1987 (3) TMI 216 - AT - Central Excise

Summary

Issues:
- Rejection of substantial portions of refund claims by lower authorities.
- Bifurcation of total basic duty paid into steel ingot stage duty and steel product stage duty.
- Treatment of retained auxiliary duty by appellants as part of price realization.
- Government's policy decision on collection of steel ingot stage duty and steel product stage duty.
- Determination of value of goods under Section 4 at the time and place of removal.

Analysis:
The judgment pertains to an appeal where the appellants were aggrieved by the rejection of substantial portions of their refund claims by the lower authorities. The appellants had sold steel melting scrap and steel industrial scrap, subject to basic Central Excise duty and auxiliary duty not exceeding 20% of the value of the goods. The appellants paid auxiliary duty equal to the basic duty as the value had not been approved by the competent authority at that time. Subsequently, upon approval of values under Section 4, they filed refund claims for excess auxiliary duty paid. The lower authorities sanctioned claims for a smaller amount and rejected the rest, citing bifurcation of basic duty and treatment of retained auxiliary duty by the appellants as reasons for rejection.

The appellants, a Government of India undertaking, aimed to set fair business norms by passing on any refund received from the department to their customers. They requested time to refund excess auxiliary duty to customers in advance, intending to submit proof to the Assistant Collector for refund sanction. The department opposed the claim, citing a policy decision to collect steel ingot and product stage duties together and the inability to revise the value of goods downward based on refunds to customers. However, the Tribunal found no merit in the department's objections, emphasizing that the entire basic duty charged was the steel product stage duty, and the full product stage duty paid should be deducted from the cum-duty bill price to determine the assessable value.

The Tribunal noted that the appellants were not seeking to reduce the sale price post-removal but adjusting the auxiliary duty amount due to the ad valorem option. The appellants' willingness to refund excess duty to customers was deemed fair and lawful. The Tribunal granted three months for the appellants to refund excess duty to customers and submit proof to the Assistant Collector for recalculation and sanction of the refund amount. Consequently, the appeal was allowed in favor of the appellants, with relief granted in the specified terms.