2010 (12) TMI 1129 - AT - Central Excise

Summary

Issues:
1. Stay of operation of the impugned order passed by the Commissioner (Appeals).
2. Appeal against the appellate Commissioner's order granting a refund to the respondent.
3. Dispute regarding the duty liability on scrap generated at the job worker's premises.
4. Contestation of demand and request for refund by the respondent.
5. Interpretation of whether the amount deposited was duty or a mere deposit.
6. Claim for refund under Section 11B of the Central Excise Act.
7. Awareness of statutory procedures by the respondent.

Analysis:

1. The application filed by the Revenue sought a stay on the operation of the order passed by the Commissioner (Appeals). However, the Tribunal decided to proceed with the appeal itself rather than granting a stay, indicating that the appeal could be finally disposed of at that stage.

2. The appeal by the Revenue was directed against the appellate Commissioner's order granting a refund to the respondent. The dispute arose from the respondent paying an amount towards Central Excise duty and education cess on scrap generated at their job worker's premises, which was disposed of without duty payment. The respondent later admitted the duty liability and made a payment, leading to a subsequent show cause notice proposing demand confirmation. The original authority dropped the demand but refused the refund request, prompting the appeal by the Revenue.

3. The main grievance in the appeal was against the finding that the respondent had specifically claimed a refund and that the amount deposited was not considered duty. The Tribunal analyzed the submissions and concluded that the respondent had accepted duty liability for the scrap, making the amount paid towards duty and cess. The Tribunal found that the respondent's claim for refund was premature and should have followed the prescribed procedure under Section 11B of the Central Excise Act.

4. The Tribunal emphasized that the respondent's payment was for Central Excise duty and education cess, and any claim for refund should have adhered to the statutory scheme. The lower appellate authority's decision to allow the refund was deemed beyond the legal framework, considering the respondent's longstanding involvement in manufacturing activities.

5. Ultimately, the Tribunal set aside the impugned order and allowed the appeal, highlighting the necessity for adhering to the prescribed procedures for claiming refunds under the Central Excise Act.