2006 (9) TMI 71 - AT - Central Excise

Valuation (Central Excise) Appellants filed claim for refund on paid duty on additional charges collected and it also granted by original authority but revenue can t agree with decision Respective Authority allow the appeal with consequential relief.

Summary

Issues:
1. Whether excise duty is payable on excess freight collected by the appellants.
2. Validity of the Commissioner (A)'s decision to disallow the refund claim.
3. Applicability of various judicial decisions on the case.
4. Compliance with procedural requirements for recovery of refund.

Analysis:
1. The case involved a dispute regarding the payment of excise duty on excess freight collected by the appellants. The appellants arranged transport for goods cleared from the factory, and the purchasers paid a fixed amount per metric tonne for the transport. The appellants paid duty on the additional charges collected and later filed a refund claim, which was initially granted but then challenged by the Revenue. The Tribunal found that the excess amount collected was not liable for excise duty as it was a profit made in transportation, not part of the assessable value. The Tribunal also noted the absence of Show Cause Notices for recovery of the refund, highlighting a procedural flaw.

2. The Commissioner (A) disallowed the refund claim, relying on a previous Apex Court decision. However, the Tribunal distinguished the facts of the present case from the case cited by the Commissioner (A). The Tribunal emphasized that the excess freight collected was not akin to the situation in the precedent, where no transportation cost was actually incurred. The Tribunal held that the Commissioner (A)'s reliance on the previous decision was incorrect, and the orders disallowing the refund claim were set aside.

3. The appellants' advocates cited various judicial decisions to support their arguments. They referred to cases such as Escorts JCB Ltd. v. CCE, Majestic Auto Ltd. v. CCE, and Dalmia Biscuits Pvt. Ltd. v. CCE, among others, to establish that excise duty should not be levied on excess freight collected. The Tribunal agreed with the appellants, finding that the principles laid down in these cases were applicable to the present situation, where the excess amount collected was not part of the assessable value.

4. The Tribunal noted that no Show Cause Notices had been issued for the recovery of the refund previously sanctioned. This procedural lapse was highlighted as an infirmity in the proceedings, emphasizing the importance of following established procedural requirements. The absence of proper notice for the recovery of the refund further supported the Tribunal's decision to set aside the orders disallowing the refund claim.

In conclusion, the Tribunal allowed the appeals, providing consequential relief to the appellants based on the analysis of the issues involved and the applicable legal principles.