Excise, VAT & CST Case Laws, CENVAT Rulings & Updates

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Facts –

The Appellants, M/s. Blue Mount Textiles & others, were 100% Export Oriented Unit (EOU) for the purpose of manufacture of excisable goods. They procured imported capital goods and raw materials without payment of duty under Notification No. 52/2003-Cus. dated 31.03.2003 and procured indigenous excisable goods (capital goods, spares, raw material, fuel, etc.) without payment of duty under Notification No. 22/2003-C.Ex. dated 31.03.2003.
During the year 2011, they intended to exit the EOU scheme. After due process, the department issued Final Exit Order.
The appellants then filed refund claim on the ground that they had paid an excess amount of duty. The plea on the part of the appellants was that they are eligible to pay duty on the manufactured items only as per Sl. No. 2 of Notification No. 23/2003-C.E. dated 31.03.2003.
The refund sanctioning authority rejected the refund claims observing that the tax paid by the appellants are correct and that there is no excess payment to be refunded.

Issue –

Whether the appellants have made payment of excess duty and if so, whether they are eligible for refund?

Order –

The Tribunal observed that the appellants are eligible to get the concessional rate of duty as per the Notification No. 23/2003-C.E in regard to finished goods since it is a case of de-bonding and not DTA sale.
In respect of the duty paid on semi-finished goods, the Tribunal had held in the case of M/s. EID Parry India Ltd. that the demand of duty in respect of semi-finished goods cannot sustain. The Tribunal followed the decision in the case of M/s. Tirumala Seung Han Textiles Ltd. v. C.C.E., Hyderabad [2009 (237) E.L.T. 145 (Tribunal – Bangalore)] to set aside the demand.
After appreciating the facts and following the ratio laid down in the above decisions, it was held that the rejection of refund is without any legal or factual basis. Hence the appeals are allowed.

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