2006 (2) TMI 417 - AT - Central Excise

Summary

Issues:
1. Inclusion of transportation charges in the assessable value under Rule 6(b)(ii) of the Central Excise Valuation Rules, 1975.
2. Claim of refund of amount deposited under protest.

Issue 1: Inclusion of Transportation Charges in Assessable Value:
The appeal addressed the question of whether transportation charges are to be included in the assessable value under Rule 6(b)(ii) of the Central Excise Valuation Rules, 1975. The appellants had installed air-conditioning and refrigerating equipment against Works Contracts at various sites. The Board's order clarified that while components of these plants are dutiable, the systems as a whole are not considered excisable goods. The appellants argued that since goods were transferred from their factory to their establishment at various sites, assessment under Section 4 was not appropriate, and Rule 6(b)(ii) for captive consumption was more suitable. The department did not dispute the application of Rule 6(b)(ii) but contended that transportation charges should be included in the assessable value. However, the Tribunal held that Rule 6(b)(ii) does not mandate the inclusion of transportation charges from the factory, and subsequent transportation charges need not be added to the value, citing the Cadbury India Ltd. case. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellants.

Issue 2: Claim of Refund of Amount Deposited Under Protest:
The second issue pertained to a refund claim of Rs. 8 lakhs deposited under protest by the appellants. This deposit was related to the same issue discussed in the first appeal regarding the inclusion of transportation charges in the assessable value. The appellants claimed the refund within the prescribed time limit and under protest, as confirmed by a statement made by the DGM of the appellant company. The department argued that the payment was not related to provisional assessment and the prescribed procedure for payment under protest was not followed. However, the Tribunal found that the payment was indeed made under protest, as stated in the recorded statement, and the assessments were provisional. Given that transportation costs were excluded from the value in the first appeal, the Tribunal ordered the refund of the deposited amount to the appellants. The refund was subject to the principle of unjust enrichment, and the original authority was directed to grant a reasonable opportunity for the appellants to demonstrate that they had not passed on the duty burden. Ultimately, the appeal was allowed, and the refund was granted under specified conditions.