2016 (3) TMI 102 - AT - Central Excise

Refund of amount paid as 8% of value of exempted goods - eligibility to get back the amount already paid by them in terms of Rule 57CC of erstwhile Central Excise Rules, 1944/Rule 6 of Cenvat Credit Rules, 2002 - Held that - For sulphuric acid the provisions of Rule 57CC cannot be made applicable in the facts and circumstances of the appellant s case. As such, no amount is payable by the appellant on this ground. It follows that the amount already paid has to be refunded to them. Both the sides agree that provisions of Section 11B will not apply as the payment under Rule 57CC is not as Excise duty. It is only an amount equivalent to certain percentage of exempted goods cleared by the appellant. We note that the appellants have paid the amount earlier, under protest, and the matter has been decided in their favour by the Hon ble Supreme Court. The lower Authorities have not given any finding on merit on the claims filed by the appellants. Considering the above position, even if the amount paid by the appellants are to be considered as not an Excise duty, the same has to be returned to the appellants. Such amount already paid in terms of Rule 57CC, even if not considered as Excise duty, will be in the nature of a deposit which the Government cannot retain without legal sanction. Thus find that the appellants are rightly eligible for return of the amount already paid by them under the above said Rules. The Jurisdictional Original Authority is directed to take necessary action for returning the said amount at the earliest. The appeals filed by the appellants are disposed of in the above terms.

Summary

Issues:
- Claim for refund of amount paid as 8% of value of exempted goods under Rule 57CC of Central Excise Rules, 1944.

Analysis:
1. Issue of Appellant's Liability under Rule 57CC:
The case involved the appellant's claim for a refund of the amount paid as 8% of the value of exempted goods under Rule 57CC of the erstwhile Central Excise Rules, 1944. The appellant, engaged in the manufacture of non-ferrous metals, faced demands from the Department for payment under Rule 57CC for exempted sulphuric acid. However, the Commissioner (Appeals) and subsequent higher courts held that the appellant was not liable to pay under Rule 57CC for sulphuric acid, considering it a technological necessity and not a final product. The Hon'ble Supreme Court's judgment further clarified that no amount was payable under Rule 57CC when clearing sulphuric acid without payment of duty.

2. Claim for Refund and Application of Section 11B:
The appellant sought a refund of the amount paid under Rule 57CC, contending that since they were not liable to pay for exempted sulphuric acid, the amount should be returned. The lower Authorities refused the refund, citing lack of finality on the appellant's liability under Rule 57CC. The appellant argued that Section 11B of the Central Excise Act, 1944 did not apply as the amounts were not paid as Central Excise duty. Both parties agreed that as per the Hon'ble Supreme Court's decision, no amount was payable by the appellant under Rule 57CC for sulphuric acid without duty payment.

3. Decision on Refund Eligibility and Legal Sanction:
After considering the arguments and the Hon'ble Supreme Court's judgment, the Tribunal concluded that the appellant was eligible for the return of the amount paid under Rule 57CC. The Tribunal emphasized that even if the amount was not considered as Excise duty, it should be refunded to the appellant as it was akin to a deposit, which the Government could not retain without legal sanction. The Jurisdictional Original Authority was directed to take necessary action for the prompt return of the said amount to the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the refund claim for the amount paid under Rule 57CC for exempted goods, particularly sulphuric acid, based on the exemption granted by the Hon'ble Supreme Court and the nature of the payment as a deposit rather than Excise duty.