2018 (3) TMI 1373 - AT - Central Excise

Refund claim - benefit of N/N. 06/2006-CE dated 01.03.2006 - Held that - Admittedly, as per N/N. 06/2006-CE dated 01.03.2006, the duty is not wholly exempt, in that circumstances, the Revenue cannot force to the appellant to avail the benefit of N/N. 06/2006-CE, therefore, the ground of rejection of refund claim is not sustainable - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of refund claims under Notification No.56/2002-CE.
2. Applicability of exemption Notification No.06/2006-CE.
3. Interpretation of Central Excise Act, 1994 regarding availment of notifications.

Analysis:
The appellant, a manufacturer of CFLs, appealed against the rejection of their refund claims under Notification No.56/2002-CE. The Notification allowed refund of duty payable after exhausting cenvat credit. The duty rate on CFL was 16%, which the appellant paid. However, the Revenue contended that the appellant should have availed the benefit of exemption under Notification No.06/2006-CE, which imposed an 8% duty rate on CFLs. The appellant argued that the Notification was optional, and the Revenue could not compel them to avail it. The Tribunal noted that under the Central Excise Act, if duty is wholly exempt, the relevant notification becomes binding for availment. Since duty was not wholly exempt under Notification No.06/2006-CE, the appellant could not be forced to avail it. Consequently, the ground for rejecting the refund claim was deemed unsustainable, and the impugned orders were set aside, allowing the appeals with consequential relief.

This judgment primarily revolves around the conflicting interpretations of the two notifications - No.56/2002-CE and No.06/2006-CE. It delves into the mandatory nature of availing exemptions under the Central Excise Act and clarifies that such availment is only binding when duty is wholly exempt. The Tribunal's analysis emphasizes the appellant's right to choose whether to avail an optional exemption, thereby rejecting the Revenue's argument that the appellant was obligated to avail the concessional rate under Notification No.06/2006-CE. The decision provides clarity on the applicability of notifications and highlights the importance of understanding the legal framework governing duty exemptions and refund claims in excise matters.