2007 (7) TMI 537 - AT - Central Excise

Summary

Issues:
Refund claim for duty paid by Export Oriented Unit (EOU) on capital goods procured without payment of duty.

Analysis:
The case involved a dispute over a refund claim filed by an EOU for duty paid on capital goods despite being entitled to procure them without duty payment. The EOU paid the duty under protest due to a show cause notice issued by the Development Commissioner's office. After the matter was resolved in favor of the EOU, they applied for a refund, which was initially rejected pending an investigation by the Central Excise authorities. The Commissioner (Appeals) ruled in favor of the EOU, stating that they were eligible for the refund claim as the issue of procuring capital goods had been resolved in their favor by the Development Commissioner. The Revenue failed to provide evidence to refute the EOU's payment of duty or the investigation's findings. Given the EOU's status and rights, the Commissioner's decision to grant the refund claim was deemed correct and legal, warranting no interference.

The key point of contention was whether the EOU was entitled to the refund claim for duty paid on capital goods procured as an EOU. The Commissioner (Appeals) held that since the issue of procuring the goods had been resolved in favor of the EOU by the Development Commissioner, they were eligible for the refund claim. The Revenue's failure to present evidence contradicting the EOU's payment of duty or the investigation's findings supported the Commissioner's decision to grant the refund claim.

The decision highlighted the EOU's right to procure capital goods without duty payment and the significance of the Development Commissioner's resolution in favor of the EOU in determining their eligibility for the refund claim. The absence of evidence from the Revenue to dispute the EOU's payment of duty or the investigation's findings further strengthened the Commissioner's ruling in favor of the EOU. Consequently, the appeal filed by the Revenue was rejected, and the cross-objection filed by the EOU in support of the Order-in-Appeal was upheld, affirming the EOU's entitlement to the refund claim.

In conclusion, the judgment emphasized the importance of upholding an EOU's rights to duty-free procurement of capital goods and the relevance of official resolutions in determining refund claim eligibility. The lack of evidence to counter the EOU's payment of duty or the investigation's findings supported the decision to grant the refund claim, ultimately resulting in the rejection of the Revenue's appeal and the validation of the EOU's cross-objection.