2018 (8) TMI 1384 - AT - Central Excise

Refund of Central Excise duty - It was observed by the officers of DGCEI that the certificates on the basis of which the exemption was claimed by the manufacturers, were forged - Held that - In this case, the goods manufactured and supplied by the appellant, suffered duty twice, one by the appellant and other, by the buyer, M/s. Balrampur Chini Mills. Therefore, the duty paid by the appellant, without claiming the exemption benefit, should be available as refund. However, there is no material available on record to show that M/s. Balrampur Chini Mills Ltd. had discharged the central excise duty liability on the PD pumps supplied by the appellant - for ascertaining the correct factual position, the matter should go back to the original authority. Appeal allowed by way of remand.

Summary

Issues:
Refund of central excise duty paid by the appellant without claiming exemption benefit under Notification No.108/95 dated 20.8.1995 for supply of power driven pumps to M/s. Balrampur Chini Mills.

Analysis:

Issue 1: Refund of central excise duty
The appellant, engaged in manufacturing power driven pumps, supplied pumps to M/s. Balrampur Chini Mills for an industrial project. The appellant paid central excise duty on the supply without availing the exemption under Notification No.108/95 dated 20.8.1995, which required a certificate from the project implementing authority. The refund application was rejected by the original authority and the Commissioner (Appeals). The Tribunal remanded the matter to the Commissioner (Appeals) for fresh consideration. Subsequently, the DGCEI found that certificates used for exemption claims were forged. The Commissioner of Central Excise dropped the show cause proceedings against manufacturers, including the appellant, as Balrampur Chini Mills had already paid the duty. The Commissioner (Appeals) rejected the appellant's appeal. The Tribunal remanded the matter to the original authority to verify if Balrampur Chini Mills had indeed paid the duty, potentially entitling the appellant to a refund.

Issue 2: Duty payment and refund eligibility
The appellant claimed refund based on a certificate from the project sanctioning authority, arguing that both the appellant and Balrampur Chini Mills had discharged the central excise duty liability. The adjudicating authority acknowledged that Balrampur Chini Mills had paid the duty on behalf of the manufacturers. However, the appellant did not claim the exemption benefit, resulting in double duty payment - once by the appellant and once by Balrampur Chini Mills. The Tribunal emphasized the need to confirm if Balrampur Chini Mills had indeed paid the duty. Without evidence of Balrampur Chini Mills' duty payment, the matter was remanded to the original authority for fact-finding. If verified, the appellant may be eligible for the refund claimed in their application.

Conclusion:
The Tribunal allowed the appeal by remanding the matter to the original authority for verification of whether Balrampur Chini Mills had discharged the central excise duty liability on the power driven pumps supplied by the appellant. If confirmed, the refund should be granted to the appellant.