Bharat Sanchar Nigam Ltd. Vs. Commissioner of Central Excise,
Jaipur [(2014) 51 taxmann.com 10 (New Delhi – CESTAT)]
Bharat Sanchar Nigam Ltd. (the Appellant) filed refund claim of Rs. 11,79,720/- for the excess amount
paid. The Appellant was issued a Show Cause Notice dated January 17, 2007 (SCN) to show cause as to why their refund claim
of Rs. 11,79,720/- should not be rejected.
The Appellant submitted their reply dated May 25, 2007 and wassanctioned entire refund claim by the Assistant Commissioner vide Order-in-Original No. 44/R/2007.
The Appellant submitted their reply dated May 25, 2007 and wassanctioned entire refund claim by the Assistant Commissioner vide Order-in-Original No. 44/R/2007.
However, the Assistant Commissioner later issued a corrigendum
dated July 17, 2007 to the SCN stating that as the Appellant had taken Cenvat
credit to the tune of Rs. 11,18,182/- on the strength of the invoices for Capital goods issued by their Head Office, the same was not
admissible as their Head Office was not registered as a registered dealer
andtherefore asking why their refund claim should not be rejected to the extent
of Rs. 11,18,182/-.
Later, the Commissioner (Appeals) also upheld the adjustment of
Rs. 11,18,182/- out of the total refund of Rs. 11,79,720/-and the Appellant was
refunded only the net (remaining) amount of Rs. 61,538/- in form of Cenvat credit. Being aggrieved, the
Appellantpreferred an appeal before the Hon’ble CESTAT, Delhi.
The Hon’ble CESTAT,
Delhi observed that there has been no Show Cause Notice given to the
Appellantfor showing cause as to why Cenvat credit amount of Rs.11,18,182/-
(adjusted from the amount of refund sanctioned) was inadmissible to them and
even if the corrigendum issued on July 17, 2007 is an attempt to be treated as
a Show Cause Notice, the said corrigendum falls fatally short of the
requirement of a notice under Section 73 of the Finance Act, 1994.
Accordingly, it was held by the Hon’ble Tribunal thatwhile confirmed demand can be adjusted
from the amount of refund, there is no provision to adjust unconfirmed demand
from the amount of refund and in the instant case, Rs. 11,18,182/- cannot be
held to be a confirmed demand.
Hence, the Department
was directed to refund back Rs. 11,18,182/- to the Appellant alongwith
applicable interest.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons),
Mobile: +91 9810604563, Email: bimaljain@hotmail.com)
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