2017 (12) TMI 1083 - AT - Central Excise

Refund claim - goods cleared after payment of duty, was subsequently banned - Held that - it is an admitted fact that the goods were cleared after paying the excise duty. The goods were meant exclusively for the purpose of export. Due to legal ban as per the directions of the Hon ble Supreme Court everybody becomes helpless and finally the goods have become non-marketable. The assessee-Respondents have suffered a loss due to the ban. The Commissioner (Appeals) has rightly order to refund the claim of the duty which was paid by the assessee-Respondents - appeal dismissed - decided against Revenue.

Summary

Issues Involved:
1. Refund claim of duty paid by assessee-Respondents for goods seized after legal ban on plastic packaging.
2. Entitlement of rebate for goods cleared for export but seized before export.
3. Decision on refund claim by Commissioner (Appeals) and appeal by the Department.

Analysis:
1. The appeal was filed by the Department against the Order-in-Appeal passed by the Commissioner (Appeals) Central Excise, Delhi-I, concerning the period from 01.04.2011 to 05.09.2011. The case involved the manufacture of Pan Masala containing Chewing Tobacco known as 'Gutkha'. The Hon'ble Supreme Court had banned the use of plastic for packing such products from 01.03.2011. The assessee-Respondents had requested to seal the factory on 28.02.2011, but later, it was decided that plastic could be used for export. However, the Plastic Waste Rules banned plastic even for export, leading to the seizure of goods in air cargo on 03.09.2011, with a redemption fine imposed.

2. The undisputed fact was that the goods were cleared for export after paying duty, making the assessee-Respondents entitled to a rebate. However, the goods became non-marketable due to the legal ban, rendering them unsellable both domestically and for export even after paying the redemption fine. The Commissioner (Appeals) allowed the refund claim, leading to the Department's appeal.

3. The Tribunal noted that the goods were cleared after paying excise duty exclusively for export purposes. The legal ban made the goods non-marketable, causing losses to the assessee-Respondents. In light of these circumstances, the Tribunal upheld the Commissioner (Appeals) decision to refund the duty paid by the assessee-Respondents. Consequently, the appeal filed by the Department was dismissed, affirming the refund order.

In conclusion, the Tribunal upheld the refund claim of duty paid by the assessee-Respondents for goods seized after the legal ban on plastic packaging, emphasizing the non-marketable nature of the goods due to the ban. The decision highlighted the entitlement of rebate for goods cleared for export but seized before export, ultimately sustaining the Commissioner (Appeals) order and dismissing the Department's appeal.