2014 (5) TMI 375 - AT - Central Excise

Denial of refund claim - CENVAT Credit - Held that - Applicants availed credit in respect of the lubricating oil and the same was used thereafter the same is cleared from the factory without payment of duty. The appellant paid the duty at the asking of the Revenue. The assessment regarding the demand is not challenge by the appellants. The appellants challenge the demand by way of filing the refund claim. The Hon ble Supreme Court in the case Collector of Central Excise, Kanpur Vs. Flock India Ltd. 2000 (8) TMI 88 - SUPREME COURT OF INDIA held that in the absence of challenge to the assessment order the refund is not maintainable. In the present case, as the appellants are challenging excisability of the goods which were cleared without payment of duty. In the refund application which is not permissible - Decided against assessee.

Summary

Issues Involved:
Refund claim rejection for cleared used Lubricating Oil without payment of duty.

Detailed Analysis:
The appellant filed an appeal against the rejection of a refund claim of Rs.16,350 for clearing used Lubricating Oil without duty payment. The revenue claimed that the appellant paid the amount under protest and filed a refund claim. The show cause notice was issued, and the adjudicating authority rejected the refund, which was upheld by the Commissioner (Appeals).

The appellant argued that the used lubricating oil is not a manufactured or marketable product, citing Supreme Court decisions regarding similar cases. On the other hand, the revenue contended that since the duty was paid by the appellant and not challenged in the assessment order, challenging the dutiability in the refund claim is not permissible. The revenue also argued that even waste and scrap generated during manufacturing are liable for duty.

The tribunal found that the appellant availed credit for the lubricating oil, used it, and then cleared it without duty payment as requested by the revenue. The assessment demand was not challenged by the appellant, who only contested it through the refund claim. Referring to a Supreme Court case, the tribunal held that challenging the excisability of goods cleared without duty payment in a refund claim is impermissible. Therefore, the appeal was dismissed.

This judgment highlights the importance of challenging assessment orders directly and not using refund claims to dispute the dutiability of goods cleared without payment. The tribunal emphasized that availing credit and subsequently clearing goods without duty payment does not entitle the appellant to challenge the assessment through a refund claim.