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of <h1>Tribunal overturns rejection, grants refund claim under Compound Levy Scheme</h1> <h3>M/s Sidhi Vinayak Industries Versus Commissioner (Appeals), Central Excise & Central Goods & Service Tax</h3> M/s Sidhi Vinayak Industries Versus Commissioner (Appeals), Central Excise & Central Goods & Service Tax - TMI Issues:1. Refund claim under Compound Levy Scheme for SS Patta/Patti.2. Rejection of refund claim based on non-operative period of machines.3. Interpretation of Notification No. 17/2007-CE.4. Application of Section 3 of the Central Excise Act.5. Comparison with previous legal judgments.Analysis:1. The appellant, engaged in manufacturing SS Patta/Patti, filed a refund claim of &8377;1,16,910 for duty paid from October 2016 to February 2017 under the Compound Levy Scheme. The Department rejected the claim stating no provision for refund during non-operative machine periods. The original Adjudicating Authority and the Appeal Authority upheld the rejection, leading to the current challenge.2. The appellant argued that despite acknowledging eligibility for duty benefit under the scheme, the rejection was based on a wrong premise of not opting for the scheme initially. Citing legal precedents, the appellant sought the appeal's allowance by setting aside the Commissioner's decision.3. The Tribunal analyzed the Notification No. 17/2007-CE and noted that the provision regarding pro-rata calculation of duty applies when opting for the compounding scheme initially, not for refunds during non-functional machine periods. The Tribunal emphasized the duty liability only during the manufacturing process as per Section 3 of the Central Excise Act.4. Referring to past cases like Jupiter Industries vs. CCE, Jaipur, and ACME Industries vs. CCE, Jaipur, the Tribunal highlighted the necessity of manufacturing goods for excise duty levy. The judgment also quoted the Rajasthan High Court's decision on excise duty levy only when production occurs, supporting the appellant's claim for refund during non-operational machine periods.5. The Tribunal dismissed the Commissioner's distinction between cases, emphasizing the core issue of duty payment during non-manufacturing periods. Consequently, the Order rejecting the refund claim was set aside, and the Appeal was allowed in favor of the appellant.
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