1999 (4) TMI 217 - AT - Central Excise

Summary

Issues: Refund of duty under Notification No. 175/86-C.E.

Detailed Analysis:
1. Issue of Refund Claims Rejection: The appellants, manufacturers of ACSR Weasel Conductor, supplied conductors to UPSEB on behalf of two customers from Bangalore. Initially, full duty was paid by the appellants, but upon realizing that duty was not chargeable due to availing the benefit of Notification 175/86-C.E., credit notes were issued to the customers, and refund claims were filed. The Assistant Collector rejected the refund claims citing lack of information on the eligibility of Bangalore parties for SSI benefit under the notification, leading to the rejection of the claims by lower appellate authorities.

2. Appellants' Argument: The learned Advocate for the appellants argued that the appellants manufactured the cables for themselves and not on behalf of the Bangalore customers. The goods were sent directly to UPSEB as per the customers' directions, indicating that the goods were not cleared on behalf of the Bangalore parties. It was contended that the benefit of the notification was wrongly denied, and thus, the refunds were wrongly rejected, seeking allowance of the appeals.

3. Revenue's Position: The Revenue, represented by Shri R.D. Negi, supported the lower authorities' findings, maintaining the stance taken in rejecting the refund claims.

4. Tribunal's Decision: After considering both sides' arguments, the Tribunal agreed with the appellants' submission. It was held that the goods were manufactured independently by the appellants and not on behalf of the Bangalore parties. As a result, the denial of the exemption under Notification No. 175/86-C.E. was deemed unjustified. The appellants were found entitled to the benefit of the duty refund, subject to ensuring that the duty burden was not passed on to their customers. The appeals were allowed, the impugned order was set aside, and verification by the authorities below was directed for further proceedings.