2024 (2) TMI 434 - AT - Central Excise

Refund of excess central excise duty than due - order crediting the sum to Consumer Welfare Fund not passed - HELD THAT - It is found from the provisions of sub-section (2) of Section 11B of CEA that there are only two options with the Assistant/Deputy Commissioner if he/she finds that the refund is due, then either to credit the said sum to Consumer Welfare Fund or pay it to the assessee, i.e. the claimant. It is noted that the learned Assistant/Deputy Commissioner has not passed an order crediting the said sum to Consumer Welfare Fund. Therefore, the only option left under the said provision of the Act is to pay the same to the claimant. Since Revenue has rejected refund claim after finding that the said sum was paid in excess of due, it is noted that there is no such provision in Section 11B to reject the claim of refund when it is found that the duty paid is in excess of due duty and, therefore, the impugned order is erroneous - in the present case, since the sum was not credited to the Consumer Welfare Fund, under the said provisions of Section 11B ibid, the only other option is to pay the same to the claimant who is presently the appellant in this case. The Assistant/Deputy Commissioner of Central Excise, Chandrapur Division, is directed to pay refund of the claimed amount to the appellant within a period of 30 days from the date of submission of a certified copy of this order by the appellant to the said Assistant/Deputy Commissioner - appeal allowed.

Summary

Issues involved:
The issues involved in this case are the refund of excess central excise duty paid on coal due to a price rollback by Coal India Ltd., rejection of the refund claim by the original authority under Section 11B of the Central Excise Act, 1944, and the appeal filed by the appellant challenging the rejection.

Refund Claim and Rejection:
The appellant, a Public Sector Undertaking engaged in mining coal, paid excess central excise duty during a period when Coal India Ltd. enhanced coal prices and later rolled back the enhancement. The appellant filed a claim for refund of Rs.20,82,895/-, stating that they had overpaid the central excise duty. The original authority rejected the refund claim under Section 11B of the Central Excise Act, 1944, leading to the appellant's appeal before the learned Commissioner (Appeals). The Commissioner upheld the original authority's decision, prompting the appellant to approach the Tribunal.

Appellant's Argument for Refund:
The appellant's counsel argued that similar circumstances were faced by another subsidiary of Coal India Ltd., South Eastern Coalfields Ltd., where a refund was sanctioned by the authorities. Citing previous tribunal orders, the appellant contended that they were also entitled to a refund as they had overpaid central excise duty.

Revenue's Response and Tribunal's Analysis:
The Revenue's representative acknowledged that the rejection of the claim by the original authority was not sustainable. Upon reviewing the case and relevant provisions of Section 11B of the Central Excise Act, 1944, the Tribunal noted that the original authority had found the appellant had paid excess central excise duty. However, the authority had failed to credit the excess amount to the Consumer Welfare Fund as required by the Act. The Tribunal concluded that since the amount was not credited to the Fund, the only option was to refund it to the appellant. Therefore, the Tribunal set aside the impugned order and directed the Assistant/Deputy Commissioner to pay the refund amount to the appellant within 30 days.

Conclusion:
The Tribunal allowed the appeal in favor of the appellant, directing the refund of the claimed amount of excess central excise duty. The order was pronounced in the open court on 08.02.2024.