2008 (1) TMI 744 - AT - Central Excise

Summary

Issues:
1. Classification of goods under specific chapter headings for excise duty.
2. Claim for exemption under Notification 208/83-C.E.
3. Dispute regarding payment of excise duty on goods supplied to Indian Railways.
4. Refund claim and transfer to Consumer Welfare Fund.
5. Recovery of excise duty from customers.

Analysis:

Classification of Goods:
The case involved a dispute over the classification of brake blocks, brake shoes, and anti-creep bearing plates supplied by the appellant to Indian Railways. The appellant claimed full exemption under Notification 208/83-C.E. for these products, classifying them under Chapter Heading 7307.00 and 7307.10. However, a show cause notice contended that the goods should be classified under Chapter Heading 8602.00, leading to a demand for excise duty. The Collector, Nagpur confirmed the duty demand and imposed a penalty, which was later appealed before the Tribunal.

Claim for Exemption:
The appellant had a contract with Indian Railways specifying that excise duty, if applicable during the contract period, would be charged. Despite the appellant's request for payment of excise duty, Indian Railways refused, citing that the duty was payable from a certain date. The Tribunal allowed the appellant's appeal against the duty demand, leading to a refund claim filed by the appellant in compliance with the Tribunal's order.

Dispute over Payment of Excise Duty:
A subsequent show cause notice questioned the refund claim, suggesting transferring the amount to the Consumer Welfare Fund due to the lack of evidence that the excise duty paid had not been recovered from customers. The appellant argued that the duty was paid under protest after goods clearance, and attempts to recover it from Indian Railways were unsuccessful. The delay in obtaining information from Indian Railways further complicated the matter.

Refund Claim and Transfer to Consumer Welfare Fund:
The Assistant Commissioner transferred the refund amount to the Consumer Welfare Fund, stating the lack of confirmation from Indian Railways regarding the payment of excise duty. This decision was upheld in the order on appeal, prompting the appellant to appeal before the Tribunal.

Recovery of Excise Duty from Customers:
The Tribunal noted that the duty was deposited under protest after goods clearance, and the appellant's attempts to recover it from Indian Railways were rejected. The Tribunal emphasized that the burden to prove that the duty had not been passed on to customers was on the revenue department. As there was no evidence to suggest the duty had been recovered, the Tribunal set aside the order and allowed the appeal, granting consequential relief to the appellant.