2007 (6) TMI 448 - AT - Central Excise

Summary

Issues involved:
The issue involves the entitlement of a manufacturer to file a refund claim u/s 11B of the Customs Act, 1962 for duty paid on goods cleared to a 100% Export Oriented Unit (EOU) under a notification. The primary concern is the locus standi of the manufacturer in claiming the refund.

Details of the Judgment:

Locus Standi of the Appellants:
The appellants cleared goods to a 100% EOU based on CT-3 Certificates but faced a dispute when the recipient EOU was deemed ineligible for exemption, leading to duty recovery and penalties. The appellants sought a refund, which was denied by the Deputy Commissioner and upheld by the Commissioner (Appeals) citing lack of locus standi. The Tribunal, after hearing both sides, found that the appellants, as manufacturers who bore the duty burden, have the right to file a refund claim under Section 11B of the Customs Act. The Tribunal emphasized that the appellants' locus standi cannot be dismissed solely based on not being licensees of the jurisdictional authority, as they had indeed borne the duty burden.

Comparison to Precedent Case:
Drawing parallels to a previous case involving a similar issue, the Tribunal referenced the IDL Chemicals Ltd. case where the manufacturer was allowed to challenge reclassification and claim refund despite not being a licensee in the jurisdiction. The Tribunal highlighted that the burden of duty borne by the manufacturer entitles them to challenge the duty imposition and claim a refund. The amendment to Section 11B allowing a purchaser to claim a refund further supported the manufacturer's right to seek a refund in this case.

Decision and Remand:
The Tribunal set aside the previous order and remanded the matter to the original authority to reexamine the refund claim on its merits within a specified timeframe. It clarified that while the issue of locus standi was resolved in favor of the appellants, other aspects of the case remain open for further consideration.

This judgment underscores the importance of considering the burden of duty borne by a manufacturer in determining their right to claim a refund, irrespective of their licensing status with the jurisdictional authority.