Blackberry INDIA PVT LTD -Earlier Known As Research In Motion INDIA PVT LTD vs. The Commissioner CGST Delhi South Commissionerate & Anr.

Facts

The Petitioner, Blackberry India Pvt Ltd, is challenging a Show Cause Notice dated January 19, 2024. This notice seeks to recover CENVAT Credit amounting to Rs. 8,55,34,345/- and interest of Rs. 4,69,83,731/-, which were previously refunded to the petitioner. The refunds were granted pursuant to orders from the CESTAT Tribunal and this High Court. The petitioner had filed refund applications in 2013 and 2014. After a series of appeals and orders, including a High Court dismissal of the Revenue's appeal, the petitioner was found eligible for the refund and interest. The impugned notice was issued after the Revenue indicated an intention to file a Special Leave Petition (SLP) before the Supreme Court.

Held

The Court held that the impugned Show Cause Notice cannot be sustained and is accordingly quashed. The reasoning was that the CENVAT Credit refund and the interest on delayed payment were paid to the petitioner pursuant to orders from the CESTAT Tribunal and this High Court. The Revenue's challenge to the Tribunal's order was dismissed by this Court, finding no substantial question of law. The petitioner was also granted an order by this Court directing the payment of interest on the delayed refund. The Court noted that the Revenue's stated ground for issuing the notice was the pendency of an SLP, which had not yet been filed. The Court stated that the Revenue cannot unilaterally declare the refund erroneous after being unsuccessful before this Court. It would be open for the Revenue to seek interim orders from the Supreme Court if they pursue their challenge further. Until the Supreme Court orders otherwise, there is no basis for demanding the refund of CENVAT Credit or interest paid to the petitioner.

Key Issues

1. Whether the impugned Show Cause Notice dated January 19, 2024, seeking recovery of CENVAT Credit and interest previously refunded to the petitioner, is sustainable in law, particularly when such refund and interest were granted pursuant to orders from the CESTAT Tribunal and this High Court, and the Revenue's challenge to these orders was dismissed by this Court. (Question of law) Petitioner's Arguments: The petitioner argued that the amounts refunded were paid pursuant to final orders from the Tribunal and this Court. The Revenue's appeal against the Tribunal's order was dismissed by this Court, holding that no substantial question of law arose. The petitioner also obtained an order from this Court directing the payment of interest on the delayed refund. Therefore, the Revenue cannot unilaterally seek recovery of these amounts without a contrary order from a higher forum. Revenue's Arguments: The Revenue's contention, as reflected in the Show Cause Notice, was based on the premise that a Special Leave Petition (SLP) had been filed before the Supreme Court against the High Court's judgment dated July 12, 2023. Consequently, the interest disbursed was deemed liable for recovery. The judgment notes that the Revenue stated they were processing the file for an SLP, but it had not yet been filed.