2002 (7) TMI 680 - AT - Central Excise

Summary

Issues:
Eligibility for refund of duty paid on exempted goods under Entry 6 of Notification 225/86; Compliance with sub-section (2) of Section 11B of the Act; Interpretation of clause (c) of the proviso under sub-section (2) of the Act; Comparison of exemption under Notification 225/86 with rules on Modvat credit; Reference to previous Tribunal decision on a different notification; Commissioner (Appeals) allowing refund claims; Grounds for dismissal of the appeal.

Eligibility for Refund of Duty Paid on Exempted Goods:
The appeal in question revolves around the eligibility of the appellant for a refund of duty paid on polyester staple yarn, which is exempted from duty under Entry 6 of Notification 225/86. The Assistant Collector dismissed the claim citing non-compliance with the requirement in sub-section (2) of Section 11B, which necessitates demonstrating that the duty incidence was not passed on.

Compliance with Section 11B of the Act:
The appellant's counsel argues that the case falls within the scope of clause (c) of the proviso under sub-section (2) of the Act. This clause allows for refund of credit of duty paid on excisable goods used as inputs, irrespective of the provisions of sub-section (2) of the Act. The contention is based on the interpretation that the duty paid on exempted goods should be refunded to the claimant.

Interpretation of Proviso under Section 11B:
The discussion delves into the interpretation of the proviso under sub-section (2) of the Act, emphasizing the refund of credit of duty paid on excisable goods used as inputs. The Tribunal distinguishes between the provisions of Notification 225/86, which is a plain exemption notification, and the detailed rules on Modvat credit, highlighting the absence of provisions for credit in the notification.

Comparison with Previous Tribunal Decision:
The appellant relies on a previous Tribunal decision concerning a different notification, where the Tribunal dealt with the applicability of Section 11B to a refund available under Notification 201/79. This previous case involved specific procedures for credit of duty paid on inputs, unlike the exemption under Notification 225/86, indicating a different treatment of the two notifications.

Commissioner (Appeals) Decision on Refund Claims:
The appellant's contention that the Commissioner (Appeals) allowed similar refund claims not challenged by the department is found to be incorrect. The Tribunal notes that the Commissioner's order did not address the applicability of sub-section (2) of Section 11B, leading to the conclusion that there are no grounds for interference with the dismissal of the appeal.

In conclusion, the appeal is dismissed based on the arguments presented regarding the eligibility for a refund of duty paid on exempted goods under Notification 225/86, the interpretation of the proviso under Section 11B, and the comparison with a previous Tribunal decision on a different notification. The analysis highlights the importance of complying with the specific provisions of the Act and notifications in determining the refund eligibility for duty paid on excisable goods.