Vedanta LTD vs. The Assistant Commissioner Of Customs

Facts

Vedanta Limited (the petitioner) filed a writ petition seeking a mandamus to direct the Assistant Commissioner of Customs to implement an Order-in-Appeal dated February 18, 2020, and disburse the refund due. The petitioner had an adverse Order-in-Original dated June 26, 2018, passed by the Assistant Commissioner of Customs. This was challenged before the Commissioner of GST and Central Excise (Appeals), who allowed the appeal on February 18, 2020, setting aside the original order and holding the petitioner eligible for a refund of Rs. 32,18,00,042 and Rs. 3,75,64,269. The petitioner sought implementation of this appellate order and disbursement of the refund with interest. The respondents stated that an appeal had been preferred before the CESTAT on May 12, 2020, but no interim order of stay had been obtained.

Held

The Court held that the respondents were obligated to implement the Order-in-Appeal dated February 18, 2020, and disburse the refund to the petitioner along with applicable interest. The Court reasoned that the Circular No. 276/186/2015-CX.8A dated June 1, 2015, clearly states that a refund claim arising from an order of the Commissioner (Appeals) should not be withheld unless a stay order has been obtained. The Court noted that more than seven months had passed since the appellate order was passed, and the department had not obtained any interim order of stay despite filing an appeal. The Court emphasized that the petitioner could not be made to wait indefinitely and that the department ought to have acted expeditiously. The ratio decidendi is that in the absence of a stay order from a higher appellate authority, revenue authorities must comply with the orders of subordinate appellate authorities, especially when significant time has elapsed and no stay has been secured. The Court directed the respondents to implement the Order-in-Appeal and disburse the refund within four weeks.

Key Issues

1. Whether the respondents are obligated to implement the Order-in-Appeal dated February 18, 2020, and disburse the refund to the petitioner, despite having filed an appeal before the CESTAT, in the absence of an interim order of stay? Petitioner's contention: The petitioner argued that as per Circular No. 276/186/2015-CX.8A dated June 1, 2015, issued by the Government of India, refunds arising from an order of the Commissioner (Appeals) should not be withheld unless a stay order has been obtained. They emphasized that more than seven months had elapsed since the appellate order, and the department had not obtained any stay, thus the refund should be disbursed. They relied on the aforementioned circular. Respondents' contention: The respondents submitted that an appeal had been preferred before the CESTAT on May 12, 2020, but they did not have specific information regarding its numbering or any interim order obtained. They did not present any arguments against the implementation of the appellate order in the absence of a stay.