Cce & St, Raipur vs Jindal Steel & Power Limited

[Arising out of Order-in-Appeal No.88/RPR-I/2014 dated 02.04.2014 passed by the Commissioner (Appeals), Customs, Central Excise & Service Tax Deptt., Raipur]

For approval and signature:

HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL) 1. Whether Press reporters may be allowed to see the order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy of the Order?

4. Whether Order is to be circulated to the Departmental authorities? __________________________________________________

CCE & ST, Raipur Appellant

Vs.

Jindal Steel & Power Limited  Respondent

Present for the Appellant : Shri B.B. Sharma, DR Present for the Respondent: Shri H.V. Ghirnikar, Consultant

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 21.05.2015

FINAL ORDER NO. ___54237/2015__

PER: S.K. MOHANTY

Revenue is in appeal against the impugned order dated 02.04.2014 passed by the Commissioner (Appeals), Central Excise, Raipur-I.

2. The brief facts leading to this present appeal are as follows:-

2.1 The respondent herein is a manufacturer of iron and steel products. Excess payment of Central duty has made by the respondent through the SAP mode. They maintained SAP system of accounting for central excise purpose. On 13th and 15th January, 2013, due to certain error in the SAP system, instead of appropriate percentage of duty i.e. 12.36 %, the invoices were generated by showing double the percentage of duty i.e. 24.729% advalorem. On the basis of the duty amount indicated in the said invoices, the respondent had discharged its duty liability. The fact of excess payment of duty was detected by the respondents sister unit at Angul, and the same was pointed out to the Raigarh Unit. Immediately thereafter, the respondent lodged the application before the jurisdictional Central Excise Authorities, claiming refund on excess duty paid on nine numbers of invoices, issued from the Raigarh Unit from 13th January to 15th January, 2013. The refund application filed by the respondent was rejected by the adjudicating authority vide order dated 26.11.2013. Feeling aggrieved by the said order, the respondent preferred appeal before the Commissioner (Appeals), Central Excise, Raipur which was disposed of, by holding that the appellant is eligible to the refund, subject to verification of non-availment of cenvat credit of excess central excise duty, at the consignees end.

3. The said order has been appealed against by the Revenue before this Tribunal, on the ground that the impugned order is erroneous for the reason that the same has not considered the fact that endorsement of invoices is essential for availing appropriate credit by the consignee, and that the aspect of unjust enrichment has not been properly considered by the Commissioner (Appeals).

4. Ld. DR Shri B.B. Sharma appearing for the appellant Revenue while reiterating the grounds of appeal, further submitted that verification of duty paid documents at the consignees end, is required to be done under Rule 3 & 4 of the Cenvat Credit Rules, which the Commissioner (Appeals ) has lost sight too.

5. Percontra, the ld. Chartered Accountant Shri H.V. Ghirnikar, appearing for the respondent submitted that there is no infirmity in the order passed by the Commissioner (Appeals) He further submitted that so far as the eligibility to the refund is concerned, the impugned order has clearly held in their favour. However, the ld. Commissioner (Appeals) has directed verification of the fact by the appropriate authority. So far as the doctrine of unjust enrichment is concerned, the submissions of the ld. Chartered Accountant is that the said aspect has been adequately dealt with by the Commissioner (Appeals) vide paragraph 5.5 of the impugned order, upon proper verification of the relevant records, and as such, the appeal is liable to be set aside.

6. I have heard the ld. Counsels for both the sides and perused the records.

7. I find that the rate of duty applicable, has been stipulated in the Central Excise Tariff Act, 1985 for iron and steel items, falling under Chapter 72, as 12.36 % ad-valorum. However, due to system error the invoice generated, showed the duty as 24.729% which was paid by the respondent. Upon verification of the relevant documents, the Commissioner (Appeals) held that the excess central excise duty paid by the respondent is eligible for refund. Claim of refund on account of excess payment of duty, can only be verified from the cenvat records maintained at the consignees end. Thus, I am of the opinion that findings in the impugned order regarding admissibility of the refund claim, subject to non-availment of cenvat credit at the consignees end, is in conformity with law. Further,It is observed that the verification of cenvat credit records will reveal the position whether the duty burden has been passed on or not. Therefore, the original authority is directed to verify the relevant records to arrive at the conclusion whether the excess amount of excise duty paid by the respondent has been taken by the recipient, as Cenvat credit. If it is found that the recipient has not availed credit on the excess duty paid by the respondent, the doctrine of unjust enrichment cannot apply to the facts of the case and the respondent will be eligible for the refund.

8. The appeal is disposed of in the above terms. The cross appeal filed by the respondent is also disposed of.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY) MEMBER (JUDICIAL)

Anita

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