2004 (2) TMI 460 - AT - Central Excise

Summary

Issues:
Refund of duty under the compounded levy scheme.

Analysis:
In this case, the issue pertains to a refund of duty to the respondents working under the compounded levy scheme. The Commissioner (Appeals) had allowed the refund, stating that the duty charged from the respondents by adding the galleries was excess, following the legal precedents set in Mahalaxmi Textile Prints (P) Ltd. v. CCE, Hyderabad and Vijay Anand Fabrics (P) Ltd. v. CCE, Hyderabad. However, the learned JDR argued that the order determining the ACP of the furnace by adding galleries was never challenged by the respondents and had become final, making the duty paid in compliance with that order non-refundable. The JDR further contended that the legal precedents relied upon by the Commissioner (Appeals) were not applicable to the respondents' case.

Upon reviewing the record, the judge found merit in the JDR's argument. It was observed that the order determining the ACP of the furnace by adding galleries was never contested by the respondents, and they had paid the duty in accordance with that order. Even if the order was legally incorrect, the respondents should have sought to have it set aside instead of accepting it and paying the duty. The judge emphasized that the respondents cannot benefit from judgments in favor of other assessees when they themselves did not challenge the order that prevented them from claiming the same benefit. The principle that an assessee must challenge an unfavorable order to seek a benefit was highlighted. The judge concluded that the respondents had not paid excess duty but had complied with a valid order, thus rendering their claim for a refund legally untenable. Consequently, the impugned order of the Commissioner (Appeals) was set aside, and the appeal of the Revenue was allowed.