2007 (5) TMI 113 - AT - Central Excise

EOU - Revenue contended that respondent is not eligible for refund of payment of duty which is paid for the procurement of LDO during the disputed period - Held that revenue contention was not correct and allowed refund

Summary

Issues:
1. Eligibility for refund of duty paid on LDO procured during the pendency of appeal.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal which allowed the refund claim filed by the respondent. The dispute revolved around the procurement of Light Diesel Oil (LDO) by a 100% Export Oriented Unit (EOU) without payment of duty. The Commissioner (A) had previously allowed an appeal regarding the procurement of LDO without duty payment. However, during the disputed period, the respondent procured LDO under four invoices by paying duty. The Adjudicating authority rejected the refund claim, while the Commissioner (A) allowed it, leading to the Revenue's appeal. The key issue was whether the respondent was entitled to a refund of duty paid on LDO during the pendency of the appeal.

The Tribunal noted that the assessee, being a 100% EOU engaged in manufacturing excisable goods, was eligible for procuring LDO without duty payment as per Notification No. 1/95. The Commissioner (A) had already ruled in favor of the respondent regarding the procurement of LDO without duty payment. The Tribunal highlighted that the Revenue did not appeal against the Commissioner's order, which had attained finality. Therefore, if the assessee procured LDO by paying duty during the appeal period, even though not required to do so, the duty paid on such inputs was deemed refundable to the assessee.

The Commissioner (Appeals) allowed the refund claim, emphasizing that the decision regarding the procurement of LDO without duty payment applied to all LDO procurements during the pendency of the appeal, irrespective of whether they were specifically mentioned in the Order-in-Appeal. It was deemed appropriate to refund all duty paid during the litigation period when the appellate authority's decision favored the assessee. The Commissioner also found the refund claims not time-barred, as they were filed within one year of the Order-in-Appeal, which was passed in favor of the appellant. Consequently, the Tribunal upheld the Commissioner's decision, dismissing the Revenue's appeal as the respondents were deemed eligible for the refund of duty paid on LDO procured during the appeal period.