Refund of pre-deposit is permissible though a simple letter and no need to file refund claim u/s 11B of the CEA

We are sharing with you an important judgement of the Hon’ble CESTAT, Mumbai in the case of Lorenzo Bestonso Vs. Commissioner of Customs (Import), Nhava Sheva, [(2015) 59 taxmann.com 158 (Mumbai - CESTAT)] on the following issue:

 

Issue:
 

Whether the Assessee is required to file refund claim under Section 11B of the Central Excise Act, 1944for refund of the amount deposited during investigation despite of the fact of appeal allowed in Assessee’s favour with consequential relief?

 

Facts & Background:

In the instant case, Shri Lorenzo Bestonso (“the Assessee”) deposited an amount of Rs. 64,03,603/- on January 2, 2010 during the course of investigation proceedings. Later on the matter was decided in favour of the Assessee by the Hon’ble CESTAT, Mumbai vide its Order dated March 5, 2013 wherein the Assessee's appeal was allowed with consequential relief by setting aside the Order-in-Original passed by the Commissioner of Customs (Import), Nhava Sheva.
 

Thereafter, the Assessee wrote a letter to the Department for refund of the amount so deposited by them during the course of investigation proceedings. However, the Department refused to refund the same on the ground that the Assessee has not filed the refund claim.
 

Being aggrieved, the Assessee filed a Miscellaneous Application before the Hon’ble Tribunal for implementation of the Order passed on March 5, 2013 and for issuing suitable directions to the Customs Authorities for refund of the amount along with interest immediately.

Held:

The Hon’ble CESTAT, Mumbai after affirming that fact that the Assessee has written letter to the Department for granting refund of the amount, held that where Assessee's appeal has been allowed with consequential relief, it is incumbent upon the Revenue to refund the amount deposited during investigation. It was further held by the Hon’ble Tribunal that as per CBEC Circular in this regard, if refund is due to assessee of a pre-deposit made, there is no need to file any refund claim and only a simple letter would suffice.

Accordingly, the Hon’ble Tribunal directed the Revenue to refund the said amount along with interest to the Assessee within fifteen days from the date of this Order.

Hope the information will assist you in your Professional endeavours. In case of any query/ information, please do not hesitate to write back to us.

Thanks & Best Regards,
Bimal Jain 
FCA, FCS, LLB, B.Com (Hons)

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Readers are advised to consult the professional for understanding applicability of this judgement in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission.