2016 (4) TMI 1108 - AT - Central Excise

Tribunal allows refund for excess duty paid, distinguishes between rebate and refund claims

The Tribunal set aside the rejection of a rebate claim for excess duty paid at 14% instead of 10%, directing the adjudicating authority to consider the ... Refund claim in respect of excess paid duty - rejection of refund claim in respect of excess paid duty on the ground that the appellant have not challenged the order whereby the rebate was disallowed - Held that:- We do not agree with the finding for rejection of claim for the reason that the rebate against the export is granted under Rule 18 of CER, 2002 and notification issued there under, whereas in case of any duty which is paid in excess can be refunded under the general provisions of refund under Section 11B. Since the appellant had paid excess duty at the rate of 14% instead of correct duty payable at the rate of 10% the 4% though excess paid cannot be sanctioned as rebate, therefore the same was disallowed. However the adjudicating authority while disallowing the rebate also mentioned in the order that “for allowing a 4% of the duty paid in excess the claimant is required to follow the procedure as per Central Excise Law'. Therefore the proceeding of rebate and proceeding of refund are two different proceedings. The appellant have rightly claimed the refund of 4% excess paid duty the same should have been disposed of on its own merit without getting influenced by the order dt. 20.4.2009 by which the rebate was disallowed. - Decided in favour of assessee Issues:Rejection of rebate claim for excess duty paid at 14% instead of 10%, requirement to follow Central Excise Law for refund claim, rejection of refund claim due to failure to challenge previous order disallowing rebate.Analysis:The appellant's rebate claim for an amount of Rs. 1,09,514 was rejected as they paid 14% duty instead of the correct rate of 10%. The Order-in-Original directed the appellant to follow Central Excise Law for allowing the excess paid duty of 4%. The appellant filed a refund claim against the disallowed rebate. The Commissioner (Appeals) upheld the rejection citing failure to challenge the initial order disallowing rebate. The appellant argued that the excess paid duty, though not rebatable, is refundable. The Tribunal noted that rebate and refund are distinct processes. The appellant rightfully sought a refund for the excess paid duty, which should be considered independently from the previous rebate disallowance. The Tribunal set aside the impugned order, directing the adjudicating authority to decide the refund claim as per law.This judgment clarifies the distinction between rebate and refund claims, emphasizing that the excess paid duty, though not eligible for rebate, can be refunded under general provisions. It highlights the importance of following Central Excise Law procedures for refund claims and underscores the need to assess refund claims independently of previous rebate disallowances. The Tribunal's decision ensures the appellant's right to seek a refund for excess duty paid, setting a precedent for handling similar cases in accordance with the law.