2006 (1) TMI 371 - AT - Central Excise

Summary

Issues:
1. Rejection of refund claim on the ground of time-bar.
2. Eligibility of 100% EOU for refund of excise duty paid on inputs.
3. Applicability of Section 11B of the Central Excise Act, 1944.
4. Consideration of Explanation B to Section 11B for calculating relevant date for refund claim.

Analysis:
1. The appeal was directed against the rejection of the refund claim of the appellants on the ground of time-bar. The appellants, being a 100% EOU engaged in manufacturing transformers, procured duty paid Enamelled Wire from suppliers and consumed it in the manufacture of transformers for export. The authorities rejected the refund claim due to the delay in filing after the expiry of six months from the relevant date under Section 11AB. The Commissioner (Appeals) upheld this decision. The issue of time-bar was central to this appeal.

2. The appellants contended that as a 100% EOU, they were eligible to receive inputs without duty payment. However, due to the export requirements, they had to pay duty to the suppliers. The appellants argued that their case fell under Explanation B to Section 11B, which was not raised before the adjudicating authority. The authorities maintained that the appellants should have followed the procedures for non-payment of duty on inputs and that their claim was time-barred under Section 11B.

3. The Tribunal considered the provisions of Section 11B, which govern refund claims of excise duty. It was noted that the appellants had clearly stated their EOU status and use of duty paid inputs in exported goods. The Tribunal acknowledged the availability of duty-free inputs for EOUs and the appellants' export activities. The Tribunal found that the refund claim was indeed related to excise duty paid on the Enamelled Wire, falling under the purview of Section 11B.

4. Regarding the calculation of the relevant date for the refund claim, the Tribunal analyzed Explanation B to Section 11B, which pertains to excisable material used in exported goods. While the Tribunal found that the claim could potentially fall within the time limit if certain conditions were met, it noted the lack of evidence and arguments on this aspect before the lower authorities. As a result, the Tribunal decided to remand the matter back to the adjudicating authority for a fresh consideration based on the evidences presented by the appellants regarding the correlation between the duty paid inputs and the exported goods.

In conclusion, the appeal was allowed for remand to re-examine the refund claim in light of the provisions of Section 11B and Explanation B, considering the connection between duty paid inputs and exported goods.