2006 (12) TMI 389 - AT - Central Excise

Summary

Issues:
1. Challenge to rejection of refund claim for activity of slitting CR/HR coils into smaller strips.
2. Miscellaneous Application for change of cause title due to merger with another company.
3. Appropriation of amounts based on CBEC Circular holding the activity as manufacture.
4. Refund of deposit made during investigation when duty was not liable to be paid.
5. Claim for interest on the deposit.

Analysis:

1. The appellants contested the rejection of their refund claim of Rs. 3,96,679 debited on 9-1-2002 for slitting CR/HR coils into smaller strips on a job work basis. The Commissioner of Central Excise (Appeals) upheld the rejection citing a CBEC Circular stating the activity amounted to manufacture. However, the Apex Court later ruled that such activity did not constitute manufacture. The appellants filed a refund claim within the stipulated time after paying the duty during the investigation.

2. A Miscellaneous Application was filed by the appellant for a change of cause title following the merger of their factory with another company. The application was supported by evidence, and the Tribunal allowed the change to reflect the new entity resulting from the merger.

3. The Tribunal found that the duty paid during the investigation was not required to be paid as the activity of slitting HR coils into smaller sizes was under dispute. The rejection of the refund claim based on the CBEC Circular was deemed incorrect as the Apex Court had clarified that the activity did not amount to manufacture. The Commissioner (A) had already dropped proceedings for duty recovery on the same grounds.

4. Citing precedents, including a judgment by the Larger Bench and the Gujarat High Court, the Tribunal held that the amount paid during the investigation was a deposit and not duty. Therefore, the appellants were entitled to a refund of the deposit as per the law. The Tribunal also acknowledged the appellants' claim for interest on the deposit.

5. The Tribunal set aside the impugned order, directing the refund of the amount under deposit within one month of the order receipt, along with interest. The appeal was allowed, granting the appellants consequential relief as per the findings and legal principles discussed in the judgment.