2018 (3) TMI 1232 - AT - Central Excise

Refund of duty - duty was not required to have been paid as the clearance of excisable goods was covered for full exemption under N/N. 108/95-CE dated 28.08.1995 - Held that - the appellant did produce certificate from the Competent Authority through the buyer of the goods which will make them eligible for exemption under N/N. 108/1995-CE. However the said certificate was not submitted before clearance of the goods - on this ground alone the exemption otherwise available cannot be denied to the appellant. The appellant is eligible for refund subject to verification of the payment made by the Original Authority - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of refund of duty under full exemption notification.
2. Rejection of refund claim due to non-submission of required certificate before clearance of goods.

Analysis:
Issue 1: The appellant was denied a refund of duty under a full exemption notification for the clearance of excisable goods covered under notification no.108/95-CE dated 28.08.1995. The appellant manufactured Electronic Point Machines for a Railway project approved by the Asian Development Bank, which qualified for exemption under the said notification. However, due to not procuring the required certificate from the buyer (Railways) before clearance, they mistakenly paid duty amounting to &8377; 5,14,176. Subsequently, the appellant obtained the necessary certificate and filed a refund claim within the stipulated period under Section 11 B of the Central Excise Act, 1944. The Lower Authorities rejected the claim citing non-fulfillment of the essential condition of producing the certificate before clearance, leading to the denial of the claim.

Issue 2: The Tribunal, after hearing both sides and examining the appeal record, noted that although the appellant submitted the required certificate from the Competent Authority through the buyer after the clearance of goods, the exemption eligibility could not be denied solely on this ground. Citing precedents like CCE Vs. Dynaspede Integrated Ltd. and others, the Tribunal held that the appellant was entitled to the refund, subject to verification of the payment by the Original Authority. The Tribunal set aside the impugned order, allowing the appeal and ruling in favor of the appellant.