Legal principle

Double payment of the same tax liability is not permissible and shall be without authority of law.

Court decision

The Tribunal set aside the order under challenge and allowed the appeal, holding that the demand of Rs.10,44,436 with interest under Section 28B of the Customs Act, 1962 read with Section 11D of the Central Excise Act, 1944 could not be sustained, since the duty was already deposited at the time of clearance of the goods and the appellant had not availed Cenvat credit; the decision was in favour of the appellant Mahendra Industries.

Facts

M/s Mahendra Industries, a manufacturer of sugar boiled confectionery, imported machineries during 2012-13 to 2014-15 and removed them as such on invoices to M/s Mayank Food Products and its own Unit-II at Indore. The department observed that while raising those invoices the appellant collected CVD and additional duty but allegedly did not deposit the amounts with the Government Exchequer. A Show Cause Notice dated 16.08.2017 proposed recovery of Rs.10,44,436 (CVD of Rs.7,54,864 plus additional duty of Rs.2,89,572) with interest and penalties, which was confirmed by Order-in-Original No. 27/2017-18 dated 28.03.2018 and upheld by the Commissioner (Appeals) via Order-in-Appeal No. 229-18-19 dated 17.07.2018.

Key provisions

• Section 28B, Customs Act, 1962 — Duties collected from the buyer to be deposited with the Central Government
• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded