2022 (4) TMI 931 - AT - Central Excise

Refund claim - SEZ unit - the petroleum product i.e., High Speed Diesel (HSD) being a non-cenvatable goods for which the supplier had raised commercial invoices wherein duty element was not explicitly mentioned, the payment of duty itself was disputed. - rejection of refund on the ground of non-appreciation of the evidentiary value of the documents - HELD THAT - There is no dispute regarding receiving of the goods from DTA without payment of duty until withdrawal of the facility for warehousing of petroleum products vide C.B.E.C. Circular No. 796/29/2004-CX dated 04.09.2004. This withdrawal prompted the supplier to charge Excise Duty on the supplies. Here, the supplier is not a private party, but a Public Sector Undertaking. The certificate issued by the said supplier, clearly indicated that the product supplied by them to the appellant was duty paid. The appellant has also placed on record the certificate issued by the manufacturer namely, M/s. Chennai Petroleum Corporation Ltd., a group company of M/s. Indian Oil Corporation Ltd., wherein also they have certified that the product was dispatched to the supplier namely, M/s. Indian Oil Corporation Ltd. on payment of Central Excise Duty plus Educational Cess - When these documents along with other documents were made available, the Adjudicating Authority, without bothering to examine, has brushed aside by holding that no such documents as directed by the First Appellate Authority were made available to substantiate the duty payment - Admittedly, the appellant had claimed refund for the period from September 2004 to April 2007 and since then, the appellant has not been given sustainable reasons for denying its rightful claim for refund. The Revenue has not denied the contents of the certificate issued by the supplier and in turn, the producer of HSD, that the products in question were dispatched on payment of Central Excise Duty plus Educational Cess, which has thereafter been paid to the Government. The only possible conclusion that could be drawn in the absence of specific disputes regarding the contents of the certificates, by the Revenue, therefore, is that the payment of duty thereof stands proved and hence, rejection cannot be made only for want of proof regarding payment of duty - the appellant has made out a case as to its payment of duty and hence, the impugned order is not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the rejection of the refund claim was correct?

Analysis:
The appellant appealed against the rejection of their refund claim. The Advocate for the Appellant argued that the authorities misdirected themselves by not appreciating the evidentiary value of the documents submitted, which indirectly established the payment of duty by the appellant. The documents included letters, invoices, and certificates confirming duty payments. The Adjudicating Authority and the First Appellate Authority did not give any finding on these documents, leading to the rejection of the refund claim, which was deemed improper by the Advocate.

The Revenue defended the rejection, stating that the duty payment for High Speed Diesel (HSD) was disputed as the duty element was not explicitly mentioned in the commercial invoices. However, the Tribunal noted that there was no dispute regarding the receipt of duty-paid goods from the supplier, a Public Sector Undertaking, after a change in regulations prompted the supplier to charge Excise Duty on the supplies.

The Tribunal reviewed the documents provided by the Appellant, including certificates from the supplier and the manufacturer, both confirming the payment of Central Excise Duty on the products. The Adjudicating Authority failed to examine these documents properly and rejected the claim without considering the clear evidence of duty payment provided by the certificates. The Tribunal found the rejection illogical, especially since the Revenue did not dispute the contents of the certificates.

The Tribunal concluded that the Appellant had established the payment of duty through the certificates provided, and the rejection of the refund claim was arbitrary and unsustainable. The First Appellate Authority's direction to verify other statutory documents and records to ascertain duty payment was not followed. Therefore, the Tribunal set aside the impugned order, allowing the appeal with consequential benefits as per the law.