2007 (5) TMI 443 - AT - Central Excise

Summary

Issues:
Claim for refund under Central Excise Act, 1944; Time-barred refund claim; Alleged clandestine removals; Duty burden passed on to customers; Debit entry in PLA under protest.

Analysis:
The appeal was filed against an Order dated 21-10-2003 passed by the Commissioner of Central Excise (Appeals) concerning a refund claim of Rs. 76,570 under the Central Excise Act, 1944. The appellant, engaged in manufacturing branded chewing tobacco, had a search conducted in their premises where octroi receipts were found without related invoices establishing payment of Central Excise duty. The appellant claimed the octroi receipts were for goods cleared in the past, but officers alleged clandestine clearance without duty payment. An amount of Rs. 76,570 was debited under protest in the PLA on 30-11-94. The appellant subsequently filed a refund claim under Section 11B of the Act, supported by a chart and explanations regarding duty payment and sales invoices.

The Assistant Commissioner directed the appellant to file a proper refund claim, which was done on 5-10-95. The appellant explained that duty burden was not passed on to customers and responded to a show cause notice alleging removal of goods without duty payment. The Assistant Commissioner held the refund claim time-barred in an Order-in-Original dated 4-3-99, confirming the demand and rejecting the refund claim. The Commissioner (Appeals) upheld this decision on grounds of time-bar, leading to the appeal.

Upon considering submissions, the Tribunal found merit in the contention that the refund claim was distinct from other proceedings on alleged clandestine removals. The debits in the PLA under protest were acknowledged, and since no evidence of recovery from customers existed, the bar of limitation did not apply. The Tribunal held that the denial of refund based solely on limitation was erroneous. Citing relevant case laws, the Tribunal set aside the Commissioner (Appeals) order and directed settlement of the refund with interest, allowing the appeal with consequential relief. The judgment was pronounced on 18-5-2007.