2024 (9) TMI 768 - AT - Central Excise

Cosmetics manufacturer wins refund appeal after paying differential duty under Notification 20/2007-CE Paragraph 2A requirements fulfilled

M/s. Hindustan Unilever Limited Versus Commissioner of Central Excise, Dibrugarh Commissionerate

CESTAT Kolkata allowed the appeal regarding refund of self-credit claimed by appellant manufacturing cosmetics and Vaseline under Chapters 33 and 27. The ... Rejection with respect to the self-credit taken by the appellant - manufacture of cosmetics and Vaseline classifiable under Chapter 33 and 27 respectively of first schedule to the CETA - benefit of N/N. 20/2007-CE dated 25.04.2007 - HELD THAT:- Both the lower authorities have not disputed the fact that differential duty of Rs. 18,89,626/- has been paid by the appellant along with duty payable for the month of January 2012, on 02.02.2012. It is also observed that the appellant has fulfilled all the conditions of N/N. 20/2007-CE, as amended by N/N. 20/2008-CE. Thus, there is no dispute regarding the eligibility of the credit to the appellant. The impugned order has not allowed the refund of self-credit claimed by the appellant to the extent of 56% of the said differential duty paid, amounting to Rs. 10,27,377/-, based on the observation that the appellant have not complied with Paragraph 2A of the said Notification - In the present case, as directed by the Department, the appellant paid the duty for the months of August 2011 to December 2011 in the month of January 2012. Thus, there is no infirmity in taking self-credit of all the duties paid in the month of January, including the duty paid for the earlier months. Accordingly, the appellant is eligible for the refund of self-credit of Rs.10,27,377/-.Thus, that portion of the impugned order rejecting the refund of self-credit to the extent of Rs.10,27,377/- is liable to be set aside. The portion of the impugned order rejecting the refund of self-credit to the extent of Rs.10,27,377/- set aside - appeal allowed. Issues:Appeal against rejection of refund self-credit of Rs. 10,27,377/- taken by the appellant, compliance with Notification No. 20/2007-CE, interpretation of Paragraph 2A of the said Notification, eligibility for self-credit, Tribunal's previous judgment on similar issue, support from CBEC Circular and Tribunal judgment.Analysis:The judgment pertains to an appeal filed against the rejection of a refund in the form of self-credit of Rs. 10,27,377/- by the appellant. The appellant, engaged in the manufacture of cosmetics and Vaseline, availed benefits under Notification No. 20/2007-CE, which provides exemption for goods manufactured in North Eastern States. The dispute arose regarding the method of valuation of shampoos, leading to differential duty payments. The appellant paid the differential duty for August 2011 to December 2011 along with interest and informed the jurisdictional Assistant Commissioner. The appellant then took self-credit of Rs. 10,27,377/- in their account current on 02.02.2012. However, the Ld. Asst. Commissioner disallowed this self-credit, leading to the appeal.The appellant contended that they fulfilled all conditions under the Notification and argued that there was no bar on availing self-credit for duty paid on past clearances. They cited a Tribunal judgment in their own case and CBEC Circular to support their claim. The Revenue representative reiterated the findings in the impugned order.Upon analysis, the Tribunal observed that the differential duty had been paid by the appellant, and all conditions of the Notification had been met. The impugned order rejected the refund based on non-compliance with Paragraph 2A of the Notification. However, the Tribunal found no restriction in Paragraph 2A against availing self-credit for duty paid in earlier months along with subsequent month's duty. As per the Notification, self-credit can be taken by the 7th day of the succeeding month. Since the duty for earlier months was paid in January 2012 as directed by the Department, the Tribunal held that the appellant was eligible for the refund of self-credit of Rs. 10,27,377/-. Consequently, the Tribunal set aside the portion of the impugned order rejecting the refund and allowed the appeal with consequential relief.In conclusion, the Tribunal ruled in favor of the appellant, allowing the refund of self-credit and setting aside the rejection based on the interpretation of the Notification and compliance with the prescribed procedures.