Order date – 22 December 2022

Facts –

• The Appellant, M/s. CNH Industrial (India) Pvt. Ltd. (M/s Fiat India Limited or M/s FIL), were engaged in the manufacture of Premier Padmini (PP) model cars, apart from their own models, on job work basis for a merchant manufacturer M/s Premier Automobiles Ltd. (M/s PAL). They been availing of benefit of Notfn. No. 4/97 CE dtd. 1.3.97, as amended, for refund of Central Excise duty @ 15% /16% ad-valorem on motor cars which subsequently had been registered as 'TAXI' with RTO after clearance.
• M/s PAL appointed other appellants or selling the PP model cars in Mumbai and at different places.
• A show cause notice were issued on the ground that the appellant has fraudulently claimed refund of differential Central Excise duty on account of PP model cars converted into taxis, for which cheques were issued in favour of the taxi owners but the amounts mentioned on the cheques had not been actually passed on to the taxi owners.

Issue –

• Whether the rejection of refund and imposition of penalty are in order?

Order –

• The refund claims filed by the appellant in terms of the Notification 5/98-CE have been correctly allowed by the jurisdictional Assistant/ deputy Commissioners in terms of the order of the Tribunal dated 27.10.2004/ 17.06.2005 and demands in respect of these refund claims to the extent indicated above needs to be set aside.
• Further the mismatches as stated are very minor in nature. There are errors in recording the engine number in the show cause notice whereby same engine number appeared twice in the show cause notice which is practically impossible. The verification as undertaken in these cases cannot be a reason for denial and the verification has to be caused by referring to all other details.
• By plain reading of the order dated 27.10.2004/ 17.06.2005 Tribunal has specifically held that in terms of the condition prescribed by the notification 5/98-CE, the only requirement that was to be fulfilled in respect of the said notification was to show that the manufacturer had refunded the excess amount collected and claimed as refund to their buyer i.e. their dealer thus it is unable to sustain the penalties imposed on appellant number 2, 3 and 4.
• Hence the appeals are allowed.