2017 (5) TMI 554 - AT - Central Excise

Refund claim - excess paid duty - the case of Revenue is that the amount was paid voluntarily and it was not a mistake of fact, hereby denying refund - Held that - it appears that the appellant agreed with reconciliation and paid this amount voluntarily - the duty deposited was not mistake of fact because the appellant has been fully aware of reconciliation statement and payment was made in two instalments. Admittedly, the duty was not paid under protest. Hence, it was recovery of excess refund taken vis-a-vis what was admissible to them. The appellant s other plea is that the adjudicating authority has not given an opportunity of hearing to the appellant. This plea should have been taken before the first appellate authority in the proceeding. In any event, they were given personal hearing at the appellate level. From that angle, the impugned order of the Commissioner (Appeals) does not suffer from any infirmity. Appeal dismissed - decided against assessee.

Summary

Issues:
Claim of refund under Notification No.56/2002-Central Excise, treatment of goods as inputs under Rule 16 of the Central Excise Rules, 2002, voluntary deposit of excess refund, opportunity of hearing under section 33A of the Central Excise Act, 1944.

Analysis:

1. Refund Claim and Treatment of Goods as Inputs:
The appellants, manufacturers of Herbicides and Insecticides, claimed a refund under Notification No.56/02-CE for duty paid on goods found defective and returned for remaking. They treated the returned goods as inputs under Rule 16 of the Central Excise Rules, 2002, and cleared the remade goods after payment of duty. The appellant contended that they did not claim a refund for the remade goods and paid the duty from Cenvat Credit. However, the Revenue argued that excess refund was detected during reconciliation, leading to a voluntary deposit by the appellants.

2. Voluntary Deposit of Excess Refund:
The Revenue asserted that the excess refund amount was voluntarily deposited by the appellants after reconciliation for the year 2013-14, following a visit by preventive staff. The appellant's argument of coercion or pressure was refuted based on the absence of evidence and the voluntary nature of the deposit. The Tribunal cited a previous case to support the notion that duty paid towards admitted liability cannot be refunded.

3. Opportunity of Hearing and Adjudication:
The appellant claimed that they were not given a proper opportunity of hearing as required under section 33A of the Central Excise Act, 1944. However, the Tribunal found that the appellant had received a personal hearing at the appellate level, and any plea regarding the lack of opportunity should have been raised before the first appellate authority. The Tribunal upheld the decision of the Commissioner (Appeals) as the duty deposit was not a mistake of fact, and the appellant was aware of the reconciliation process and paid the amount voluntarily without protest.

4. Final Decision:
After considering the arguments from both sides and examining the records, the Tribunal concluded that the impugned order of the Commissioner (Appeals) was valid. Consequently, the appeal filed by the appellant was dismissed, upholding the decision regarding the excess refund deposit and the treatment of duty paid as recovery of the excess refund taken by the appellants.

This detailed analysis highlights the key legal aspects and arguments presented in the judgment, covering the issues of refund claims, treatment of goods as inputs, voluntary deposit of excess refund, and the opportunity of hearing during adjudication.