2007 (12) TMI 58 - AT - Central Excise

Goods manufactured by M/s. Essar Steel Ltd. have been supplied to assessee & the goods have been used in building of vessels which were supplied to the coast guard - materials for use in building ship for coast guard can be cleared without payment of duty u/not.. 64/95 - As the certificate from the coast guard hasn t been received in time so goods were cleared on payment of duty - refund claim allowed subject to adjustment of credit to input used in mfg. of goods cleared by M/s. Essar Ltd

Summary

Issues:
Department's appeal against Commissioner (Appeals) order for refund claim eligibility and quantification.

Analysis:
The case involved a dispute regarding a refund claim by the respondent, a buyer of materials used in building vessels for the coast guard. The respondent claimed a refund after paying duty on materials supplied by M/s. Essar Steel Ltd. due to a delay in receiving the required certificate from the coast guard. The original authority rejected the claim, but the Commissioner (Appeals) allowed the refund, remanding the matter for quantification after adjusting Modvat credit. The Department appealed, arguing that the refund claim was inadmissible as there was an appeal against the assessment at the manufacturer's end. The respondent contended that as the duty burden was passed on to them, they were eligible for the refund, citing relevant Tribunal decisions. The Tribunal noted that the buyer could seek a refund of duty borne, as per Section 11B and previous decisions, even without challenging the assessment order at the manufacturer's end.

The Commissioner (Appeals) highlighted the linkage between exemption under Notification No. 64/95 and the reversal of Cenvat credit on inputs used in exempted goods' manufacture. The Commissioner concluded that the appellants were eligible for a refund, subject to the reversal of Modvat credit by M/s. Essar Steel Ltd. The Tribunal concurred with the Commissioner's decision, emphasizing that the buyer need not challenge the manufacturer's assessment order in cases of refund claims. The Tribunal found no grounds to interfere with the Commissioner (Appeals)'s findings and rejected the Department's appeal, upholding the refund eligibility and quantification decision in favor of the respondent.

In conclusion, the Tribunal upheld the Commissioner (Appeals)'s order allowing the refund claim by the buyer, emphasizing the buyer's right to seek a refund of duty borne without challenging the manufacturer's assessment order. The decision highlighted the importance of timely certificate production and the linkage between exemption under Notification No. 64/95 and the reversal of Cenvat credit. The Tribunal's judgment clarified the eligibility criteria for refund claims by buyers in excise duty matters, ensuring a fair and just resolution in line with relevant legal provisions and precedents.