2006 (1) TMI 437 - AT - Central Excise

Exemption subsequent to clearance of goods to depot whether available if goods remain unsold - Refund

Summary

Issues:
Refund claim rejection on duty paid for unsold goods at depots.

Analysis:
The appeal challenged the rejection of a refund claim by the appellant for excise duty paid on goods cleared but remaining unsold at different depots. The appellant, a manufacturer of ghee and milk powder, paid duty on products from 2-6-1998, which was later withdrawn from 18-7-1998. The adjudicating authority and the appellate authority rejected the refund claim, stating that the burden of duty passing on to buyers was not disproved by the appellant.

The appellant's representative argued that the burden of duty was not transferred to buyers, citing a circular from a cooperative federation and producing duty paying documents and invoices from the depot. They contended that since duty-paid goods remained unsold at the depot, they were eligible for a refund, considering the depot as the place of removal.

The respondent, however, argued that the duty was discharged at the factory when goods were cleared, and unsold goods at depots did not warrant a refund after duty withdrawal. The place of removal was deemed to be the factory where goods were manufactured, according to the respondent.

The Tribunal noted that the appellant cleared goods from the manufacturing unit to the depots of the cooperative federation, not to their own depots. The invoices produced were insufficient to prove non-passing of duty incidence to buyers. It was emphasized that excise duty burden must be discharged when goods are manufactured, and subsequent duty withdrawal does not entitle a refund for unsold goods at depots. Allowing refunds in such cases would contradict the Central Excise Act provisions.

Consequently, the Tribunal upheld the original order rejecting the refund claim, as the appellant failed to demonstrate that the duty burden was not passed on to buyers. The appeal was dismissed, affirming the correctness of the impugned order.