2018 (5) TMI 99 - AT - Central Excise

Refund claim - case of Revenue is that even though the invoices are claimed to have cancelled but no intimation was filed with the Dept. nor the procedure laid down under Para 12 of CBEC Manual has been followed - Whether the appellant is entitled to refund duty paid against invoices (Total 11 invoices) dtd 31.3.2013 where the goods were consigned to one M/s Bhawani Industries Ltd, but goods were not cleared from the factory? Held that - the procedure has been laid down in the CBEC Manual to avoid detailed scrutiny of the movement of the goods once proper declaration was filed within the time limit specified under the said procedure. In the event, the procedure has not been followed, the burden is on the assessee to establish, adducing corroborative evidences that the duty though has been paid on the goods, but it could not be cleared from the factory due to cancellation of the order or for any other reason. In the present case, no findings have been recorded in this regard - the matter is remanded to the Adjudicating Authority to ascertain in detail by scrutinizing the evidences produced by the appellant and to arrive at a conclusion on the eligibility of refund. Appeal allowed by way of remand.

Summary

Issues:
- Entitlement to refund duty paid against cancelled invoices without following CBEC Manual procedure.

Analysis:
The appeal before the Appellate Tribunal CESTAT Ahmedabad involved a dispute regarding the entitlement to a refund of duty paid against invoices where the goods were consigned but not cleared from the factory. The Revenue contended that the refund claim was inadmissible as the procedure laid down by CBEC, including the requirement to follow Para 12 of the CBEC Manual, was not adhered to. The Revenue argued that failure to follow the procedure would result in denial of the refund, citing a judgment of the Hon'ble Gujarat High Court. On the other hand, the Respondent argued that there was no intention to evade duty, as evidenced by specific entries in the RG1 Register and other collateral evidence showing that the goods were never removed from the factory despite duty payment. The Respondent also claimed a bonafide mistake in the ER1 return. The Tribunal noted that the Commissioner (Appeals) had not scrutinized the evidence regarding non-clearance of goods and non-recovery of their value, merely basing the decision on procedural non-compliance. The Tribunal emphasized the need to examine all evidence to determine whether the goods were cleared, as well as the burden on the assessee to provide corroborative evidence in case of procedural lapses. As such, the Tribunal remanded the matter to the Adjudicating Authority for detailed scrutiny of the evidence and a conclusion on the refund eligibility.

In conclusion, the Revenue's appeal was allowed by way of remand, with the case disposed of accordingly.