2015 (10) TMI 893 - AT - Central Excise

Denial of refund claim - Reduction in rate of duty - Held that - Commissioner (Appeals) has rightly relied High Court s order in the case of CCE Vs Addison & Co.(2000 (11) TMI 146 - HIGH COURT OF JUDICATURE AT MADRAS). Revenue s grounds is not on excisability or manufacture of beetle nut only on the refund allowed by the LAA. On merits, we find that it is not a refund which is arising out of any excess payment arising out of any dispute on value or quantity of discount etc. but on account of reduction of rate of duty on bettle nut powder vide Notification 35/98 dt.24.11.98 where the rate of duty was revised from 18% to 15% on the beetle nut powder which came into effect from 24.11.98. By virtue of this notification, appellants were required to pay duty @ 15% instead of 18%. When the rate of duty was reduced on 24.11.98 applicable rate was only 15%. The amount paid in excess of 15% between 24.11.98 and 30.11.98 is not duty and not due to the Government and the same is liable to be refunded to the respondent. The Hon ble High Court Sic in the case of Sunrise Engineers Vs CCE Jaipur (2015 (4) TMI 122 - SUPREME COURT) clearly held that on account of reduction of rate of duty by any subsequent notification, appellants are rightly eligible for refund and also held that no unjust enrichment clause would be applicable. - Decided against Revenue.

Summary

Issues:
Refund claim of excise duty paid at a higher rate due to unawareness of a duty reduction notification.

Analysis:
The case involves a refund claim of excise duty paid at a higher rate due to the inadvertent payment of duty at 18% instead of the reduced rate of 15% for a specific period. The appellant claimed a refund of Rs. 33,975 for the excess duty paid during the period in question. Initially rejected, the appeal was allowed by the Commissioner (Appeals) with consequential relief, leading to the Revenue filing an appeal. The Tribunal's Final Order in 2007 dismissed the Revenue's appeal, prompting the Revenue to file a CMA before the High Court. The High Court set aside the previous order and remanded the matter to the Tribunal to reconsider specific points raised by both parties.

The main contention of the Revenue was that the appellant was not eligible for a refund of the excess duty paid, which was rightly rejected by the adjudicating authority. On the other hand, the appellant argued that they were only seeking a refund for the duty difference between 18% and 15% as they were unaware of the duty reduction initially. They contended that upon becoming aware of the duty reduction, they promptly raised credit notes and returned the excess excise duty to the dealers. The appellant relied on various legal precedents to support their argument.

After considering the arguments from both sides, the Tribunal found that the Revenue's appeal was against the refund allowed by the Commissioner (Appeals). The Tribunal noted that the refund was not related to any dispute on value or quantity but arose due to the reduction of the duty rate on betel nut powder as per a specific notification. The Tribunal emphasized that the excess amount paid between the old and new duty rates was not due to the government and was liable to be refunded to the appellant. Citing legal precedents, including a decision by the High Court, the Tribunal concluded that the appellant was eligible for the refund as per the applicable law. Therefore, the Tribunal upheld the impugned order, rejecting the Revenue's appeal.