2017 (7) TMI 891 - AT - Central Excise

Refund of Central Excise duty paid on coal procured - jurisdiction - denial on the ground that the appellant is falling under special economic zone and as such the said officer has no jurisdiction to decide claim by the person located in SEZ, in terms of SEZ Act and Rules made thereunder - Held that - Section 11B states any person claiming refund of any duty of excise. No distinction has been made that the claimant should be the manufacturer or the person, who paid the duty to the Government. Jurisdiction - Held that - In the present case, the duty of excise has been paid by M/s Mahanadi Coal Field Ltd., though by applying the relevant provisions of law, they ought not to have paid the duty as the are to recognized SEZ unit/developer. Regarding the duty paid nature of the product, receipt of the said product by the appellant, there are no disputes - the jurisdiction issue has been under consideration with the Ministry of Finance as well as Minintry of Commerce and ultimately the Ministry of Commerce issued Notification dated 05.08.2016. This Notification specified that the refund, demand, jurisdiction, review and the appeal with reference to various operations under SEZ Act, 2005, shall be with a jurisdiction of Central Excise authorities in accordance with the relevant provisions of Customs Act, 1962, Central Excise Act, 1944 and Finance Act, 1994. We find that the said Notification makes the position amply clear on the question of jurisdiction of Central Excise officers to deal with the claim in the present matter. The impugned order set aside and the original authority directed to examine the claim afresh on merit - appeal allowed by way of remand.

Summary

Issues:
Entitlement of refund of Central Excise duty paid on coal procured for SEZ development.

Analysis:
The appeals involved the entitlement of the appellant for a refund of Central Excise duty paid on coal procured for SEZ development. The original authority rejected the claims, citing lack of jurisdiction as the appellant is located in an SEZ and procedural non-compliance in coal clearance. The Commissioner (Appeals) upheld the rejection based on the same grounds. The appellant argued that under Section 11B of the Central Excise Act, any person suffering duty not payable by law can claim a refund. The appellant contended that since the duty was paid to the jurisdictional authorities, any excess payment should be decided by them. The Tribunal noted that Section 11B allows any person to claim a refund of excise duty without specifying that the claimant must be the manufacturer or the one who paid the duty. Citing relevant case laws, the Tribunal established that the appellant had the locus standi to file a refund claim.

Regarding jurisdiction, the lower authorities held that SEZ entities are outside the territory of India, thus Central Excise officers lack jurisdiction. The Tribunal referred to Gujarat High Court cases and a Ministry of Commerce Notification, clarifying that Central Excise officers have jurisdiction to handle claims related to SEZ operations. The Tribunal emphasized that the duty was paid by the supplier, M/s Mahanadi Coal Field Ltd., despite not being required, and the appellant received the duty-paid coal. The Tribunal directed the original authority to re-examine the claim on merit, considering the observations made.

The Tribunal also addressed the delay in resolving the claim, directing the jurisdictional officer to process the claims and issue an order within three months from the date of the Tribunal's order. The decision provided clarity on the jurisdictional aspect and emphasized the right of any person, including SEZ entities, to claim a refund of excise duty paid in excess, as authorized by law.