2009 (4) TMI 518 - HC - Central Excise

Rejection of Refund claim rejected - Tribunal had rejected the appeal on the ground that even in the affidavit filed by the Consignment Agent there is admission that the depot invoice made it appear that those invoice were issued from the administrative office of the consignment agent. - The issue involved is question of fact and not the question of law - appeal dismissed.

Summary

Issues:
- Discrepancy in addresses on invoices
- Rejection of refund claim by the Department
- Correlation of goods sold by Consignment Agent with goods dispatched from factory
- Burden of proof on the Department
- Non-mentioning of individual bag numbers in invoices affecting transaction nature

Analysis:
The case involved appeals arising from a common order by the CESTAT regarding the rejection of refund claims by the Department. The manufacturer of cotton yarn claimed a refund of excise duty not passed on to the buyer, but the Department rejected the claim citing discrepancies in addresses on invoices and lack of correlation of goods sold by the Consignment Agent with those dispatched from the factory. The Department issued show cause notices under Section 11B of the Central Excise Act, 1944, mentioning discrepancies in addresses and lack of bag numbers in invoices as grounds for rejection.

The appellant responded, explaining the address discrepancy as due to factory invoices showing the agent's depot address while the agent's invoices displayed the office address. They also argued that correlation was possible by matching invoices despite the lack of bag numbers. However, the Department remained unsatisfied, stating that without evidence of goods being sold elsewhere, refund claims couldn't be sanctioned. This decision was upheld by the Appellate Authority and the CESTAT.

The High Court framed substantial questions of law, focusing on the burden of proof on the Department and the impact of non-mentioning bag numbers on the transaction nature. The appellant argued that address discrepancies shouldn't lead to claim rejection, emphasizing that all goods were sent and specific sales couldn't be determined. The Department contended that identification marks were necessary for correlation, and without them, the appeal should be dismissed.

Upon review, the Court found that the Tribunal rejected the appeal due to insufficient correlation between goods covered in depot and factory invoices, leading to the dismissal of the refund claim. The Court concluded that the issues were factual, with no substantial legal questions, resulting in the dismissal of the appeals without costs.