In Excise Appeal No. 40204 of 2014 -CESTAT- Same Authority cannot set aside already approved partial refund claim, rules CESTAT (Chennai)
Members Sulekha Beevi C.S. (Judicial) & Vasa Seshagiri Rao (Technical) [02-08-2023]

Read Order: M/s. W.S. Industries (India) Ltd. v. The Commissioner of Central Excise

Chahat Varma

New Delhi, August 11, 2023: The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal has ruled in favour of M/s. W.S. Industries (India) Ltd. (appellant), by stating that when an authority has already issued an order upholding part of a refund claim, it cannot subsequently issue another order to set aside the entire refund claim. Such an order is considered ab initio void and non-est.

The appellant in this case, had filed a refund claim amounting to Rs. 8,42,001. Subsequently, a Show Cause Notice was issued, proposing to reject the refund claim. After due proceedings, the original authority approved a refund of Rs. 4,21,790 while rejecting the balance amount. The appellant appealed to the Commissioner (Appeals) against this decision. On 08.10.2013, the Commissioner (Appeals) affirmed the original authority's decision, upholding the sanction of Rs. 4,21,790 refund. The appellant did not challenge this ruling. Concurrently, the department filed an appeal against the original authority's sanction of Rs. 4,21,790 refund. The Commissioner (Appeals) on 29.10.2013 reversed the original authority's decision and denied the entire refund claim.

The coram of Sulekha Beevi C.S. (Judicial) and Vasa Seshagiri Rao (Technical) observed that the Show Cause Notice had initially suggested limiting the refund claim to an amount of Rs. 4,27,062, rather than outright rejecting the entire claim. Therefore, the bench found that the order which rejected the entire refund claim was not justified based on the content of the Show Cause Notice itself.

In conclusion, the bench held that the challenged order must be set aside. Moreover, it was emphasized that since the order rendered by the Commissioner (Appeals) on 08.10.2013, had reached finality, the previous decision of the original authority, which approved a portion of the refund claim, was to be restored.