ISPAT INDUSTRIES LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THERE are two appeals filed by the appellant M/s. Ispat Industries Ltd. against Orders -in -Appeal No. SR/278/NGP/2010, dated 10 -3 -2011 and Nos. PVR/167 -168/NGP/2013, dated 13 -3 -2013 both passed by the Commissioner of Central Excise (Appeals), Nagpur. As both the appeals deal with the same issue, they are taken up together for consideration and disposal. The appellant M/s. Ispat Industries Ltd. is a manufacturer of Iron & Steel products. They used to stock transfer of their goods to their depots and discharge excise duty liability on a provisional basis under Rule 7 of the Central Excise Rules, 2002. The provisional assessment used to be finalized on the basis of the sale price of the goods from the depot at the time of removal from the factory when it was known. For the quarter January -March, 2009, the appellant had cleared the goods on provisional basis. While calculating the differential duty for the purpose of finalization of assessment, they had taken the price of the goods at which they were sold from the depot on the same date as removal or any other date nearest to the date of clearance of the goods from the factory. The nearest date taken by them was nearest date prior to the removal of the goods from the factory. However, the Commissioner (Appeals) vide Order No. SR/198/NGP/ 2009, dated 11 -9 -2009 held that the nearest date to be taken for the purpose of assessment is the nearest date to the date of clearance of the goods from the factory either prior to or subsequent to date of removal from the factory. When the nearest date was taken in terms of the above order, it was found that the appellant had discharged excess duty to the tune of Rs. 30,90,857/ -. Accordingly, they filed a refund claim dated 11 -12 -2009 for refund of the excess duty paid. The said refund claim was considered by the jurisdictional authorities, who found that the appellant had paid excess duty as claimed in their refund claim. All the transactions of the assessee pertaining to this period was sent for verification and the Range Officer vide letter dated 13 -5 -2010 reported that the claim is in order and after verifying the invoices, he also reported vide letter dated 13 -8 -2010, that there is no unjust enrichment involved, inasmuch as the amount of excess duty paid by the manufacturer had not been passed on to any other person and the incidence of excess duty had been borne out by the appellant himself. In view of the above verification conducted by the department, the jurisdictional Assistant Commissioner vide order dated 31 -8 -2010 sanctioned the refund to the appellant and inasmuch as the duty had been paid through Cenvat credit account, he directed that the appellant can take the credit of refund amount in their Cenvat credit account. The said order of the Assistant Commissioner was reviewed by the Revenue and an appeal was filed by the Revenue before the Commissioner (Appeals) stating that the Assistant Commissioner should have first considered the clause of unjust enrichment by passing a fresh assessment order and thereafter, if applicable, the refund claim should have been considered and sanctioned and, therefore, the refund sanctioned by the Assistant Commissioner was not in order. Vide the impugned order dated 10 -3 -2011, the appellate authority allowed the appeal of the Revenue by setting aside the order of refund sanctioned by the Assistant Commissioner. Simultaneously a show cause notice was also issued for grant of erroneous refund for the same amount and for the same period, which was adjudicated by the Addl. Commissioner and the Addl. Commissioner held that refund of Rs. 30,90,857/ - sanctioned was erroneous, inasmuch as the appellant had not proved that they had not passed on the incidence/burden of duty to their buyers and accordingly, he held that the appellant is liable to pay back the amount of refund sanctioned vide order dated 22 -2 -2012. The said order was challenged by the appellant before the lower appellate authority, who rejected the appeal of the appellant. Thus, there are two orders passed by the appellate authority denying the benefit of the refund to the appellant for the same amount and for the same period. In other words, there is duplication of demand. Aggrieved of this, the appellant is before us.

(2.) THE learned Counsel for the appellant submits that after the assessment of goods provisionally, the goods were stock -transferred from the factory to the depot as the price at the depot was not immediately ascertainable. Subsequently, on ascertaining the price at the depot the appellant had worked out to differential duty liability and it was found that the appellant had paid excess duty and was eligible for refund of the same. The refund claim of the appellant was sent for verification to the jurisdictional Range Superintendent, who after verifying the records maintained by the assessee, confirmed that the appellant had paid excess duty amounting to Rs. 30,90,857/ - for the period January, 2009 to March, 2009. The Superintendent further confirmed that unjust enrichment clause was not involved inasmuch the excess duty paid by the appellant has not been passed on to any other person in terms of Section 11B(2). It is based on the verification report, the refund was sanctioned to the appellant. Once the verification is done by the competent authority in respect of non -passing of duty incidence, the question of denying the same to the appellant on account of unjust enrichment would not arise. Accordingly, he pleads that the impugned order setting aside the order of the adjudicating authority is not sustainable in law. It is also his contention that all the invoices covering the transactions were produced to the Revenue and the jurisdictional authorities have verified these details and only after verification, the refund was sanctioned. Therefore, the Revenue cannot allege that the appellant has not borne the incidence of duty and had passed on the same to somebody else. Accordingly, he pleads for allowing the appeal.

(3.) WE have carefully considered the submissions made by both the sides.