2015 (11) TMI 360 - AT - Central Excise

Denial of refund claim - payment of excess duty - held that - The period extended for supply of its remaining quantity was also lapsed. Therefore as against 61,000 quintals the respondent could clear 17,329 quintals, hence excise duty paid by the respondent is in excess to what was payable and refund for an amount of ₹ 37,12,051/- arises. Refund was rejected by the Adjudicating authority only on the ground E.R.1 return shows clearance of quantity of 61,000 quintals and accordingly whatever duty was paid was correct and no refund arises. I find that superintendent (Appeals) has conducted verification of the records by visiting factory of the respondent and from his report it is found that on verification of RG 1 register, invoices, etc. it was established that against 61,000 quintals for which duty was paid, only quantity of 17329 quintals were cleared and even no further production has taken place. With this undisputed facts, it is clear that the respondent has paid excess duty and they were legally entitle for refund. - Decided against Revenue.

Issues:
1. Refund claim for excess duty deposited in anticipation of clearances of free sale sugar.
2. Rejection of refund claim by the Jurisdictional officer.
3. Appeal filed by the respondent before the Commissioner (Appeals).
4. Verification of records and factory visit by the Superintendent (Appeals).
5. Allowance of the appeal by the Commissioner (Appeals) for the refund claim.
6. Revenue's appeal challenging the Commissioner's decision.

Detailed Analysis:
1. The case involved a refund claim for excess duty deposited by the appellant in anticipation of clearances of free sale sugar. The appellant had paid duty on a total quantity of 61,000 quintals based on an authorization certificate. However, they could only clear 17,329 quintals, leading to an excess payment of duty amounting to Rs. 37,12,051. The refund claim was rejected by the Jurisdictional officer citing grounds such as E.R.1 return showing clearance of 61,000 quintals and the inability to verify actual stock due to advance duty payment without mentioning invoice numbers.

2. The appellant filed an appeal before the Commissioner (Appeals) challenging the rejection of the refund claim. The Commissioner, after reviewing records and conducting verifications, allowed the appeal on the basis that the appellant had indeed paid excess duty and was entitled to a refund. The Commissioner's decision was based on the Superintendent (Appeals) report, which confirmed that only 17,329 quintals were cleared against the paid duty on 61,000 quintals.

3. The Revenue, dissatisfied with the Commissioner's decision, filed an appeal challenging the allowance of the refund claim. The Revenue argued that since the ER-1 returns showed 61,000 quintals, the duty payment was correct, and no refund should be granted. The Revenue further contended that without physical stock verification, it could not be ascertained if the duty was paid in excess or against actual clearances.

4. Despite efforts to serve notice to the respondent, no appearance was made on their behalf during the hearing. The case proceeded based on the available records. The judge carefully considered the arguments presented by the Revenue and reviewed the case records along with the findings of the Commissioner (Appeals) and the Superintendent (Appeals).

5. The judge noted that the Commissioner (Appeals) had correctly allowed the refund claim based on the verified facts that only 17,329 quintals were cleared against the duty paid on 61,000 quintals. The judge upheld the Commissioner's decision, stating that the appellant had indeed paid excess duty and was legally entitled to a refund. The judge found no infirmity in the Commissioner's order and dismissed the Revenue's appeal, affirming the decision in favor of the appellant.

In conclusion, the judgment upheld the appellant's refund claim for excess duty payment, emphasizing the importance of verifying actual clearances against duty paid and rejecting the Revenue's appeal challenging the refund allowance.

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