07.03.2022- Amount Deposited During Department Audit Is Liable To Be Refunded If No Show Cause Notice Is Issued By The Department For Such Amount

The Hon’ble CESTAT, Delhi vide its order dated 28.02.2022 in the matter of M/s Bird Audio Electronics Vs Commissioner of CGST in Excise Appeal No. – 51056 of 2021 held that the amount which was deposited at the instance of department audit team for alleged wrongly availed CENVAT Credit is liable to be refunded in absence of any show cause notice for the same.

The Appellant filed the appeal assailing the order- in-appeal no. 02/2021 dated 13.05.2021 where the refund claim of Rs. 4,72,084/- filed by the appellant was rejected by the department.



  • The Appellant is engaged in manufacturing and selling of speakers and deliver the same to its customers on receiving purchase orders from them.
  • An audit of the appellant was conducted by the department and it was observed that the appellant has wrongly availed CENVAT Credit for the tax paid on outward freight and one invoice no. 175 dated 12.09.2015 is missing.
  • The appellant as pointed by the audit team deposited an amount of Rs. 4,72,084/- on 09.07.2018 for the period 2013-14 to 2017-18, however later on filed a refund claim for the same amount on 13.06.2019.
  • The department in respect of the aforesaid refund filed issued a show cause notice dated 27.07.2020 proposing to reject the refund claim alleging that the appellant agreed to the objections of the audit team deposited the said amount of RS. 4,72,084/-.
  • Thereafter the refund claim of the appellant was rejected vide order no. 21 dated 11.11.2020, the appellant preferred an appeal against the aforesaid order which was rejected vide order-in-appeal no. 02/2021 dated 13.05.2021. Hence the present appeal. 
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