2018 (3) TMI 6 - AT - Central Excise

Refund of excess duty paid - denial on the ground that cenvat credit availed on Servo Chainkote by the LPG bottling plants had not been reversed, the CAS-4 certificated submitted by the appellant has not been accepted by the department and that the claims are hit by unjust enrichment and time bar. Held that - All the relevant materials are now available with respect to costing of the LPG, CAS-4 certificate in respect of the product in question Servo Chainkote and accordingly, the whole exercise for the period needs to be redone and the excess payment so determined is required to be refunded. Matter remanded with direction to the adjudicating authority to rework out the incidence of duty as per the CAS-4 certificate on record, or now available with the appellant for the relevant period - appeal allowed by way of remand.

Summary

Issues:
- Rejection of refund for excess duty paid by the appellant
- Allegation of short payment of duty on clearance of Servo Chainkote
- Dispute over assessable value calculation
- Denial of refund claims by the department
- Unjust enrichment and time bar considerations

Analysis:
The appellant filed an appeal against the rejection of a refund for the period July 2000 to September 2006 due to excess duty paid on clearances of their product Servo Chainkote. The appellant's product was cleared to their LPG bottling plants for various uses, leading to a dispute over the assessable value calculation. The Revenue alleged short payment of duty, issuing notices demanding duty along with interest and penalties. The adjudication confirmed the demand, stating the appellant failed to provide cost details for correct valuation. The appellant appealed, depositing the confirmed amount under protest. They engaged a Cost Accountant to ascertain production costs, leading to refund claims for different periods, which were initially denied by the department.

The refund claims were rejected on grounds of cenvat credit not being reversed, non-acceptance of the Cost Accountant's certificate, and unjust enrichment considerations. The matter was remanded back for de novo adjudication. The appellant argued against unjust enrichment, citing payments made under protest and demonstrating the subsidy scheme for under-realization settlement. The appellant's counsel highlighted the selling price of LPG being below cost and requested the appeal's allowance. The learned Additional Commissioner supported the impugned order.

Upon considering the contentions, the Tribunal found the issue required reconsideration. With all relevant materials available, including the CAS-4 certificate for Servo Chainkote, the Tribunal directed a reevaluation of the duty incidence for the relevant period. Any excess payment identified was to be refunded to the appellant with interest, and the imposed penalty was set aside. The appeal was allowed by way of remand, with the cross objection also disposed of.