2014 (11) TMI 308 - AT - Central Excise

Denial of refund claim - Wrong classification of goods - Held that - having promised that Assessee would produce a certificate from the Jurisdictional Superintendent that Cenvat credit has not been availed by M/s Ashok Leyland Ltd. and since the appellant has failed to do so, we cannot really find fault with the authorities below for rejecting the refund claim. It was submitted by learned counsel that the department could have verified. Having made a promise that they would produce certificate, taking a view that the department should have done it subsequently, in our opinion, is not correct. Nevertheless, in view of the fact that prima facie, we find that the appellant may be eligible for refund, we consider it appropriate that the matter should be remanded to the original adjudicating authority.

Summary

Issues:
1. Classification of goods for duty payment and refund claim.
2. Eligibility for refund based on classification and payment of duty.
3. Requirement of certificate from Range Superintendent for availing Cenvat credit.

Analysis:
1. The appellant undertakes job work on duty paid chassis supplied by a company, claiming credit of duty paid after clearing the chassis on payment of duty. The issue arose when the goods were classified under the wrong category, attracting additional duty and Edu. Cess. The appellant filed a refund claim for the duty paid during the period, which was rejected based on the wrong classification. The authorities emphasized the relationship between the assessable value and the refund claimed, questioning the eligibility of the refund due to the revision of classification. However, it was acknowledged that the Excise duty had been paid by the appellant, and the company refused to reimburse the amount, supported by a certificate from the company stating they did not avail Cenvat credit.

2. The original adjudicating authority confirmed that the goods were classifiable under a different category than initially declared. The rejection of the refund claim was primarily based on the absence of evidence regarding the assessable value. The appellate authority highlighted the importance of examining the rate of duty based on correct classification and whether the duty was received from the customer. Despite the lack of clarity on the relationship between assessable value and the refund claim, it was deemed that the appellant might be eligible for a refund, leading to the decision to remand the matter to the original adjudicating authority for fresh adjudication.

3. The requirement of a certificate from the Range Superintendent regarding the non-availment of Cenvat credit by the company was a crucial factor in determining the eligibility for the refund claim. The appellant had committed to providing this certificate but failed to do so, leading to the rejection of the claim. The appellate tribunal acknowledged that the department could have verified the information but emphasized the appellant's responsibility to fulfill the promised requirement. Despite finding potential eligibility for the refund, the tribunal decided to remand the matter to the original adjudicating authority, directing the appellant to produce the required certificate and ensuring a report is obtained from the concerned authority before passing a final order.