1999 (11) TMI 253 - AT - Central Excise

Summary

Issues: Refund claim for handloom cess paid under protest, interpretation of exemption notification, applicability of Khadi and Other Handloom Industries Development Act, 1953, burden of proof for double payment of cess, admissibility of refund claim, onus of establishing double payment.

In this case, the appellants filed a refund claim for handloom cess paid under protest, amounting to approximately Rs. 13.20 lakhs for the period between 1-3-1986 to 18-3-1990. They argued that unprocessed cotton cloth received by them had already borne the burden of handloom cess. The Assistant Collector initially rejected the claim, leading to multiple appeals and remands. The Commissioner (Appeals) directed a de novo decision considering the Khadi and Other Handloom Industries Development Act, 1953, and any relevant exemption notifications. The Assistant Collector rejected the claim again on the grounds of time bar and lack of evidence proving double payment of cess. The Commissioner (Appeals) supported this decision, emphasizing that fabrics exempt from excise duties were also exempt from cess during the relevant period under specific notifications. The appellants' argument that the unprocessed fabrics corresponded to excluded varieties was dismissed as they failed to prove receipt from a composite mill. The Commissioner (Appeals) upheld the rejection of the refund claim, citing precedents and specific legal provisions.

Upon further review, the appellate tribunal found that the appellants' claim solely relied on the liability of unprocessed cotton fabrics to cess, asserting that the liability should have been discharged by the grey cloth manufacturer. However, the tribunal emphasized that merely stating this was insufficient to establish a double payment of cess required for a refund. As the appellants failed to substantiate their case adequately, the tribunal agreed with the lower appellate authority's decision to reject the refund claim. Consequently, the tribunal upheld the findings of the Commissioner (Appeals) and dismissed the appeal, emphasizing the importance of meeting the burden of proof for claiming a refund and demonstrating double payment of cess on the same materials.