1994 (5) TMI 27 - HC - Central Excise

Court Upholds Duty Refund Rejection based on Exemption Conditions.

ZENITH CHEMICALS Versus GOVERNMENT OF INDIA

The High Court upheld the authorities' decision in rejecting the duty refund claim of a manufacturer and exporter. The court clarified that the government ... Refund - Rebate on export - Set-off of duty - Exemption Notification Issues:Challenge to Government order rejecting revision application against appellate order on duty refund claim.Detailed Analysis:The petitioner, a manufacturer and exporter of H. Acid, used Naphthalene as an input. Initially, both input and end product fell under the same tariff item. However, post the Central Excise Tariff Act, 1985, Naphthalene was classified separately. A government notification exempted final products from duty equivalent to that paid on the input. The petitioner exported Dye-Intermediate and claimed duty refund of Rs. 5,31,954.05. The Excise authorities rejected the claim stating that the duty adjustment through set off register did not qualify for exemption under the notification.The Assistant Collector rejected the claim, emphasizing that the notification did not allow duty credit on inputs but exempted final products from duty paid on inputs. The petitioner's appeal and revision were also dismissed. The High Court upheld the authorities' decision, stating that the notification did not permit duty adjustment through set off register. The petitioner must pay the full duty to claim a refund based on the exemption. The court clarified that the exemption conditions must be met for claiming the benefit. The set off procedure was not covered under the notification, and any other interpretation would contradict the notification's provisions.Therefore, the court found no grounds to interfere with the government's decision. The petitioner's misunderstanding of duty adjustment through set off register was dismissed, and the writ petition was rejected without costs.