2024 (3) TMI 1226 - AT - Central Excise

Refund of duty paid in excess - Admitted tax or not - Valuation - freight from the factory of the appellant to the destination (customer s premises) has to be added to the assessable value or not - place of removal - period 2014-15 April 2015 May 2015 and 1.6.2015 to 8.6.2015 - HELD THAT - It is found that so far the fact of the not including freight in Assessable value is concerned the same were not disputed by Revenue in the ROM Application. What was disputed by Revenue was that the said amount has been paid by way of admitted tax or self assessed tax and hence it was not refundable unless the order of self assessment was modified in accordance with law. The said amount of Rs.4, 22, 85, 418/- does not form part of the self assessed tax or admitted tax of the appellant/assessee and accordingly allowing the appeal of the assessee it is held that they are entitled to refund of the said amount with interest as per Rules - appeal allowed.

Summary

Issues Involved:
1. Refund of amount deposited by the appellant.
2. Inclusion of freight in the assessable value.
3. Applicability of Section 11A and 11B of the Central Excise Act.
4. Applicability of the Supreme Court judgment in the ITC Ltd case.

Summary:

1. Refund of Amount Deposited:
The appellant, a manufacturer of cement, sought a refund of Rs.4,22,85,418/- deposited for the period from April 2014 to June 2015. The Tribunal noted that the amounts were not paid in the normal course of self-assessment and were not reflected in the ER-1 returns but were paid as differential duty of excise through challans after being pointed out by the department. Since no show-cause notice u/s 11A was issued to recover the differential duty, the amounts in dispute were considered deposits and not duty. Therefore, the limitation prescribed u/s 11B for refund did not apply.

2. Inclusion of Freight in Assessable Value:
The issue was whether the freight from the factory to the customer's premises should be added to the assessable value. The Tribunal referenced its own previous decision in the appellant's case, which held that the amount of freight to the buyer's premises is not includible in the assessable value. Thus, the Tribunal concluded that the amount paid by the appellant was not their duty liability.

3. Applicability of Section 11A and 11B:
The Tribunal emphasized that for any differential amount of duty to be recovered, a notice u/s 11A must be issued. Since no such notice was issued, the amounts paid could only be considered deposits. Consequently, the limitation period u/s 11B for claiming a refund did not apply to this case.

4. Applicability of Supreme Court Judgment in ITC Ltd:
The Revenue argued that the appellant should have first questioned the self-assessment under ER-1 and only then filed for a refund, as held in the ITC Ltd case. However, the Tribunal found that the amounts were not part of self-assessed tax or admitted tax, as they were not included in the assessable value at the time of clearance nor reflected in the ER-1 returns as self-assessed duty. Therefore, the ITC Ltd ruling was not applicable in this case.

Conclusion:
The Tribunal allowed the appeal, holding that the amount of Rs.4,22,85,418/- does not form part of the self-assessed tax or admitted tax and thus, the appellant is entitled to a refund of the said amount with interest as per Rules.