2011 (12) TMI 448 - AT - Central Excise

Denial of refund claim - Denial on the ground that the respondent could not correlate the goods sent to Kandla terminal with the goods exported to Kandla - Held that - Section 11B provides for refund of duty. Section 11B also provides that refund includes rebate. For rebate, the form and manner are prescribed under Rule 18 of the Central Excise Rules. Undisputedly, this is a case of export of goods and therefore, it is covered under rebate of duty in terms of Rule 18 ibid, and not under refund of duty. It is a settled law that a question of law can be taken up at any stage and the maintainability of refund involves question of law. Therefore, the issue raised by the Revenue, is maintainable. Since the maintainability of the refund has not been dealt with at the stage of Commissioner (Appeals), the same is required to be examined. Therefore, the case is remanded to the learned Commissioner (Appeals) to decide the maintainability of the refund, keeping in view the proposition of law that taxes are not exported - Decided in favour of Revenue.

Issues:
1. Refund claim for Central Excise duty on goods exported.
2. Maintainability of refund under Section 11B of the Central Excise Act, 1944.
3. Dispute regarding following procedures for claiming refund.
4. Interpretation of Section 11B and Rule 18 of the Central Excise Rules.
5. Time limitation for claiming refund.

Analysis:

1. Refund Claim for Central Excise Duty on Goods Exported:
The respondent, engaged in manufacturing petroleum products, filed a refund claim for Central Excise duty on goods exported to IOCL, Kandla terminal. The lower Adjudicating Authority rejected the claim, citing the inability to correlate the goods sent with those exported. However, the Commissioner (Appeals) allowed the refund, considering transit loss. The Revenue appealed this decision.

2. Maintainability of Refund under Section 11B:
The Department argued that the refund was granted under Section 11B, which governs rebate for exported goods. They contended that the duty payment by the respondent's refinery was in accordance with Central Excise Law, making the refund claim under Section 11B not maintainable. This issue was raised for the first time before the Tribunal, emphasizing the question of law regarding the maintainability of the refund.

3. Dispute Regarding Following Procedures for Claiming Refund:
The respondent asserted that despite the procedural error, the export of goods should not disentitle them from claiming the benefit. They cited a judgment in support of their position. The Department argued that the prescribed procedures must be strictly followed, referring to a Supreme Court decision to support their contention.

4. Interpretation of Section 11B and Rule 18 of the Central Excise Rules:
The Tribunal analyzed Section 11B, which provides for refund of duty, including rebate. It clarified that in the case of exported goods, rebate under Rule 18 of the Central Excise Rules applies, not refund. The Tribunal emphasized that the maintainability of the refund involves a question of law, which can be raised at any stage.

5. Time Limitation for Claiming Refund:
The Tribunal directed the Commissioner (Appeals) to decide on the maintainability of the refund, considering the time limitation under Section 11B. It instructed an expeditious resolution within three months, ensuring a fair hearing for the respondent. The case, pending since 2007, required a prompt decision on the refund claim.

In conclusion, the Tribunal remanded the case to the Commissioner (Appeals) for a detailed examination of the maintainability of the refund claim, emphasizing the distinction between rebate and refund under the Central Excise Act. The decision highlighted the importance of following prescribed procedures and timely resolution of legal disputes related to duty refunds.

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