2018 (7) TMI 248 - AT - Central Excise

Refund of duty paid in Cash - manufacturing of cement - different rates when manufactured using Clinker and using Limestone & Gypsum - N/N. 20/2008-CE dated-27/03/2008 - Held that - The appellant s method of computation of the annual differential refund is not acceptable. Every exemption Notification exempts excisable goods productwise mentioned therein. Therefore, exemption is required to be quantified excisable goods wise. Paragraph 4 (1), which provides for annual differential refund, does not provide for computation on a different basis. For each category, full refund equal to the duty payable on value addition has been sanctioned, both monthly and annually - The issue involves is the quantification aspect in detail - matter referred to the original adjudicating authority to look into the calculation aspect - appeal allowed by way of remand.

Summary

Issues:
- Appeal against rejection of refund in terms of annualized refund scheme
- Computation of differential refund amount
- Interpretation of exemption notification regarding duty payable on value addition

Analysis:
1. The appellant filed an appeal against the rejection of the refund by the Commissioner (Appeal) in accordance with the Order-in-Original. The appellant, a cement manufacturer in Assam, availed benefits under Notification No. 20/2007-CE for refund based on duty paid from PLA. Subsequent notifications introduced the concept of value addition and annualized refund, which the appellant claimed was not fully considered in the refund calculation.

2. The appellant argued that the Assistant Commissioner failed to account for a specific refund amount while granting the annualized refund. The appellant contended that the monthly variation in refund due to CENVAT Credit utilization was not relevant for the annualized refund scheme, as per the notifications and circulars.

3. The Revenue's representative defended the rejection of the refund, stating that the duty payable on value addition should not exceed the duty payable through PLA. The calculation of refund was done goods-wise, and the Commissioner (Appeal) upheld this decision. The duty payable on value addition was determined based on the type of raw materials used in cement manufacturing.

4. The Tribunal found that the appellant's method of computing the annual differential refund, combining all commodities, was not acceptable. Each category of goods required separate quantification for exemption and refund, as per the notification. The Tribunal emphasized that the monthly refund and annual differential refund were category-specific, ensuring that the total refund did not exceed the duty payable on value addition for each category.

5. While upholding the principle of the impugned order, the Tribunal referred the matter back to the adjudicating authority for a detailed calculation review. The issue primarily revolved around the quantification aspect, directing a reevaluation based on the observations made in the judgment.

6. Ultimately, the appeal was disposed of by way of remand, with the quantification aspect left for the original adjudicating authority to address in accordance with the principles outlined in the judgment.