2014 (4) TMI 181 - AT - Central Excise

Denial of refund claim - whether the appellant herein is eligible for refund of the so-called excess duty paid by M/s. Nirman Pharma - Held that - M/s. Nirman Pharma has assessed the Physician s Samples cleared by them and the said assessment of duty liability is discharged by M/s. Nirman Pharma as a manufacturer of excisable goods. In my view, the assessment which is not challenged by manufacturer after discharge of Central Excise duty cannot be challenged by the recipient of such products. Undoubtedly the appellant could have claimed refund of the amount of excess Central Excise Duty paid by M/s. Nirman Pharma provided the said Nirman Pharma had contested the duty liability under Section 4A of the Central Excise Act, 1944, on Physicians Samples, before the lower authority. I find that the impugned orders of the lower authorities rejecting the refund claims though on different reasons, needs to be upheld - Decided against assessee.

Summary

Issues:
- Applicability of Section 4A vs. Section 4 of the Central Excise Act, 1944 for valuation of excisable goods.
- Eligibility of the appellant for refund of excess Central Excise duty paid by the manufacturer.

Analysis:

Issue 1: Applicability of Section 4A vs. Section 4 of the Central Excise Act, 1944 for valuation of excisable goods:
The appellant claimed refund of Excise Duty paid by the manufacturer under Section 4A, arguing that Section 4A is not applicable to Physician's Samples and Section 4 should apply. The appellant relied on a Tribunal decision upheld by the Apex Court, arguing that transactional value should be the assessable value for Physician's Samples cleared on transaction value. However, the lower authorities relied on a Board Circular and a High Court decision. The Tribunal found that the manufacturer had discharged duty liability on the Physician's Samples based on pro rata value of the sales pack, which was not disputed. The Tribunal held that the manufacturer's assessment under Section 4A, which was not challenged by the manufacturer, cannot be challenged by the recipient. Therefore, the Tribunal upheld the impugned orders rejecting the refund claims, as the appellant was not eligible for refund of the excess duty paid by the manufacturer.

Issue 2: Eligibility of the appellant for refund of excess Central Excise duty paid by the manufacturer:
The primary question was whether the appellant could claim the excess duty paid by the manufacturer. The Tribunal concluded that since the manufacturer had assessed and discharged duty liability on the Physician's Samples, which was not challenged, the recipient could not claim a refund of the excess duty paid. The Tribunal emphasized that the appellant could only claim a refund if the manufacturer had contested the duty liability before the lower authority. Therefore, the Tribunal found that the impugned order was correct and legal, upholding the rejection of the refund claims.

In conclusion, the Tribunal determined that the appellant was not eligible for a refund of the excess Central Excise duty paid by the manufacturer, as the manufacturer's assessment under Section 4A was not challenged, and the duty liability was properly discharged. The Tribunal emphasized the importance of challenging duty assessments before claiming refunds, ultimately upholding the lower authorities' decisions.