2018 (10) TMI 949 - AT - Central Excise

Refund of duty paid - filing of refund claim before the wrong jurisdiction - payment of duty on exempted goods i.e bitumen under N/N. 108/95-CE dated 28.08.1995 - Scope of SCN - refund denied on the ground that there is no provision of refund under N/N. 108/95-CE dated 28.08.1995 - time limitation - Scope of SCN. Held that - Although as per the notification, the supplier of bitumen was not required to pay duty in terms of Notification No. 108/95- CE dated 28.08.1995, but the supplier has supplied the goods on payment of duty to the appellant and it is a fact that as per the said notification duty was not payable on the goods. As per the notification bitumen was not liable to pay duty. In that circumstances, the persons who has suffered duty on the said goods is entitled to file refund claim in terms of the proviso to Section 11(B)(2)(e) of the Central Excise Act. The refund claims sought to be rejected on the ground that the appellant has executed project in Jhajjar and procured bitumen from various manufacturer but did not fall under the jurisdiction of that Division - Held that - In a case where the assessee is not registered with the Central Excise Department, where to file refund claim of duty borne by him has not been prescribed under the Central Excise Act - further, if the adjudicating authority was of the view that the appellant has not filed refund claim with the authorities which is not competent to entertain the refund claim, he would have transferred the application for refund claim before the competent authority but could not have rejected the refund claim simply on the ground that he had no jurisdiction. Time limitation - Section 11B of the Act - Held that - Admittedly, in this case, the refund claim initially was filed by the appellant before the DGFT and DGFT has rejected their refund claim only on 10.03.2013, thereafter the refund claim was filed by the appellant on 26.08.2013. In these circumstances, limitation for filing the refund claim was start on 10.06.2013 i.e. relevant date and the refund claim was filed in time. Revenue also contested that as the refund claim has been rejected by the DGFT, therefore, the appellant cannot file the refund claim - Held that - It is not a case of appeal from one authority to another, but it is a case of filing the refund claim with two independent authorities when both are competent to consider the refund claim - the time spent in pursuing its remedy before the DGFT is to be excluded - refund claim is within time. Scope of SCN - refund claim in the impugned order has been denied on the ground which were not alleged in the show cause notice - Held that - The said grounds cannot be entertained by the appellate authority as those grounds are not the part of the show cause notice and the ld. Commissioner (A) cannot travel beyond the allegation made in the show cause notice. The appellant is entitled for refund claim in terms of Notification No. 108/95-CE dated 18.08.1995 of the duty paid on bitumen as the appellant has borne the duty on the bitumen - refund allowed - appeal allowed - decided in favor of appellant.

Issues Involved:
1. Provision of refund under Notification No. 108/95-CE dated 28.08.1995.
2. Applicability of Notification No. 108/95 to the buyer.
3. Jurisdiction of the adjudicating authority.
4. Admissibility of refund claim under Section 11B of the Central Excise Act, 1944.
5. Time-bar of the refund claim.
6. Unjust enrichment.

Issue-wise Detailed Analysis:

1. Provision of refund under Notification No. 108/95-CE dated 28.08.1995:
The notification grants complete exemption from payment of duty but does not explicitly provide for the payment of duty and subsequent grant of refund. The Tribunal noted that while the supplier of bitumen was not required to pay duty under the said notification, the supplier did so, and the appellant bore this duty. It was held that the appellant, having suffered the duty, is entitled to file a refund claim under the proviso to Section 11(B)(2)(e) of the Central Excise Act, as supported by the decision in Mafatlal Industries Limited.

2. Applicability of Notification No. 108/95 to the buyer:
The Tribunal found that the notification exempts the goods from duty, and this exemption extends to the buyer as well. The appellant was burdened with duty for a product that was not dutiable, thus entitling them to a refund. The Tribunal emphasized that the notification does not prescribe the manner of refund, but this does not negate the appellant's right to claim it.

3. Jurisdiction of the adjudicating authority:
The refund claim was initially rejected on the ground that the appellant did not file it with the proper jurisdictional officer. The Tribunal held that if the adjudicating authority believed it lacked jurisdiction, it should have transferred the claim to the competent authority rather than rejecting it. The Tribunal also noted that the adjudicating authority entertained the refund claim on merits, thus implicitly accepting its jurisdiction.

4. Admissibility of refund claim under Section 11B of the Central Excise Act, 1944:
The Tribunal reiterated that the refund claim is admissible under the proviso to Section 11B(2)(e) as the appellant bore the duty. The Tribunal referenced the case of Mafatlal Industries Limited, which supports the admissibility of the refund claim in such circumstances.

5. Time-bar of the refund claim:
The refund claim was initially filed with the DGFT, which rejected it on 10.03.2013. The appellant then filed the refund claim with the Central Excise authorities on 26.08.2013. The Tribunal held that the limitation period started from the date of the DGFT's rejection, making the claim timely. The Tribunal also noted that the duty paid by the appellant was not legally due, and thus, the amount paid was not duty in the legal sense but an amount paid under a bona fide mistake, which should be refunded.

6. Unjust enrichment:
The Tribunal found that the bar of unjust enrichment does not apply as the appellant bore the duty and did not recover it from the service recipient. The execution of the work was exempt from payment of duty/service tax, thus satisfying the condition against unjust enrichment.

Conclusion:
The Tribunal concluded that the appellant is entitled to a refund of the duty paid on bitumen under Notification No. 108/95-CE, as the appellant bore the duty. The impugned order rejecting the refund claim was set aside, and the appeal was allowed with consequential relief. The Tribunal emphasized that the grounds for rejection not stated in the show cause notice cannot be entertained by the appellate authority.

← Previous Next →