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2015 (3) TMI 202 - AT - Central ExciseArea based exemption - Refund - Benefits under exemption Notification No. 56/2002-CE dated 14.11.2002 - refund of central excise duty of the said amount remitted, in excess of the duty liability, by including the value of outward freight incurred on fungicides, herbicides, insecticides, PGR etc. manufactured by it - Inclusion of ineligible freight - Additional Commissioner dropped the proceedings by recording the finding that purchase orders do not mention freight separately from the purchase value; these orders were on FOR basis; and in particular, there was no evidence to establish that the value of freight was charged separately from buyers of the final products manufactured by the assessee. Held that - Following decision of Hard Castle Petrofer Pvt. Ltd. vs. C.C.E. & S.T. 2014 (4) TMI 336 - CESTAT NEW DELHI , Ultimate Flexipack Lted. Vs. C.C.E.& S.T., J & K 2014 (4) TMI 654 - CESTAT NEW DELHI and First Flexipack Corporation vs. C.C.E. & S.T., J & K 2014 (12) TMI 839 - CESTAT NEW DELHI - where an assessee was required to pay duty on FOR price which would include the element of freight from the factory gate to the customers premises, the provisions of Section 4(3)(c) would apply, to identify the place of removal as the place of delivery to the customer s place on FOR price of the transaction. - Excise duty remitted by the assessee was in accordance with law and legally entitled to refund of such duty remitted, under provisions of Notification No.56/2002-CE. The primary order passed by the Additional Commissioner is therefore impeccable and the impugned order passed by the ld. Commissioner (Appeals) is flawed and unsustainable - Decided in favour of assesse.
Issues involved:
Appeal against Commissioner (Appeals) order, Exemption Notification No. 56/2002-CE, Refund of central excise duty, Inclusion of freight in value of finished goods, Legal entitlement to duty refund. Analysis: 1. Appeal against Commissioner (Appeals) order: The appeal was filed against the order dated 11.7.2013 passed by the Commissioner (Appeals), Chandigarh. The Tribunal decided to waive the pre-deposit and take up the substantive appeal since the issue was agreed to be covered by the Tribunal's decision in favor of the assessee. The Tribunal disposed of the appeal after considering the stay application. 2. Exemption Notification No. 56/2002-CE: The proceedings were initiated against the appellant-assessee based on a show cause notice dated 24.4.2012 for recovery of a specific amount. The appellant had availed benefits under exemption Notification No. 56/2002-CE and sought a refund of central excise duty remitted in excess of the duty liability. The issue revolved around the inclusion of ineligible freight in the value of finished goods and the alleged irregular remittance of excise duty from the PLA account. 3. Refund of central excise duty: After due process, the Additional Commissioner dropped the proceedings, noting that there was no evidence to establish that the value of freight was charged separately from buyers of the final products manufactured by the assessee. The Tribunal referred to previous judgments to establish that the Excise duty remitted by the assessee was in accordance with the law and the assessee was legally entitled to a refund under the provisions of Notification No. 56/2002-CE. 4. Inclusion of freight in value of finished goods: The appellate Commissioner allowed the appeal preferred by Revenue without analyzing the transactional documents or considering whether freight was separately charged by the assessee. The Tribunal criticized this approach, emphasizing the importance of a rational nexus between facts and conclusions. The Tribunal concluded that the primary order passed by the Additional Commissioner was impeccable, and the order passed by the appellate Commissioner was flawed and unsustainable. 5. Legal entitlement to duty refund: Based on the Tribunal's analysis of previous decisions and the applicable legal regime, it was determined that the assessee was legally entitled to the refund of duty remitted. Consequently, the Tribunal allowed the appeal, quashed the impugned order passed by the appellate Commissioner, and restored the order passed by the Additional Commissioner, Customs & Central Excise, J & K. No costs were awarded in this matter.
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