2005 (1) TMI 480 - AT - Central Excise

Tribunal allows refund for duty paid voluntarily during investigation, emphasizing duty payment basis & refund eligibility

COMMISSIONER OF CENTRAL EXCISE, CHENNAI-IV Versus RUNLON TREADS (P) LTD.

The Tribunal rejected the Revenue's appeal against a manufacturing company for refund eligibility of duty paid during an investigation for alleged ... Refund Issues:1. Refund eligibility of duty amount paid during investigation for alleged suppression of production.Analysis:The appeal was filed by the Revenue against an Order-in-Appeal, where the Respondents, a manufacturing company, were accused of suppression of production and had voluntarily paid duty amounting to Rs. 1,57,950 during the investigation. Penalties were imposed, but the Commissioner (Appeals) set aside the order, stating there was no clandestine removal. The Revenue argued that the payment indicated admission of clandestine removal, making the refund inadmissible.Upon hearing both sides, the Tribunal noted that the duty amount in question was paid during the investigation of alleged suppression, which was not upheld by the Commissioner (Appeals), meaning no duty was payable. Consequently, the Tribunal held that the refund was admissible to the Respondents, as the duty was paid voluntarily during the investigation and no suppression was established. Therefore, the appeal filed by the Revenue was rejected.This judgment clarifies that the voluntary payment of duty during investigation, without any subsequent establishment of suppression, entitles the party to a refund. The decision underscores the importance of establishing the basis for duty payment and the relevance of findings regarding alleged violations in determining refund eligibility in excise duty cases.