2023 (10) TMI 731 - AT - Central Excise

Refund of excise duty paid erroneously - rejection of refund claim holding that there was no requirement of payment of duty in view of specific bar provided under Section 5A(1A) of Central Excise Act, 1944 - HELD THAT - It is not in dispute that the appellant supplied the goods to a project of BHEL, supply of which enjoyed exemption under Notification No. 06/2006-CE dated 01.03.2006. Further, it is not in dispute that the appellant erroneously paid duty of exercise amounting to Rs. 55,02,800/- in respect of goods supplied to BHEL and did not charge the exercise duty from its customers. When the appellant realized that he has paid excess duty thereafter he filed the refund application under Section 11B of the Central Excise Act. Refund was rejected mainly on the ground that he has not challenged the self-assessment in appeal and without challenging the self-assessment refund claim is not maintainable. It is also not in dispute that the refund claim has been filed within the period of limitation as prescribed under the provision of Section 11B. The revenue has raised the objection that in view of the judgment of the Hon ble Apex Court in the case of COLLECTOR OF CENTRAL EXCISE, KANPUR VERSUS FLOCK (INDIA) PVT. LTD. 2000 (8) TMI 88 - SUPREME COURT unless the self-assessment is altered by way of an appeal, refund claim is not maintainable - On going through the judgment of the Hon ble Apex Court in the case of Flock India Pvt. Ltd., it is found that in that case there was a classification dispute and the classification filed by the assessee was changed by the Assistant Commissioner of Central Excise leading to levy of higher duty of exercise. It is found that even the case of Hon ble Apex Court of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV 2019 (9) TMI 802 - SUPREME COURT is also not applicable in the facts of the present case because the said case was under provision of Customs Act, 1962 where the provisions are different from that of Excise Act and service tax. The impugned order is not sustainable in law and the same is set aside - Appeal allowed.

Summary

Issues Involved:
1. Whether the refund claim is maintainable without challenging the self-assessment.
2. Applicability of the judgments cited by both parties.
3. Entitlement to refund of excess duty paid erroneously.

Summary:

Issue 1: Maintainability of Refund Claim Without Challenging Self-Assessment
The appellant filed a refund claim for Rs. 55,02,800/- under Section 11B of the Central Excise Act, 1944, after realizing they had erroneously paid excise duty on goods supplied to a mega power project, which was exempted under Notification No. 06/2006-CE dated 01.03.2006. The original adjudicating authority and the Commissioner (Appeals) rejected the refund claim on the grounds that the appellant did not challenge the self-assessment in appeal. The Tribunal, however, found that the refund claim was filed within the period of limitation prescribed under Section 11B and that the contention of needing to challenge the self-assessment was not tenable, as the provisions of the Central Excise Act allow for refund claims without such a prerequisite.

Issue 2: Applicability of Judgments
The Tribunal considered various judgments cited by both parties. The Revenue relied on the judgments of the Hon'ble Apex Court in the cases of Flock India Pvt. Ltd. and ITC Ltd., arguing that without challenging the self-assessment, the refund claim is not maintainable. The Tribunal distinguished these cases, noting that in Flock India, the issue was related to a classification dispute, which is not applicable in the present case. Similarly, the ITC Ltd. case was under the provisions of the Customs Act, which differ from the Central Excise Act. The Tribunal also referred to the recent decision of the Larger Bench in the case of M/s Shree Balaji Warehouse, which held that a refund claim is maintainable even without challenging the self-assessment.

Issue 3: Entitlement to Refund of Excess Duty Paid Erroneously
The Tribunal found that the appellant erroneously paid duty on exempted goods and did not pass on the duty to its customers. The decisions cited by the appellant, such as Indian Oil Corporation Ltd. vs. Commissioner of C.Ex., Indo Rama Synthetics (India) Ltd. vs. Union of India, and others, supported the appellant's claim for a refund of excess duty paid. The Tribunal held that the impugned order rejecting the refund was not sustainable in law and allowed the appeal with consequential relief.

Conclusion:
The Tribunal set aside the impugned order, allowing the appellant's appeal and granting the refund of the excess duty paid, as the refund claim was found to be maintainable without the need to challenge the self-assessment. The Tribunal emphasized that the statutory provisions under Section 11B of the Central Excise Act do not bar the filing of refund claims for self-assessed duties.