Order Date – 18 August 2023

Parties: Gujarat Borosil Limited Vs C.C.E. & S.T.-Surat-ii

Facts – 

• The Appellant, Gujarat Borosil Limited, has made a pre-deposit for admission of the appeal before the tribunal. It contented that once the appeal is disposed of the said pre-deposit made stand refundable to the assessee within 3 months from the date of the Tribunal’s orders irrespective of whether the Tribunal’s order is final on merit or remand to the Adjudicating Authority.
• The Department contented that the refund is arising only after passing of de novo adjudication is irrelevant and illegal without any support of law.

Issue – 

• Whether the refund of pre-deposit is payable within 3 months from the date of Tribunal’s remand order or from the date of the de novo adjudication order?

Order – 

• The Tribunal observed that once the appeal was disposed of by way either setting aside the demand or by way of remand to the adjudicating authority, the demand of duty does not exist for the time being, therefore the amount of pre-deposit became refundable to the assessee.
• This issue has been clarified by the CBEC in circular No. 802/35/2004-CX dated 8 December, 2004, it was categorically clarified that in case of refund of Pre-deposit the dead line for refunding, this pre-deposit is 3 months from the date of Tribunal’s order, accordingly if the refund is not granted within 3 months from the date of Tribunal’s order thereafter the department is bound to pay the interest to the claimant.
• In various judgments it has been settled that as regard refund of pre-deposit, there is no requirement for filing a refund claim. The department must give the refund suo moto on the basis of Tribunal’s order therefore merely because the appellant have not filed the proper refund claim within 3 months of the Tribunal order, department cannot be absolved from the liability of interest on the refund of pre-deposit.
• Hence it was held that there is absolutely no doubt that appellant are entitled for the interest from the 3 months of the order of the tribunal till the refund was granted. Accordingly the impugned order is set aside appeal is allowed.