2004 (2) TMI 224 - AT - Central Excise

Summary

Issues:
1. Whether the respondent assessee can claim a refund of duty based on a Supreme Court decision.
2. Whether the respondent-assessees can claim a refund without challenging the levy of central excise duty.
3. Whether the activities of the respondent-assessees being controlled by the same Corporation entitle them to claim the refund.

Analysis:
1. The issue raised in the appeals was whether the respondent assessee could claim a refund of duty paid based on a Supreme Court decision. The Commissioner (Appeals) allowed the refund application, citing the Supreme Court's decision that the process of separating asbestos fiber from rock is not a manufacturing process. The Assistant Commissioner rejected the refund application based on limitation under Section 11B of the Central Excise Act, 1944, and the fact that the assessee was not a party to the Supreme Court judgment. The Commissioner (Appeals) relied on a protest letter submitted by the assessee to support the claim for refund.

2. The main contention raised by the appellant Revenue was that the respondent-assessees could not claim a refund without challenging the levy of central excise duty. The Revenue relied on Supreme Court decisions in Mafatlal Industries Ltd. v. Union of India and CCE, Kanpur v. Flock (India) Pvt. Ltd. to support their argument. The respondent-assessees argued that their activities, even after taking over mining operations, were controlled by the same Corporation, entitling them to benefit from the Supreme Court decision in favor of the Corporation.

3. The Tribunal found no merit in the respondent's contention. The Tribunal highlighted that the Corporation had filed a civil appeal before the Supreme Court as a manufacturer challenging duty demands against them, while the respondent had paid duty as manufacturers based on a demand made against them. Referring to the Supreme Court's observations in Mafatlal Industries Ltd. v. Union of India, the Tribunal emphasized that unless the demand against the respondent was challenged before the appropriate authority, they could not claim a refund, even if the duty was paid under protest. The Tribunal set aside the Commissioner (Appeals) order, stating that an application for refund cannot be equated to an appeal challenging the duty demand, and allowed the appeals filed by the Revenue.