Refund under exemption notification denied for duty paid on non-excisable transformer coils with passed-on duty incidence

HV/LV coils fabricated for transformer repair were found non-excisable because fabrication did not produce marketable goods, following earlier precedent that had attained finality. The refund claim under Notification No. 56/02-CE failed because that notification applies only to duty paid on excisable goods and could not be used to recover duty paid on goods judicially held non-excisable. The plea that duty was paid under coercion was rejected, as the duty incidence had been passed on to the consumer. The refund was therefore not maintainable and the Department's appeals succeeded.

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Issues: Whether HV/LV coils fabricated for repair of transformers were excisable goods and, if not, whether refund could still be claimed under Notification No. 56/02-CE dated 14.11.2002 on the basis that duty had been paid at clearance.

Analysis: The Tribunal held that the controversy on levy of excise duty on fabricated HV/LV coils had already been settled against the assessee in earlier precedent, which had attained finality. On that basis, the coils were held not to be subject to excise duty because their fabrication did not result in marketable goods. Having so held, the Tribunal further reasoned that Notification No. 56/02-CE applied to refund of duty paid on excisable goods and could not be invoked to claim refund of duty paid on goods found to be non-excisable. The plea of coercion in payment of duty was rejected, the Tribunal noting that the duty incidence had been passed on to the consumer.

Conclusion: The refund claim was not maintainable, and the Department's appeals were allowed.

Ratio Decidendi: Refund under an exemption notification meant for excisable goods cannot be claimed for duty paid on goods that are judicially found to be non-excisable, especially where the duty incidence has been passed on.

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