was not finally allowed by the Tribunal but the matter was sent to the Adjudicating authority for re-quantification of the demand and, therefore,it cannot be said that the matter had attained finality. Inasmuch as since there is no delay in sanctioning the refund, appellant is not entitled for interest.

The Bench observed -

“5. I find that from the date of the Tribunal's order, the refund was sanctioned after more than one year. The submission of the Ld. Counsel is that once the appeal is disposed of by the Tribunal, if any pre-deposit made in relation to such appeal, it should be refunded within a period of three months from the date of the Tribunal order. I agree with the Ld. Counsel only to the extent when the appeal is finally allowed by the Tribunal, in such case amount is refundable within a period of three months. In the fact of the present case demand was not finally decided by this tribunal. The matter was remanded to the adjudicating authority for the re-quantification of the demand, therefore, refund will arise in the only after finalization of the re-quantification of demand by the Commissioner. Therefore all the judgments relied upon by the Ld. Counsel are not relevant as in those cases, the appeal of the assessee is allowed finally and no demand existing consequent to the Tribunal order, which is not the fact in the present case. The demand was very much existing at the time of passing Tribunal order for the reason that re-quantification was directed to the original adjudicating authority. Therefore in the present case it cannot be said that there is delay on the part of the department in sanctioning of the refund claim….”

Concluding that there is no infirmity in the order of the Commissioner (Appeals), the same was upheld and the appeal was dismissed.

(See 2017-TIOL-1199-CESTAT-MUM)