2017 (12) TMI 1083 - AT - Central Excise

Tribunal upholds duty refund for seized goods post-plastic ban, emphasizing non-marketable nature

The Tribunal upheld the refund claim of duty paid by the assessee-Respondents for goods seized after the legal ban on plastic packaging, emphasizing the ... Refund of excise duty paid on goods for export - export clearance and rebate entitlement - ban on use of plastic packing making goods non-marketable - seizure of exported goods consequent to statutory prohibition - entitlement to refund where export rendered impossible by lawRefund of excise duty paid on goods for export - export clearance and rebate entitlement - ban on use of plastic packing making goods non-marketable - Whether the assessee was entitled to refund of excise duty paid on goods cleared for export which could not be exported and were seized after a statutory ban on plastic packing - HELD THAT: - The Tribunal recorded that it was an admitted fact that the assessee had cleared the goods after paying excise duty and that the production was exclusively for export. Subsequent to clearance the goods could not be exported because a ban on plastic sachets for Gutkha/Pan Masala was held applicable, rendering the goods non-marketable and leading to their seizure. The Commissioner (Appeals) had allowed the refund claim on the basis that the assessee had paid duty for export goods which could not be exported due to the legal prohibition and consequent seizure. The Tribunal found that, in the peculiar facts and circumstances where the prohibition made export impossible and the goods could not be marketed domestically, there was no reason to interfere with the appellate authority's conclusion that refund was payable.The Commissioner (Appeals) order allowing the refund of duty was sustained and the Department's appeal was dismissed.Final Conclusion: The appeal filed by the Department is dismissed; the refund of excise duty paid on goods cleared for export but rendered non-marketable and seized due to the statutory ban is upheld. Issues Involved:1. Refund claim of duty paid by assessee-Respondents for goods seized after legal ban on plastic packaging.2. Entitlement of rebate for goods cleared for export but seized before export.3. Decision on refund claim by Commissioner (Appeals) and appeal by the Department.Analysis:1. The appeal was filed by the Department against the Order-in-Appeal passed by the Commissioner (Appeals) Central Excise, Delhi-I, concerning the period from 01.04.2011 to 05.09.2011. The case involved the manufacture of Pan Masala containing Chewing Tobacco known as 'Gutkha'. The Hon'ble Supreme Court had banned the use of plastic for packing such products from 01.03.2011. The assessee-Respondents had requested to seal the factory on 28.02.2011, but later, it was decided that plastic could be used for export. However, the Plastic Waste Rules banned plastic even for export, leading to the seizure of goods in air cargo on 03.09.2011, with a redemption fine imposed.2. The undisputed fact was that the goods were cleared for export after paying duty, making the assessee-Respondents entitled to a rebate. However, the goods became non-marketable due to the legal ban, rendering them unsellable both domestically and for export even after paying the redemption fine. The Commissioner (Appeals) allowed the refund claim, leading to the Department's appeal.3. The Tribunal noted that the goods were cleared after paying excise duty exclusively for export purposes. The legal ban made the goods non-marketable, causing losses to the assessee-Respondents. In light of these circumstances, the Tribunal upheld the Commissioner (Appeals) decision to refund the duty paid by the assessee-Respondents. Consequently, the appeal filed by the Department was dismissed, affirming the refund order.In conclusion, the Tribunal upheld the refund claim of duty paid by the assessee-Respondents for goods seized after the legal ban on plastic packaging, emphasizing the non-marketable nature of the goods due to the ban. The decision highlighted the entitlement of rebate for goods cleared for export but seized before export, ultimately sustaining the Commissioner (Appeals) order and dismissing the Department's appeal.