2005 (12) TMI 158 - AT - Central Excise

Summary

Issues:
1. Refund claim for the differential duty between the rate applicable to free sale sugar and levy sugar.
2. Clarification on the duty payment based on the classification of sugar as levy or free sale.
3. Interpretation of the duty payment regulations in the case of sugar clearance.

Analysis:
1. The appellant cleared sugar at the free sale rate but later, upon clarification that it should be treated as levy sugar, filed a refund claim for the differential duty. The Revenue contended that duty should have been paid at the levy rate upon receiving the intimation. The Tribunal found that duty is applicable at the time of clearance, and since the duty burden was borne by the appellants, they are entitled to the refund. Citing a similar Tribunal decision, the refund was allowed, overturning the Commissioner (Appeals) order.

2. The factory had to clear sugar at the rate applicable to levy or free sale sugar based on the Directorate of Sugar's decision. The appellants cleared the disputed quantity from free sale sugar initially but later sought a refund based on the levy rate clarification. The affidavit confirmed that duty was paid at the levy rate to the Co-operative Federation, indicating that the duty burden was on the appellants. The Tribunal's decision emphasized that duty is determined at the time of clearance, leading to the allowance of the refund claim.

3. The appellants' refund claim was rejected initially as they had admitted that the Government purchased the sugar from free sale sugar for P.D.S. and later decided to take it as a loan. However, the subsequent clarification and actions by the Food Ministry indicated that adjustments should have been made in the records instead of seeking a refund. The Tribunal, considering the duty payment regulations and the circumstances of the case, concluded that the duty burden fell on the appellants, justifying the refund for the differential duty amount.

This judgment highlights the importance of clarity in duty payment regulations, the timing of duty determination, and the responsibility for duty payment in cases of sugar clearance under different classifications.