1997 (3) TMI 175 - AT - Central Excise

Summary

Issues:
1. Proper determination of assessable value for excise duty calculation.
2. Validity of the refund granted by the Assistant Collector.
3. Jurisdiction of the Collector (Appeals) in the recovery of excess refund.

Analysis:

Issue 1: Proper determination of assessable value for excise duty calculation
The case involved the manufacturing of office machines and parts falling under specific tariff items. Initially, the Assistant Collector approved price lists based on the prices at which the distributors were selling the products. After a successful challenge before the Tribunal, the case was remanded to the Assistant Collector. The Assistant Collector then determined that the prices at which the appellant was selling products to the distributors would be considered the normal price. However, goods had already been cleared at a higher assessable value, leading to the filing of refund claims for excess duty paid. The Assistant Collector sanctioned a refund, but the Collector of Central Excise reviewed the order and directed recovery of the excess refunded amount.

Issue 2: Validity of the refund granted by the Assistant Collector
The Department challenged the order of the Collector (Appeals) dismissing the appeal on the grounds of maintainability. The Tribunal noted that the refund was granted based on the appellant's undertaking to pass on the benefit to buyers. However, when the appellant later informed the Assistant Collector that the benefit could not be passed on, the refund amount remained with the appellant. The Tribunal opined that this amount should have been considered in redetermining the assessable value and excise duty payable, which required a fresh show cause notice for redetermination.

Issue 3: Jurisdiction of the Collector (Appeals) in the recovery of excess refund
The Tribunal found that the Collector of Central Excise misdirected himself by directing the appellant to approach the Collector (Appeals) for recovery without establishing the illegality or impropriety of the refund order. The authorization under the Central Excise Act did not show any legal or procedural issues with the refund order. Therefore, the Tribunal concluded that the Collector could not have directed the Assistant Collector to apply to the Collector (Appeals) for recovery. The dismissal of the appeal challenging the Collector (Appeals)'s decision was deemed justified.

In conclusion, the Tribunal dismissed the appeal and cross-objection, emphasizing the need for proper redetermination of assessable value and the correct excise duty payable, as well as clarifying the jurisdictional boundaries of the Collector (Appeals) in cases of refund recovery.