Non-compliance with a valid Tribunal order constitutes arbitrary action and unjust enrichment, necessitating prompt refund of reversed amounts.

JUDGMENT :

(Deepak Roshan, J.)

1. The instant writ application has been preferred by the petitioner for the following reliefs:

“a) To issue a writ/order/direction directing the Respondent to give effect to the Order of the Hon'ble Tribunal dated 08.04.2022 and/or to implement the said Order of the Hon'ble Tribunal by refunding the amount of Rs.2,57,38,894.67 alongwith interest;

b) To issue a Writ in the nature of certiorari directing the Respondents, their servants, agents and/or assigns to transmit all the records pertaining to the case so that conscionable justice may be done to the petitioner by directing the respondents not to illegally withhold the amount of Rs.2,57,38,894.67 refundable to the petitioner consequent upon the Order dated 08.04.2022 passed by the Hon'ble Tribunal;

c) An Interim Order directing the Respondent Authorities not to withhold the refundable amount arbitrarily and to refund the said amount of Rs.2,57,38,894.67 by implementing the said Order of the Hon'ble Tribunal.”

2. The brief fact of the case as per the pleadings is that the petitioner is a Private Limited Company and is engaged in manufacturing excisable goods falling under Chapter 84 on job work basis of M/s Tata Motors Ltd., Jamshedpur. An investigation was conducted by the respondent-Department and the investigating team have also recorded statement from different persons as the department was of the view that the petitioner was not at all engaged in the manufacturing activity; rather only carrying out job work and in that view of the matter, the petitioner was not eligible for taking the credit.

After the investigation, an amount totaling to Rs.2,57,38,894.67/- was reversed by the petitioner-Company on 11.09.2008 under protest at the instance of the department. Thereafter, proceeding was initiated by issuing show cause notice dated 28.11.2008 to which the petitioner submitted a reply to the show cause notice. Finally, an Order-in-Original dated 26.02.2010 issued on 16.03.2010, was passed by the Commissioner of Central Excise and Service Tax, Jamshedpur, whereby the said respondent confirmed the demand of Rs.2,57,38,894.67/- and appropriated the said amount since the same amount was already reversed by the petitioner under protest. The Commissioner vide its Order-in-Original, also imposed penalty for the same amount under Rule 15(2) of the CENVAT Credit Rules, 2004.

3. Being aggrieved, the petitioner filed an appeal before the Customs Excise and Service Tax Appellate Tribunal (In short CESTAT) which was numbered as Appeal No. E/365/2010. The said appeal was filed challenging the legality and maintainability of the Order-in-Original. The learned Tribunal, vide its order dated 08.04.2022, set aside the order of the Commissioner and allowed the appeal with consequential relief and as such, the petitioner became entitled to the amount of Rs.2,57,38,894.67/- reversed under protest.

4. Pursuant thereto, vide application dated 18.04.2022 (Annexure-3), the petitioner-Company requested the respondent-Department for refunding the amount of Rs.2,57,38,894.67/- along with interest and the petitioner also filed a refund application at the instance of the department. However, to the utter surprise of the petitioner-Company, vide Annexure-5, a show cause notice dated 11.08.2022 was issued by the respondent proposing as to why the said refund application should not be rejected.

At this stage, it is pertinent to mention here that the refund application was filed by the petitioner after the Order-in-Original was set aside by the learned tribunal.

5. The petitioner duly responded to the said show cause notice contending therein that the proposal for rejection of refund is highly arbitrary, inasmuch as, the credit was reversed with protest at the instance of the Department and consequent upon setting aside of the order of the Commissioner i.e., the Order-in-Original, by the learned tribunal; the petitioner-Company only wanted restoration of the said position. In response t