2016 (8) TMI 489 - AT - Central Excise

Refund claim - rejected on the ground that assessment order/determination of annual capacity of production was not challenged before the appropriate forumduty paid under protest - inclusion of gallery in the length of chambers for determination of annual production capacity - Held that - the issue is no more res integra and is squarely covered by the judgment of jurisdictional Hon ble Gujarat High Court in the case of Premraj Dyeing & Printing Mills Pvt. Ltd Vs UoI 2013 (6) TMI 118 - GUJARAT HIGH COURT . Therefore by applying the same for allowing refund of duty paid under protest by the Appellant consequent to the Order pertaining to determination of annual capacity of production by inclusion of length of gallery the said Order need not be separately appealed. - Decided against the Revenue

Summary

Issues:
- Appeal against OIA No.RKA/381/SRT-I/08
- Inclusion of gallery in annual production capacity determination
- Refund claim rejection based on non-challenge of assessment order
- Applicability of judgment in Premraj Dyeing & Printing Mills Pvt. Ltd case

Analysis:
1. Appeal against OIA No.RKA/381/SRT-I/08:
The appellant, engaged in manufacturing processed fabrics, disputed the inclusion of the gallery in the annual production capacity determination. The duty was paid under protest, leading to a refund claim rejection based on the non-challenge of the assessment order. The Commissioner (Appeals) allowed the appeal, prompting the Revenue to file an appeal. The issue was decided in favor of the appellant, citing the incorrect inclusion of the gallery in the length of chambers, as per the Larger Bench of the Tribunal and the Supreme Court's approval.

2. Inclusion of gallery in annual production capacity determination:
The appellant's contention centered on the erroneous inclusion of the gallery in the determination of annual production capacity. The dispute arose due to the inclusion of the gallery in the length of chambers, which was deemed incorrect as per the judicial precedents. The appellant filed a refund claim as the duty was paid under protest, highlighting the discrepancy in the determination process. The judgment emphasized that the inclusion of the gallery was unwarranted, leading to the refund claim's validity.

3. Refund claim rejection based on non-challenge of assessment order:
The refund claim rejection was primarily based on the failure to challenge the assessment order or the determination of annual production capacity before the appropriate forum. However, the judgment highlighted that the non-appealability of the determination did not preclude the appellant from claiming a refund of erroneously collected duty. The Hon'ble Gujarat High Court's decision in a similar case supported the appellant's right to file refund claims despite not challenging the initial determination.

4. Applicability of judgment in Premraj Dyeing & Printing Mills Pvt. Ltd case:
The judgment in the Premraj Dyeing & Printing Mills Pvt. Ltd case was crucial in establishing the appellant's entitlement to the refund claim. The High Court's observation emphasized that the excise authorities erred in rejecting the claims solely on the grounds of non-challenge to the determination of annual production capacity. The judgment clarified that the non-appealability of the determination did not hinder the appellant's right to seek a refund based on the erroneous inclusion of the gallery in the capacity calculation.

In conclusion, the appellate tribunal upheld the appellant's right to claim a refund for duty paid under protest due to the incorrect inclusion of the gallery in the annual production capacity determination. The judgment reinforced the principle that non-appealable determinations do not bar the manufacturer from seeking refunds of erroneously collected duties.