2006 (9) TMI 309 - AT - Central Excise

Summary

Issues:
1. Refund of duty to a 100% Export Oriented Undertaking.
2. Interpretation of Notification No. 82/92-C.E.
3. Time limitation for demand notice under Section 11A of the Central Excise Act.
4. Correctness of refund claim and liability for duty.

Analysis:
1. The appeal was against the grant of a refund of duty to a 100% Export Oriented Undertaking (EOU) by the lower Appellate Authority. The EOU had removed cotton combed yarn to a DTA unit under a deemed export scenario. The EOU claimed exemption under Notification No. 82/92-C.E. The Department later demanded duty, which the EOU paid under protest and subsequently filed a refund claim, leading to the present appeal.

2. The Notification exempted excisable goods manufactured by a 100% EOU cleared against an advance release order from Basic Excise Duty (BED). The amendment effective from 1-4-1995 specified that the exemption would be limited to the duty leviable under Section 3 of the Central Excises and Salt Act, 1944, equal to the duty of customs on similar imported goods. The absence of reference to additional customs duty implied liability for Countervailing Duty (CVD) on such goods.

3. The Assistant Commissioner determined the duty liability after more than two years from the clearance, demanding payment through a letter rather than a formal notice under Section 11A. The absence of a proper demand notice within the statutory limitation period led to the allowance of the refund claim by the Commissioner (Appeals).

4. The Commissioner (Appeals) correctly analyzed the cause of action for the refund, considering the time limitation under Section 11A. The liability for duty was disputed based on the final assessment date, with the Tribunal supporting the view that the delayed demand for duty was time-barred. The decision cited by the Department did not align with the circumstances of the case, leading to the dismissal of the appeal and upholding of the refund order.

In conclusion, the Tribunal sustained the lower Appellate Authority's decision, dismissing the Department's appeal and affirming the refund of duty to the 100% EOU.