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Quashes ₹76.72 Lakh Demand Against
The has a ₹76.72 lakh recovery demand against , holding that the could not proceed on the basis of a order that had already been by the . The Division Bench of Justice Anil Kshetarpal and Justice Shail Jain also directed the refund of ₹7.67 lakh in made by the petitioner.
A Refund Saga Spanning Nearly Two Decades
, a partnership firm engaged in manufacturing engineering products and operating as a 100% , exported 36 consignments between April and after paying excise duty of ₹76.72 lakh. Following a complex chain of proceedings—including , show cause notices, and adjudications—the Commissioner dropped proceedings against the firm in . The accepted that order.
Thereafter, the Assistant Commissioner sanctioned the refund in . However, the challenged this refund order before the . During the pendency of that appeal, the also issued a separate in seeking recovery of the same amount. The allowed the 's appeal in , holding that the credit ought to have been transitioned through TRAN-1 and that was not sustainable.
appealed to CESTAT, which in allowed the appeal, the order, and expressly held that the petitioner was entitled to refund under . The Tribunal also ruled that the refund claim was not .
The 's Blind Spot
Despite being informed of the CESTAT ruling in , the Additional Commissioner proceeded to confirm the ₹76.72 lakh demand in . The impugned order relied on the order as an against the petitioner and treated the refund claim as a fresh application .
The High Court found this approach fundamentally flawed.
"Once the
dated
had been
by the CESTAT, the same could not thereafter be treated as an
adverse to the Petitioner,"
the Court observed.
The Court emphasised that the was required to consider the effect of the CESTAT's subsequent order, particularly since the Tribunal had substantively upheld the petitioner's entitlement to refund and decided the issue in its favour.
Key Observations
The Court made several critical observations on the duty of subordinate authorities:
"An
exercising statutory powers is necessarily required to take into account the operative orders of the appellate authorities having appellate jurisdiction over the
. The
cannot disregard a subsequent
which directly bears upon the very issue under adjudication."
On the
issue, the Court noted that
"once the question of
had been specifically considered and decided by the CESTAT in favour of the Petitioner, the Additional Commissioner could not have proceeded to adjudicate the issue by simply treating the refund claim as a fresh claim and arriving at a conclusion contrary to the finding recorded by the CESTAT."
Final Verdict
The High Court both the dated , and the dated , confirming the demand. It directed the Respondent to refund the of ₹7.67 lakh made by the petitioner while filing the appeal before CESTAT, along with applicable interest.
The ruling reinforces the principle that appellate determinations bind subordinate adjudicating authorities and cannot be ignored in . It also clarifies that once a to refund is upheld by a tribunal, the cannot continue to pursue recovery on the same grounds.
