2023 (12) TMI 1290 - AT - Central Excise

Eligibility for refund/ self-credit - Area-based exemption under Notification No.56/2002 dated 14.11.2002 as amended - Department was of the opinion that under Section 3, no refund/ self-credit was available as the said Cesses have not been exempted under the Notification No.56/2002. The impugned order considers the self-credit taken by the appellants as erroneous credit and confirms the demand of the same in terms of Section 11A of Central Excise Act, 1944 along with interest and penalty under Section 11AC ibid. HELD THAT - The impugned order cannot be sustained and is accordingly set aside. Hence, the appeal is allowed.

Summary

Issues involved:
The issue involves availing self-credit on Education Cess and Secondary and Higher Education Cess u/s 3 of Notification No.56/2002, applicability of Section 11A of Central Excise Act, 1944, and the correctness of the impugned order regarding erroneous credit.

Details of the judgment:

1. The appeal was filed by M/s Alu Bond Enterprises against the OIA dated 31.12.2015, where the learned Commissioner (Appeals) upheld the order dated 11.03.2015 passed by the Assistant Commissioner.

2. The appellants availed self-credit on Education Cess and Secondary and Higher Education Cess u/s 3 of Notification No.56/2002. The Department contended that no refund/self-credit was available for these Cesses under the said Notification. This stand was supported by a previous Tribunal decision in the case of Jindal Drugs & Others.

3. The appellants argued that the issue was covered by a decision of the Bench in the case of M/s Ravi Crop Science, following the jurisdictional High Court's ruling in the case of Krishi Rasayan Exports Ltd. They also mentioned that the impugned order had become infructuous as the Assistant Commissioner had rejected the refund claimed by the appellants.

4. The Department's representatives reiterated the findings of the impugned order.

5. Upon hearing both sides and examining the records, the Tribunal found that the impugned order considered the self-credit as "erroneous" and demanded the same under Section 11A of the Central Excise Act, 1944, along with interest and penalty. However, citing a High Court ruling, the Tribunal held that a refund cannot be termed as "erroneous" and recovered under Section 11A unless there is fraud, collusion, wilful misstatement, or contravention of the law.

6. The Counsel for the appellants also mentioned that the Assistant Commissioner had quantified the refund admissible to the appellants in separate orders.

7. Consequently, the Tribunal concluded that the impugned order could not be sustained and set it aside, allowing the appeal.

*(Pronounced on 08/12/2023)*