2010 (9) TMI 1013 - AT - Central Excise

Issues Involved:
1. Maintainability of the appeal.
2. Finalization of assessment.
3. Claim for refund.

Issue-wise Detailed Analysis:

1. Maintainability of the Appeal:
The Hon'ble Punjab and Haryana High Court set aside the Tribunal's order dated 15-2-2007, which dismissed the appeal on the ground of non-maintainability. The High Court held that the Tribunal erred in dismissing the appeal based on technical grounds and should have decided the real controversy between the parties on merits. The Tribunal was directed to decide the appeal afresh on merits in accordance with law.

2. Finalization of Assessment:
The provisional assessment for the period from April 1996 to September 1996 was made under an order dated 7-9-1994 due to a dispute over the exact normal price of the goods cleared by the appellants. The Assistant Commissioner, Rohtak, issued a letter dated 5-3-1997 directing the Superintendent, Central Excise Range, Hisar, to finalize the assessment subject to the production of sales details and deposit of differential duty. The Superintendent informed the appellants on 5-5-1997 that the provisional assessment was finalized subject to the same conditions. However, the Hon'ble High Court found that these letters could not be considered as formal orders of final assessment. The Tribunal noted that the records did not disclose any proper order of finalization of assessment, and the question of refund could only arise after such finalization.

3. Claim for Refund:
The appellants paid an amount of Rs. 3,35,992/- as differential duty and subsequently filed a refund claim for this amount on 10-10-1997. The refund claim was initially rejected by the department on 28-11-1997. The Commissioner (Appeals) allowed the appeal against this rejection and remanded the matter for a fresh decision. On 12-4-2000, the Assistant Commissioner, Rohtak, ordered a refund of Rs. 2,92,166/- out of the total amount, stating that the actual depot price was irrelevant for determining the assessable value when the ex-factory price was available. The department appealed this order, and the Commissioner (Appeals) set aside the refund order on 11-11-2004, citing that the appellants had not challenged the final assessment order dated 5-5-1997. The Tribunal upheld this decision on 9-2-2007, referencing the Supreme Court's decision in the Flock India (P) Ltd. case, which emphasized that a refund claim cannot be entertained without challenging the final assessment order.

The Tribunal, in its fresh decision, reiterated that the refund claim could not be entertained without a proper finalization of assessment. The order dated 12-4-2000 was deemed not to be an order of final assessment but solely related to the refund claim. The Tribunal emphasized that the refund claim must be preceded by the finalization of assessment, as mandated by the Supreme Court in the Flock India (P) Ltd. case. The Tribunal found no basis to interfere with the impugned order and dismissed the appeal, stating that there was no case for a refund at this stage without finalization of assessment.

Conclusion:
The appeal was dismissed as the Tribunal found that there was no proper finalization of assessment, and hence, the refund claim could not be entertained. The Tribunal upheld the decision of the Commissioner (Appeals) and emphasized the necessity of following the legal procedure for finalization of assessment before claiming a refund.

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