2000 (11) TMI 672 - AT - Central Excise

Tribunal rules in favor of E.O.U. for duty refund, highlighting procedural fairness and export benefits.

DELTA INDUSTRIES LTD. Versus COLLECTOR OF CENTRAL EXCISE, CALCUTTA

The Tribunal held in favor of the appellant, a 100% E.O.U., in a case concerning the refund of central excise duty paid on pack sheets. Despite procedural ... benefit of Notification No. 123/81-C.E. Issues:1. Entitlement to refund of central excise duty on pack sheets by a 100% E.O.U. without fulfilling conditions.Analysis:1. The appellant, a 100% E.O.U. engaged in manufacturing, faced challenges due to a fire accident, converting to a DTAU and then back to a 100% E.O.U. The issue was whether they were entitled to a refund of central excise duty paid on pack sheets without following prescribed procedures. The appellant had obtained necessary permissions but faced cancellation of CT-3 by the Superintendent, compelling them to use duty-paid pack sheets. The appellant claimed refund based on the restoration of their 100% E.O.U. status by the Department. The Tribunal noted that the appellant was forced by the Department to procure duty-paid pack sheets, preventing them from availing benefits under Notification No. 123/81. Despite procedural irregularities, the duty-paid pack sheets were used in manufacturing goods for export from the 100% E.O.U., as evidenced by relevant export documents. The Tribunal held that the appellant should not suffer due to procedural errors caused by the Department and directed the Assistant Commissioner to sanction the refund of Rs. 28,101/-.2. The appellant's consultant argued that the Department's actions prevented the appellant from obtaining non-duty paid pack sheets under CT-3, leading to the purchase of duty-paid materials. The consultant contended that the restoration of the unit's 100% E.O.U. status entitled the appellant to a refund as per Notification No. 123/81. The consultant emphasized that a citizen's substantive rights should not be denied due to minor procedural issues. Referring to a previous Tribunal decision, the consultant highlighted the importance of not depriving individuals of their rights based on procedural infractions. The consultant criticized the Commissioner (Appeals) for not evaluating the case correctly and passing a biased order. The Tribunal agreed with the consultant's arguments, noting that the appellant was compelled by the Department to use duty-paid pack sheets and should not be penalized for procedural irregularities beyond their control.3. The Revenue's representative reiterated the reasoning of the lower authorities, supporting the rejection of the refund claim based on the appellant's alleged failure to adhere to procedures outlined in Notification No. 123/81. However, the Tribunal disagreed with this stance, emphasizing that the appellant's use of duty-paid pack sheets in manufacturing goods for export from the 100% E.O.U. was a result of the Department's actions. The Tribunal found that the appellant's claim for a refund was valid, given the circumstances, and overturned the decision of the Commissioner (Appeals) to reject the claim. Consequently, the Tribunal allowed the appeal, providing consequential relief to the appellant by directing the Assistant Commissioner to sanction the refund of Rs. 28,101/-.