CCE, ALLAHABAD Vs. JHUNJHUNWALA GASES

JUDGEMENT

(1.) THE dispute in this appeal lies within narrow compass. By the impugned order, Commissioner (Appeals) had, while upholding the order of the Assistant Commissioner confirming a duty demand of Rs. 66,680/ - raised as per 1st show cause notice dated 31.1.1997 and Rs. 50,247/ - raised as per second show cause notice dated 17.3.1997, also directed an amount of Rs. 33,102/ - be refunded to the respondents herein in accordance with the provisions of Section 11B of the Central Excise Act, 1944. The department contends that the Commissioner (Appeals) has traveled beyond the show cause notices in determining the question of refund of Rs. 33,102/ - since that amount was not the subject matter of proceedings initiated under the two show cause notices. The said amount was the balance of Rs. 1,46,356/ - deposited by the respondents herein on 19.12.1996 'under protest'. Out of this amount of Rs. 1,46,356/ -, the amount of Rs. 62,980/ - confirmed as part of the duty demand raised under show cause notice dated 31.1.1997. Another amount of Rs. 50,274/ - raised per show cause notice dated 7.3.1997 was also confirmed by the Assistant Commissioner which was further confirmed by the Commissioner (Appeals) in the impugned order. Since there was a balance of Rs. 33,102/ - in the amount already deposited by the appellants under protest, the Commissioner (Appeals) had, after confirming the two amounts raised in the two show cause notices, directed that the balance amount be refunded to the appellant in accordance with the provisions of Section 11B. Ld. JDR submits that inasmuch as there was no issue relating to the refund of balance amount of Rs. 33,102/ - before the Commissioner (Appeals), he had traveled beyond the show cause noticees and therefore, that part of the order was illegal and beyond the jurisdiction of the Commissioner (Appeals). The Department therefore, seeks to quash the order passed by the Commissioner (Appeals) allowing the refund of said amount to the respondent.

(2.) THE respondents have also filed a cross -objection. Ld. counsel for the respondents submits that the appellants had paid an amount of Rs. 1,46,356/ - under protest and they had all along been contesting the duty liability as well as the method of calculation for arriving at the duty demand. In this connection, she refers to paragraph 3 of the impugned order in which the Commissioner (Appeals) has recorded the respondent's contention that they were pressurised by Range Superintendent to deposit the amount of Rs. 1,46,356/ - and they had made the deposit under protest for clearance of Hydrogen gas supplied to M/s. Jhunjhunwala Vanaspati Ltd. to whom the gas unit was subsequently transferred. During the period from 1.12.1996 to 21.12.1996, the amount deposited was also disputed on the ground that the respondents herein have deposited more than the amount actually calculated on the quantity of clearances during the period 8.10.1996 to 21.12.1996. They had therefore, contended that the amount which is in surplus after taking into account the duty demands arising from two show cause notices was liable to be refunded. Ld. Counsel therefore, submits that the Commissioner (Appeals) had given a correct order inasmuch as he had after determining the demands raised in the two show cause notices had only held that the balance amount should be refunded to the appellants in accordance with the law i.e. the provisions of Section 11B of the Act.

(3.) NEVERTHELESS , taking note of the fact that the respondents had paid the amount under protest, it would follow that the respondents had disputed their duty liability and only to the extent it had been adjudicated by the authorities below, it can be said that their duty liability has been actually settled as per the impugned order which is restricted to Rs. 1,13,294/ -. Since the balance amount of Rs. 33,102/ - is neither the subject matter of the duty demand nor any adjudication proceedings, the department cannot assume that the respondents have accepted the duty liability in relation to the said amount just because they had deposited the said amount in advance. It has also to be borne in mind that even at the time of deposit of the said amount, respondents herein had registered their protest. At this stage, Ld. Counsel for the respondents submits that the respondents have already filed a refund claim for the said amount of Rs. 33,102/ -. It is made clear that the present order of quashing Commissioner (Appeals)'s order directing refund will not in any way affect the rights of either party to substantiate their case before the appropriate authority on merits in relation to the said refund claim. The Revenue's appeal and the cross -objection filed by the respondents herein are disposed of in above terms.