2004 (4) TMI 136 - AT - Central Excise

Summary

Issues involved:
The appeal involves the rejection of refund claims by the original authority under Section 11B of the Central Excise Act, pertaining to duty equivalent to outstanding unutilised credit on inputs under the compounded levy scheme.

Summary:
The appellants, manufacturers of fabrics, had outstanding unutilised credit on inputs prior to 16-12-1998, which they were unable to use for duty payment under the compounded levy scheme. They filed refund claims under Section 11B, which were rejected by the original authority and upheld by the first appellate authority. The main ground of appeal was that the refund claims should have been sanctioned under the proviso to sub-section (2) of Section 11B, allowing cash refund of duty paid on inputs used in final products. The Tribunal found the law explicit in enabling manufacturers to claim such refunds and cited a relevant case supporting the appellants' position. The matter was remanded to the original authority for re-examination based on the applicable provision of law.

In conclusion, the orders of the lower authorities were set aside, and the appeal was allowed with directions for the original authority to reevaluate the case in light of the relevant legal provisions. The appellants were to be given a reasonable opportunity to present their case.