2015 (11) TMI 1344 - AT - Central Excise

Denial of refund claim - remission of duty - damaged / destroyed goods - Misdeclaration of value - Held that - Before clearance of the goods and during the process of loading, one of the drums fell down as a result of which its content got damaged and as a result of this the consignment itself was not despatched and the same was dispatched subsequently under the invoice no. 1815 dated 31/3/2003. There is also no dispute at the time of clearance of the goods under invoice no. 1815 dated 31/3/2003 the duty had been paid once again. From this, it is clear that in respect of the second drum for which the appellant had not claimed any reimbursement from the insurance company the duty had been paid twice. In our view, the provision of Rule 16 of the Central Excise Rule, are not applicable as the goods had been damaged when the same were being loaded in the factory. In view of this, we hold that there is no infirmity in the Commissioner (appeals) order sanctioning the refund. - Decided in favor of assessee. If prior to the period of supply, the rate at which the goods were to be supplied had been decided and the same was reduced only subsequently, the judgment of Apex Court in the case of MRF Limited Vs. CCE Madras 1997 (3) TMI 104 - SUPREME COURT OF INDIA would be applicable and the respondent would not have eligible for refund. For ascertaining this factual position, the matter has to be remanded - while the Commissioner (appeals) s order in respect of the refund claims of ₹ 26,702/- and 1701/- is upheld his order in respect of the refund claims of ₹ 1,48,253 and 87,479/- is set aside and the matter is remanded to the original adjudicating authority for de-novo adjudication - Decided party in favour of Revenue.

Issues Involved:
1. Refund claim of Rs. 2,702/- for duty paid twice on a consignment of optical fibre cables.
2. Refund claim of Rs. 1,701/- for duty paid on a higher rate due to clerical error.
3. Refund claim of Rs. 1,48,253/- for duty paid on a higher rate for goods supplied to M/s. Bharti Touch Tell.
4. Refund claim of Rs. 87,479/- for duty paid on a higher rate for goods supplied to M/s. Tata Tele Services.

Issue-Wise Detailed Analysis:

1. Refund Claim of Rs. 2,702/- for Duty Paid Twice:
The respondents, manufacturers of optical fibre cables, initially cleared two drums under invoice no. 960 dated 25/11/2002, paying duty through PLA. One drum was damaged during loading, and the consignment was not cleared. The goods were later cleared on 31/3/2003 under invoice no. 1815, with duty paid again. The respondents applied for a refund of Rs. 2,702/- as duty was paid twice. The Assistant Commissioner rejected the claim, but the Commissioner (Appeals) reversed this decision. The Tribunal upheld the Commissioner (Appeals) order, noting that the goods were damaged during loading, making Rule 16 of the Central Excise Rules inapplicable.

2. Refund Claim of Rs. 1,701/- for Duty Paid on Higher Rate:
The respondents cleared goods under invoice no. 1075 dated 11/12/2002, paying duty on a higher rate of Rs. 47,500/- per km instead of the correct rate of Rs. 46,500/- per km due to a clerical error. The Assistant Commissioner rejected the refund claim, but the Commissioner (Appeals) allowed it. The Tribunal found no infirmity in the Commissioner (Appeals) order, as the respondents received payment based on the commercial invoice rate of Rs. 46,500/-.

3. Refund Claim of Rs. 1,48,253/- for Duty Paid on Higher Rate for Goods Supplied to M/s. Bharti Touch Tell:
The respondents cleared goods under invoice no. 71 dated 25/4/2003, paying duty based on a rate of Rs. 1,36,500/- per km. M/s. Bharti Touch Tell later informed the respondents that the correct rate per their rate contract was Rs. 69,800/- per km, and payment was received at this rate. The Assistant Commissioner rejected the refund claim, but the Commissioner (Appeals) allowed it. The Tribunal noted that if the rate contract specified Rs. 69,800/- per km, the case would not involve a post-clearance rate revision, making the MRF Limited judgment inapplicable. The matter was remanded to verify the rate contract details.

4. Refund Claim of Rs. 87,479/- for Duty Paid on Higher Rate for Goods Supplied to M/s. Tata Tele Services:
The respondents cleared goods during October 2002 to January 2003, paying duty based on old rate contracts as the new rates were not finalized. The Assistant Commissioner rejected the refund claim, but the Commissioner (Appeals) allowed it. The Tribunal noted that if the rates were not fixed during the supply period and were finalized later, the respondents would be eligible for a refund. The matter was remanded to ascertain whether the rates were decided post-supply.

Conclusion:
The Tribunal upheld the Commissioner (Appeals) orders for refund claims of Rs. 2,702/- and Rs. 1,701/-, finding no infirmity. However, the refund claims of Rs. 1,48,253/- and Rs. 87,479/- were remanded for de-novo adjudication to verify the factual positions regarding rate contracts and supply periods. The Revenue's appeal was partly allowed.

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