2019 (10) TMI 584 - AT - Central Excise

Refund claim - duty paid for its export of goods to Bhutan - refund rejected on the ground that exports to Bhutan are specifically governed by Notification No. 45/2001 which required exports to be made only on payment of appropriate Excise Duty - HELD THAT - I find from the Order-in-Original as well as the impugned Order-in-Appeal that the Revenue has nowhere disputed this aspect, i.e., the appellant did make the export after paying the appropriate Excise Duty and it was this duty which was claimed as refund under Rule 18 ibid. It is very clear from the above that a refund would include rebate as well, the claim for which has to be only under Section 11B. In the case on hand, there is no dispute on these aspects. However, the dispute is on the applicability of N/N. 45/2001 and the non-following of the procedure by the appellant. The appellant is entitled to the refund as claimed and the rejection of the same is not in order - Appeal allowed.

Summary

Issues:
1. Rejection of refund claim for duty paid on export of goods to Bhutan.
2. Applicability of Notification No. 45/2001-C.E.(N.T.) dated 26.06.2001.
3. Interpretation of Rule 18 of the Central Excise Rules, 2002.
4. Eligibility of the appellant for refund under Section 11B.
5. Justifiability of denying the refund.
6. Applicability of the decision of the jurisdictional High Court.

Analysis:

1. The appellant, a Central Excise registration holder, sought a refund of duty paid for exporting goods to Bhutan. The Revenue contended that the duty was correctly paid, citing Notification No. 45/2001. The Adjudicating Authority rejected the refund claim, stating that exports to Bhutan require duty payment as per the agreement between India and Bhutan. The First Appellate Authority and the Commissioner upheld the rejection, leading to the present appeal.

2. During the hearing, the main issue was whether the rejection of the refund claim was justified. The appellant's claim was made under Rule 18 of the Central Excise Rules, as the export was done after paying the duty. The Revenue did not dispute this fact. The dispute centered around the applicability of Notification No. 45/2001 and the alleged non-compliance by the appellant.

3. The Notification in question covers Rule 19, which pertains to "export without payment of duty." Given the specific circumstances of the case, it was argued that blindly applying Notification No. 45/2001 may not be appropriate. The eligibility of the appellant for refund was not in question, except for the duty payment correctness. The Revenue's denial of the refund was deemed unjustifiable.

4. The decision of the jurisdictional High Court was cited, emphasizing that denying the refund would contradict the constitutional mandate on tax collection. The Court held that a claim for refund cannot be barred by limitation if the tax was paid by mistake. It was concluded that the appellant was entitled to the refund as claimed, and the rejection was deemed improper.

5. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential reliefs as per the law. The judgment was pronounced on 15.10.2019 by Mr. P. Dinesha, Member (Judicial) of the Appellate Tribunal CESTAT Chennai.