2013 (12) TMI 388 - AT - Central Excise

Refund claim as per Notification No. 56/2002-CE Held that - The assessee failed to receive the goods in their factory within the stipulated period of six months, they paid the amount as duty on the said goods and on receiving back the said goods, filed the refund claim under Section 11B of the Act - The Rule 16 is different from Rule 16 (C), as the former deals with only those goods on which duty was paid at the time of removal of goods - goods were cleared without payment of duty under the special procedure laid down under Rule 16 (C) of the Rules and duty was paid subsequently when goods could not be brought back in the factory within six months period - Secondly, Rule 16 (1) deals with those goods which are received back in the factory for recondition, repair or re-made whereas in the present case goods were not received back because of above stated purposes, but received back after carrying out tests under the special procedure for removal of excisable goods laid down as per provisions of Rule 16 (C) of the Rules - Rule 16 is different from Rule 16 (C) and the refund stands rightly sanctioned Decided against Revenue.

Issues:
1. Appeal against order passed by Commissioner (Appeals) regarding refund claim under Notification No. 56/2002-CE.
2. Interpretation of Rule 16 (C) of the Central Excise Rules regarding removal of excisable goods for testing without payment of duty.
3. Entitlement to Cenvat credit of duty paid on goods removed under Rule 16 (C) and subsequent refund claim under Section 11B of the Central Excise Act.

Analysis:

1. The case involved an appeal by the Revenue against the rejection of a refund claim by the Commissioner (Appeals) under Notification No. 56/2002-CE. The appellants, engaged in manufacturing Power Distribution Transformers, had removed a transformer for testing without duty payment, with permission to bring it back within 6 months. Due to a breakdown at the testing facility, the transformer was not returned within the stipulated period. Subsequently, duty was paid, and a refund claim was filed under Section 11B of the Act, which was sanctioned by the adjudicating authority. The Revenue's appeal was rejected by the Commissioner (Appeals) and upheld by the Appellate Tribunal, as the refund was found to be rightly sanctioned.

2. The key issue revolved around the interpretation of Rule 16 (C) of the Central Excise Rules concerning the removal of excisable goods for testing without payment of duty. The Commissioner (Appeals) noted that the respondents had cleared the goods for testing under Rule 16 (C) with the condition to bring them back within 6 months. When the goods were not returned within the specified period, duty was paid, and a refund claim was filed. The Commissioner clarified that Rule 16 (C) differs from Rule 16, emphasizing that the goods were cleared without duty payment initially and duty was paid later due to the delay in returning the goods, justifying the refund under Section 11B of the Act.

3. Another aspect addressed was the entitlement to Cenvat credit of duty paid on goods removed under Rule 16 (C) and the subsequent refund claim under Section 11B of the Central Excise Act. The Commissioner (Appeals) rejected the Revenue's contention that Cenvat credit should apply, highlighting the distinction between Rule 16 and Rule 16 (C). The Appellate Tribunal concurred with this interpretation, affirming that the refund was correctly sanctioned as per the provisions of Rule 16 (C) governing the special procedure for removal of excisable goods for testing. The appeal was dismissed, emphasizing the difference between the rules and upholding the decision on the refund claim.

This detailed analysis outlines the legal issues, interpretations of relevant rules, and the rationale behind the decision, providing a comprehensive understanding of the judgment.

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