2021 (6) TMI 979 - AT - Central Excise

Refund of excess paid excise duty - non-production of evidence to prove double payment of duty - procedure prescribed for cancelling the invoices not followed - section 11B of Central Excise Act, 1944 - HELD THAT - The original authority has called for a verification report from the Range officer. It is mentioned in the report that the appellant has not followed the procedure for cancellation of invoice and that there is no evidence for double payment. From the ARE-1 itself, it is easy for the department to verify whether the goods as per the cancelled invoices have been exported or not. The department does not have a case that the quantities of goods mentioned in the cancelled invoices have been exported. Merely because, the procedure under Para 12 of Chapter 4 of CBEC Excise Manual of Supplementary Instructions, 2005 has not been followed cannot be a ground to deny the refund of excess duty paid. Needless to say that no duty can be retained by department, which is not required to be paid under the provisions of law. When the matter came up for hearing, the department has not produced any such details on their side. However, the appellant has furnished the entire details with regard to rebate claim and the summary of total exports made on payment of duty during the relevant period. It is clear from these documents that the appellant has not claimed rebate on these invoices. They have also furnished the Certificate from their Chartered Accountant to show that the rebate has not been claimed on these invoices. The certificate also establishes that there is excess payment of duty - These documents would sufficiently prove and establish that the appellant has paid excess duty and also the fact that they have not claimed rebate on these invoices. The decision relied on by the appellant in the case of APEX ECOTECH PVT. LTD. VERSUS COMMISSIONER OF C. EX. S.T., PUNE-I 2018 (11) TMI 566 - CESTAT MUMBAI is also on similar set of facts in which the Tribunal has allowed refund, where it was held that There is no specific provision mandate as to how an invoice (duty paying document) has to be cancelled and refund was allowed. The rejection of refund is unjustified - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Rejection of refund claim under section 11B of the Central Excise Act, 1944 for excess payment of excise duty on cancelled export invoices.

Analysis:
The appellant, engaged in manufacturing and exporting automotive instruments, filed a refund claim for excess payment of Central Excise duty on two cancelled export invoices. The original authority rejected the claim citing lack of evidence for double duty payment and failure to follow prescribed cancellation procedures. The Commissioner (Appeals) upheld the rejection, leading the appellant to appeal before the Tribunal.

The appellant's counsel argued that although the invoices were prepared, the goods were not exported due to quantity variation, resulting in subsequent clearance with correct invoices and duty payment. The appellant discovered the excess duty payment only after filing returns and submitted evidence including Gate Pass, ARE-1 copies, and Cenvat Ledger. The Range Officer's report questioned the appellant's claim, highlighting non-compliance with invoice cancellation procedures and lack of proof for double payment.

The counsel contended that the failure to inform the department about cancelled invoices should not justify withholding the excess duty refund. The appellant's Chartered Accountant certified the cancellation of invoices and excess duty payment, supported by rebate claim details. Citing a similar case precedent, the counsel sought allowance of the appeal.

The Authorized Representative supported the rejection, emphasizing the appellant's non-compliance with prescribed cancellation procedures and the lack of evidence for double duty payment. The Tribunal examined the case, noting the appellant's inadvertent statement about domestic clearance, while ARE-1 returns confirmed duty payment for exports. The Tribunal found the rejection unjustified, as the appellant had paid excess duty on cancelled invoices and not claimed rebate, contrary to departmental allegations.

During subsequent hearings, the department failed to produce evidence contradicting the appellant's claim of excess duty payment and non-claim of rebate. The Chartered Accountant's certificate further confirmed the excess payment and non-claim of rebate, aligning with the Tribunal's decision in a similar case. Consequently, the Tribunal set aside the impugned order, allowing the appeal with any necessary reliefs.

In conclusion, the Tribunal overturned the rejection of the refund claim, emphasizing the appellant's excess duty payment on cancelled invoices and non-claim of rebate, supported by documentary evidence and Chartered Accountant certification. The decision highlighted the department's failure to provide evidence to counter the appellant's claims, leading to the appeal's allowance with consequential reliefs.