2018 (8) TMI 1384 - AT - Central Excise

Tribunal remands case for verification of central excise duty payment on power pumps

The Tribunal remanded the case to the original authority to verify if Balrampur Chini Mills had paid central excise duty on power driven pumps supplied by ... Refund of duties paid - double payment of central excise duty - duty exemption under project certificate - remand for factual verificationRefund of duties paid - double payment of central excise duty - duty exemption under project certificate - Entitlement to refund of central excise duty paid by the appellant where the buyer is alleged to have discharged the duty in respect of the same goods. - HELD THAT: - The Tribunal noted that the appellant paid central excise duty on supply of PD pumps without claiming exemption available under the project certificate, and the adjudicating authority accepted that the purchaser, M/s. Balrampur Chini Mills Ltd., had discharged the excise liability as the real beneficiary. If both the appellant and the purchaser have borne the duty on the same transaction, the appellant's payment would amount to a double payment and ordinarily be refundable. However, the record before the Tribunal did not contain material conclusively showing that the purchaser had in fact discharged the duty liability in respect of the appellant's supplies. In view of the absence of documentary verification on this factual point, the Tribunal concluded that the matter must be remitted to the original authority for fact-finding and verification of records. The original authority is directed that if it is satisfied on verification that the purchaser discharged the duty liability, the refund claimed by the appellant should be allowed. [Paras 5, 6]Matter remanded to the original authority to verify whether M/s. Balrampur Chini Mills Ltd. discharged the central excise liability in respect of the appellant's supplies; if so, grant the refund claimed by the appellant.Remand for factual verification - Appropriate remedial course where factual records are inadequate to determine entitlement to refund. - HELD THAT: - Given the inadequacy of material on record to establish that the purchaser had discharged the duty, the Tribunal exercised its discretion to set aside the impugned order and remand the case to the original authority for de novo fact-finding limited to verification of documents/records on whether the purchaser discharged the excise liability. The Tribunal specified the consequent outcome to be adopted by the original authority on verification. [Paras 6]Impugned order set aside; appeal allowed by way of remand for limited factual verification and consequential grant of refund if verified.Final Conclusion: Appeal allowed by remand: the matter is sent back to the original authority to verify whether the purchaser discharged the central excise liability in respect of the appellant's supplies, and if so to grant the refund claimed by the appellant. Issues:Refund of central excise duty paid by the appellant without claiming exemption benefit under Notification No.108/95 dated 20.8.1995 for supply of power driven pumps to M/s. Balrampur Chini Mills.Analysis:Issue 1: Refund of central excise dutyThe appellant, engaged in manufacturing power driven pumps, supplied pumps to M/s. Balrampur Chini Mills for an industrial project. The appellant paid central excise duty on the supply without availing the exemption under Notification No.108/95 dated 20.8.1995, which required a certificate from the project implementing authority. The refund application was rejected by the original authority and the Commissioner (Appeals). The Tribunal remanded the matter to the Commissioner (Appeals) for fresh consideration. Subsequently, the DGCEI found that certificates used for exemption claims were forged. The Commissioner of Central Excise dropped the show cause proceedings against manufacturers, including the appellant, as Balrampur Chini Mills had already paid the duty. The Commissioner (Appeals) rejected the appellant's appeal. The Tribunal remanded the matter to the original authority to verify if Balrampur Chini Mills had indeed paid the duty, potentially entitling the appellant to a refund.Issue 2: Duty payment and refund eligibilityThe appellant claimed refund based on a certificate from the project sanctioning authority, arguing that both the appellant and Balrampur Chini Mills had discharged the central excise duty liability. The adjudicating authority acknowledged that Balrampur Chini Mills had paid the duty on behalf of the manufacturers. However, the appellant did not claim the exemption benefit, resulting in double duty payment - once by the appellant and once by Balrampur Chini Mills. The Tribunal emphasized the need to confirm if Balrampur Chini Mills had indeed paid the duty. Without evidence of Balrampur Chini Mills' duty payment, the matter was remanded to the original authority for fact-finding. If verified, the appellant may be eligible for the refund claimed in their application.Conclusion:The Tribunal allowed the appeal by remanding the matter to the original authority for verification of whether Balrampur Chini Mills had discharged the central excise duty liability on the power driven pumps supplied by the appellant. If confirmed, the refund should be granted to the appellant.