2015 (12) TMI 734 - AT - Central Excise

Court rules on refund claims without challenging production order

M/s Ashish Processors, M/s Dharmendra Textile Processors, M/s Priti Processors Ltd., M/s Vinny Overseas Pvt Ltd., M/s Bajaj Processors Ltd. & M/s Chamaria Fashions Pvt Ltd. Versus Commissioner of Central Excise-Ahmedabad-I

The Tribunal granted the appellants the opportunity to claim refunds without challenging the Annual Capacity of Production order. The High Court ruled in ... Denial of refund claim - discharge of duty liabilities under the Compounded Levy Scheme as per Annual Capacity of Production under Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998 - Bar of limitation - Unjust enrichment - Held that:- Gujarat High Court in the case of M/s Premraj Dyeing and Printing Mills Pvt Ltd Vs UOI - [2013 (6) TMI 118 - GUJARAT HIGH COURT] held the first issue is in favour of the appellants. It has been held that as the ACP order was not appealable, it would be incorrect to hold that without challenging such an order, the manufacturer cannot claim refund of duty erroneously collected. The other two issues, the Honble High Court remanded the matter to the Adjudicating Authority. - refund claims cannot be rejected on the first issue as the ACP order was not appealable. The other two issues, the matters are remanded to the Adjudicating authority to decide afresh in the light of the decision of the Honble High Court. The impugned order is modified accordingly - Decided against Assessee. Issues involved: Refund claims without challenging Annual Production Capacity (ACP) Order, limitation on refund claims, principle of unjust enrichment.Analysis:1. The appellants were involved in manufacturing Textile Fabrics under specific classifications and were discharging duty under the Compounded Levy Scheme as per the Annual Capacity of Production rules.2. The key issues raised were: a) Refund claims and the need to challenge the ACP Order, b) Limitation period for refund claims, and c) Fulfillment of the principle of unjust enrichment.3. The Hon'ble Gujarat High Court's judgment in a similar case favored the appellants on the first issue, stating that challenging the ACP order was not necessary to claim a refund. The other two issues were remanded back to the Adjudicating Authority for further consideration.4. The High Court emphasized that the determination of ACP was an administrative exercise and not appealable, thus allowing the manufacturers to claim refunds without challenging this order. The court differentiated this scenario from cases where appealable orders were not challenged, making refund claims inapplicable.5. Consequently, the Tribunal held that the refund claims could not be rejected solely based on the non-challenge of the ACP order. The matters related to limitation and unjust enrichment were directed to be reconsidered by the Adjudicating Authority in light of the High Court's decision, allowing the appellants to provide necessary documents for substantiation.6. The Tribunal modified the impugned order accordingly, granting the appellants the opportunity to present their case on the remaining issues before the Adjudicating Authority. The appellants were advised to ensure a fair hearing during the decision-making process.7. Additionally, the Early Hearing applications filed by the appellants were dismissed as they were no longer relevant in the context of the judgment.