Revenue cannot ask assessee to give information about its own dues pending – Order outrageous, atrocious and showing complete lack of knowledge and law on part of adjudicating authority – Tribunal allows interest claim

MUMBAI, JAN 18, 2008 : EAGERNESS to appropriate the refund claim against pending dues was best observed in the case of Birla Copper vs. CCE, Vadodara . In that case, against an order-in-original of June 2003, the assessee had obtained an Unconditional Stay from the Tribunal in the month of August 2003. Later, in the month of June 2005, the Tribunal extended the Stay by stipulating “pending disposal of the appeal”. Incidentally, the matter came to be referred to the Third Member in view of difference in opinion.

In the meanwhile, a rebate claim of Rs. 20.54 crores of the assessee was pending before the Assistant Commissioner. An oral mention was made before the Bench that the department is proposing to appropriate the refund of a rebate claim against the demands involved in the appeals that were pending decision. This infuriated the Tribunal so much that it had observed – ” such pressure from the department for recovery of duty would amount to interference in judicial decision making procedure of this Tribunal and the D.R. was directed to communicate this observation to the concerned Commissioner. ” After keeping a low profile, some months later, the Assistant Commissioner passed an order appropriating the rebate claim against the confirmed duty amount.

Before the Tribunal, the company filed a Miscellaneous application against this uncalled for eagerness of the Asstt. Commissioner. The Tribunal after narrating the facts observed that the act of the A.C., C.Ex was is in gross violation of the order of stay and in contempt of the order of the Hon’ble High Court of Gujarat in the case of Poly Fill Sacks [2005-TIOL-233- HC-AHM-CESTAT] . Finding that the appropriation order was bad in law, the same was set aside and the A.C. ordered to refund the amount with interest.

The above is only an example of the “sticky” nature of refund claims.

The present case is that pursuant to an order of the Tribunal of July 1998, the appellant filed a refund claim of the amount deposited by them in the month of May 1990 & also claimed interest.

The Revenue felt that the appellant should be thankful that they were at least being refunded the amount pre-deposited by them. Hence in order to deny the interest claim, all sorts of excuses were given like,

• The appellants have delayed in submitting the information of any dues pending against them;

• CEGAT decision cited by the appellant in their favour in the case of Gulf Olefines P.Ltd. vs. CCE  is not binding on the original adjudicating authority as the Tribunal, Chennai Bench’s order was applicable in the jurisdiction of South Zone only.

The Commissioner( Appeals) knew that the aforesaid reasoning of the lower authority may not yield the desired results of “retaining” any interest, hence conjured one more iniquitous trick. To uphold the “patchy” order he drummed up the following reasoning – that there was no specific order from the Tribunal on the basis on which the refund was claimed nor the provisions of sanction of interest were on the statute book in May 1990 when the duty was initially paid.

The Tribunal felt that this was enough & observed –

These findings are totally outrageous as revenue cannot ask the assessee to give information about its own dues pending against them which should be in the knowledge of the revenue only and the assessees refund claim on that account cannot be delayed.

To say that the CEGAT decision of South Bench is applicable only in South Zone is atrocious and shows complete lack of knowledge and law on the part of the adjudicating authority. Even the Commissioner( A) was not spared – he was told that the order passed by him while upholding the original authority’s order goes beyond the ground mentioned by the Assistant Commissioner and which was not permissible.

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