1987 (6) TMI 192 - AT - Central Excise

Summary

Issues:
Claim for refund of duty on electric motors under Notification No. 71/78-C.E. - Rejection of claim by Assistant Collector - Denial of refund on the grounds of already paid duty - Appeal before Collector of Central Excise (Appeals) - Dispute regarding denial of refund - Interpretation of Central Excise Law - Exemption denial leading to duty payment under protest - Compulsion to pay duty - Claim for refund under protest - Authority to deny refunds - Double payment by the exchequer - Legal right to refund.

Analysis:
1. The case involves a claim for a refund of duty on electric motors by M/s. Johnston Pumps (India) Ltd. under Notification No. 71/78-C.E. The Assistant Collector rejected the claim citing that the party should have availed the cash concession at the time of clearances and that any duty paid on goods exempted from duty cannot be refunded. The Assistant Collector concluded that the duty had already been charged when the goods were sold to government buyers, hence denying the refund.

2. The Collector of Central Excise (Appeals) overturned the Assistant Collector's decision, stating that there was no provision in the Central Excise Law to deny refunds based on the grounds provided by the Assistant Collector. The Collector highlighted that the appellants paid duty under protest due to the delay caused by verification of their classification list, which was not considered by the Assistant Collector.

3. The appeal before the Tribunal lacked detailed facts but raised concerns about double payment by the exchequer. However, the crux of the matter was the compulsion faced by the party to pay duty under protest as they were denied the exemption. The dispute centered on the legal right to claim a refund of duty paid in excess, not on the exchequer's alleged double payment to the manufacturer.

4. The Tribunal emphasized that the payment of duty was a result of compulsion, as the party had no choice but to clear the goods by paying duty. Denying the refund based on the premise that duty was recovered from customers would be unjust, as it was the Assistant Collector's actions that led to the duty payment under protest. The Tribunal held that the denial of the refund would be unfair and that the law supported the payment of the refund to the party.

5. In conclusion, the Tribunal ruled in favor of the appellants, ordering that the refund of duty on electric motors be paid. The decision was based on the legal right of the party to claim a refund of duty paid under protest due to the denial of the exemption, emphasizing the unjust nature of denying the refund under the circumstances.