1996 (10) TMI 192 - AT - Central Excise

Summary

Issues:
1. Refund claim rejection based on limitation and other grounds.
2. Interpretation of Sections 11A and 11B of the Central Excise Act, 1944.
3. Validity of refund claim on duty paid on freight element.
4. Applicability of approved price lists on refund claims.
5. Inclusion of freight charges in assessable value.

Analysis:

The appeals before the Appellate Tribunal CEGAT, New Delhi involved challenging the rejection of a refund claim by the Collector of Central Excise (Appeals) for duty paid on the freight element by the appellants, who were engaged in soap and OSA manufacturing. The dispute centered around the period from 1-6-1979 to 31-5-1983, with the appellants filing a refund claim on 23-6-1983. The Collector (Appeals) partially allowed the claim, setting aside the rejection for the period within six months prior to the filing of the refund claim. However, the rejection for duty paid earlier was upheld, leading to two separate appeals - E/1498/87-A and E/3700/89-A.

The main contention revolved around the limitation period for refund claims under Section 11B of the Central Excise Act, 1944. The appellants focused their claim on duty paid within six months before the refund claim filing. The authorities rejected the claim citing finality of approved price lists and non-protest of duty payment. However, it was argued that the payment under protest was only relevant to the limitation issue and did not impact the merits of the claim as per Section 11B.

The Tribunal delved into the interpretation of Sections 11A and 11B, emphasizing that Section 11B provides the right for an assessee to claim a refund without additional restrictions beyond the specified time limit. Citing the High Court of Calcutta and Supreme Court decisions, the Tribunal rejected the notion that final approval of price lists or non-protest of duty payment could bar a refund claim under Section 11B. It was established that an assessee could claim a refund if excess duty had been paid, irrespective of the approval status of price lists.

Furthermore, the Tribunal addressed the issue of freight charges, highlighting that such charges should not be included in the assessable value. However, the lower authorities failed to examine whether the freight collected solely pertained to external transportation or included internal movement charges, leading to the rejection of the claim on this ground.

Consequently, the Tribunal dismissed Appeal E/1498/87-A due to the abandonment of the limitation contention. In contrast, Appeal E/3700/89-A was allowed, setting aside the previous orders and remanding the matter to the Assistant Commissioner for a fresh decision within four months, emphasizing the entitlement of the appellants to a refund if their claim is valid under Section 11B.