2018 (3) TMI 237 - AT - Central Excise

Refund claim - exempt item - bagasse - section 11D of Central Excise Act, 1944 - Held that - The nature of waste product in the scheme of Central Excise Act, 1944 has been decided by the Hon ble Supreme Court in Union of India v. DSCL Sugar Ltd 2015 (10) TMI 566 - SUPREME COURT thus according a finality to the issue of liability under rule 6 of CENVAT Credit Rules, 2004 - The amount was thus not payable, and even if liable to be deposited in accordance with section 11D of Central Excise Act, 1944 for having been recovered under the guise of duty, has already been paid by debit of CENVAT credit account - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues: Liability under section 11D of Central Excise Act, 1944; Refund of amount paid under rule 6 of CENVAT Credit Rules, 2004; Applicability of circulars issued by Central Board of Excise & Customs.

In this case, M/s Shri Vitthalsai SSK Ltd, a manufacturer of sugar and allied products, cleared 'bagasse', an exempt item, by paying 5% of the value of the exempt item under rule 6(3)(i) of CENVAT Credit Rules, 2004. The assessee was held liable under section 11D of Central Excise Act, 1944 to deposit a specific amount, which they paid before approaching the Tribunal. The first appellate authority allowed the refund, citing a decision of the Hon'ble High Court and circulars issued by the Central Board of Excise & Customs. The Revenue appealed against this decision.

The Tribunal noted that the respondent had paid the amount both through CENVAT credit account and in cash. The Tribunal upheld the refund based on the decision of the Hon'ble High Court and circulars issued by the Central Board of Excise & Customs, which clarified that the amount chargeable under rule 6 was not a duty of excise and was not liable to be deposited under section 11D. The Tribunal found that the liability under rule 6 of CENVAT Credit Rules, 2004 had already been paid by debit of CENVAT credit account, making the second payment during the appeal a collection in excess from the respondent.

The Tribunal referred to a Supreme Court decision which provided finality to the issue of liability under rule 6 of CENVAT Credit Rules, 2004. The Tribunal concluded that the amount was not payable and the second payment made during the appeal was excessive. The Tribunal dismissed the Revenue's appeal, upholding the impugned order and sanctioning the refund. The cross-objection was also disposed of accordingly.