Order Date – 18 January 2024

Parties: Bhavani Industries India LLP Vs Commissioner of Central Excise and Service Tax – RAJKOT

Facts –

• The Appellant, Bhavani Industries India LLP, during audit objection did not agree with the officers of the department as regards reversal of cenvat credit relating to premium paid on product liability and recall insurance towards its manufacturing activity, however, upon insistence of the officers of audit, paid an amount under protest, in respect of which appeal of the appellant was allowed by this Tribunal and has attained finality.
• Pursuant thereto, appellant filed refund claim; however, a show cause notice was issued mainly that claim has to pass test of unjust enrichment under section 11B (2) of the Act. The Assistant Commissioner held that the test of unjust enrichment would apply and that chartered account in his second certificate has stated that claim amount has been expensed out in profit and loss account and on that basis denied the refund claim.

Issue –

• Whether the denial of refund already sanctioned is proper?

Order –

• The Tribunal observed that As there is no dispute to the fact that amounts relating to cenvat credit availed were collected from the appellant before issuance of show cause notice and adjudication order, and it is available on record that  appellant during audit objection resisted the demand of reversal of Cenvat credit and have debited the same under protest; such recovery of amount before creation of liability was without authority of law and cannot be treated as tax but revenue deposit only.
• It is settled law that section 11B has no application to revenue deposit made during investigation. Reliance in this behalf is placed on the decision of M/s. Parle Agro Pvt Ltd in which it is held that section 11B has no application to revenue deposit, and such deposits are required to be refunded with interest @ 12% from the date of deposit.
• Accordingly the impugned order is set aside and appeal is allowed.