2010 (3) TMI 593 - HC - Central Excise

Refund of excess duty paid consignment sale valuation - Tribunal dismissed the appeal of the assessee mainly on the ground that it did not file any appeal against the finalization of provisional assessment - An inter-departmental letter written by the Assistant Commissioner to Superintendent - No formal expression of an adjudication of the real controversy between the parties - Held that there is no formal expression of an adjudication of the real controversy between the parties in the aforesaid letters. The interdepartmental letters dated 5-3-1997 and 5-5-1997 written in the absence of the parties cannot possibly be termed as legal orders, against which, the assessee was required to file appeal. Therefore, we are of the view that the Tribunal has fell in legal error in dismissing the appeal of the assessee in this respect on the ground of its maintainability matter restored before the tribunal

Summary

Issues: Refund claim for excess duty paid on consignment sales; Maintainability of appeal due to failure to challenge provisional assessment orders; Legal error in dismissing appeal on technical grounds.

Refund Claim for Excess Duty Paid on Consignment Sales:
The appellant, engaged in manufacturing M. S. Tubes/Pipes, filed a refund claim for the period from 1-4-1996 to 27-9-1996, asserting that they had paid excess duty on consignment sales price not payable under Section 4(1)(a) of the Central Excise Act, 1944. The duty was contended to be payable on the normal value ascertainable at the factory gate, not on the consignment agent's sale price. The Assistant Commissioner initially rejected the claim, but it was later sanctioned by the Central Excise Division. However, the Revenue appealed and succeeded in ordering the recovery of the refunded amount under Section 11A of the Act.

Maintainability of Appeal Due to Failure to Challenge Provisional Assessment Orders:
The Tribunal dismissed the appellant's appeal on the grounds that they did not challenge the finalization of provisional assessments in 1997. The appellant argued that the inter-departmental letters from 5-3-1997 and 5-5-1997 could not be considered formal assessment orders requiring an appeal. The High Court found that the Tribunal erred in dismissing the appeal on maintainability grounds, as the letters did not represent a formal adjudication of the controversy between the parties.

Legal Error in Dismissing Appeal on Technical Grounds:
The High Court held that the Tribunal's dismissal of the appeal on technical grounds was erroneous. The letters from 1997 did not constitute formal assessment orders necessitating an appeal. The Court emphasized that the Tribunal should have addressed the substantive merits of the refund claim instead of focusing on procedural technicalities. Consequently, the High Court accepted the appeal, set aside the impugned order, and remitted the matter back to the Tribunal for a fresh decision on the merits in accordance with the law.