Commissioner Of Central Excise & ... vs M/S. Narinha Sahakari Sakhar Karkhana ...

[Arising out of Order-in-Appeal No. RKR (178) 260/07 dtd. 1/5/2008 passed by the Commissioner (Appeals) of Central Excise & Customs, Aurangabad]

For approval and signature:

Honble Mr Ramesh Nair, Member (Judicial)

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1. Whether Press Reporters may be allowed to see : No 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 : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

Commissioner of Central Excise & Customs, Aurangabad : Appellants

VS

M/s. Narinha Sahakari Sakhar Karkhana Ltd. : Respondent

Appearance

Shri. Sanjay Hasija, Superintendent (A.R.) for the Appellants None for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 30/6/2015 Date of decision: 30/6/2015

ORDER NO.

Per : Ramesh Nair

The appeal is directed against Order-in-Appeal No. RKR (178) 260/07 dtd. 1/5/2008 passed by the Commissioner (Appeals) of Central Excise & Customs, Aurangabad, wherein the Ld. Commissioner allowed the appeal filed by the appellant.

2. The fact of the case is that appellant deposited sum of Rs. 43,31,000/- and Sugar cess of Rs. 8,54,006/- only in anticipation of clearances of free sale sugar of quantity of 61,000 quintal, in view of Director of Sugars Authorization certificate vide NO. 4-10(110)/99-SC II dated 3/3/2006. Since the respondent could not clear sugar bags for free sale, director of sugar vide their order No. 4-10(110)/99-SC-II/112 dated 26/3/2007 granted further extension of sixty days i.e. up to 25/5/2007 from the date of issue of this re-validation order. Since the respondent could not clear the said sugar even up to 25/5/2007, the director further extended validity of period for further 90 days from the date of issue of order dated 15/6/2007. Respondent were able to clear 1739 quintal of free sale sugar as evidenced from invoices 200-322. However, no clearance was effected 2006 onwards. Hence the respondent filed refund claim for excess amount of duty deposited in anticipation of the clearances, the said refund was rejected by the Jurisdictional officer on the ground that ERI returns shown clearance of 61,000 quintals during subject period and also on ground such as it is not permitted to deposit duty in advance without mentioning the invoices number, actual stock could not be verified by the field officer. The respondent not able to prove that quantity of 43671 quintals of goods has not been cleared and release order of director of sugar have no relevance. Aggrieved by the adjudication order, respondent filed appeal before the Commissioner (Appeals) who after going through not only the records but also from invoices, has conducted verification in the factory of the respondent and as per report given by the Superintendent (Appeals) appeal was allowed by the impugned order dated 1/5/2008, Aggrieved by the said impugned order Revenue is before me.

3. Shri Sanjay Hasija, Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the ground of the appeal. He further submits that though there is verification by the Superintendent (Appeals) however from the report it is not coming out that physical stock was verified. Since physical stock was not verified it cannot be ascertained whether duty said to have been paid in excess or the payment made against clearance of the goods. He further submits that since ER -1 shows 61,000 quintals, therefore whatever duty was paid is correct and no refund arises.

4. When the matter is called for hearing, none appeared on behalf of the respondent. On the last occasion A.R. was directed to arrange to serve notice to the respondent, he stated that Jurisdictional officer made efforts to deliver notice but factory was closed, no responsible person was available, therefore notice could not be delivered. In this position, I have no option except taking the matter to disposal on the basis of the records available.

5. I have carefully considered the submission made by Ld. A. R. and perused records.

6. From the impugned order, I find that Ld. Commissioner (Appeals) allowed the appeal of the Respondent by allowing the refund on the basis of following findings:

Most of the relevant invoices were shown to me. I find that the invoices after 322 are blank. The clearances in May have been effected under invoice No. 200 to 322 involving sugar of a qty. of 17329 Qtls. Only. There is no claearance in June 2006 & onwards. The matter was investigated by the Superintendent (A) and he has submitted a report stating that the appellant has paid in excess. In this report, this official has indicated that,  I have verified RG 1 Register for the month of May 2006 and found Sugar clearance Quantity of November 2006 & December 2006 verified and found Sugar production and clearance. Duty paid vide TR 6 challan No. 1 & 2 of dated 05.01.2007 for Rs.27,96,249/- only. The above view is reasonably in consonance with the Stock Position as certified by the Range Superintendent on 21-11-2007. Items showing Season wise Levy & Non-Levy Sugar Stock (as on 31.12.2006 & 31.03.2007) Name of factory Narsinha SSK Ltd. Lohgaon, Tq & Dist. Parbhani Shortname Lohgaon

Code No. 39201

Sr. No. Sugar Season Levy (Qtl.) Non-Levy (Qtl.) Total (Qtl.) 1 1998-99 0 16342 16342 2 1999-2000 0 42251 42251 3 2000-01 0 13028 13028 4 2001-02 0 18351 18351 5 2002-03 0 21473 21473 6 2003-04 0 12059 12059 7 2004-05 0 0 0 8 2005-06 0 0 0 9 2006-07 as on 31.12.06 6290 19383 25673 10 2006-07 as on 31.03.07 5015 108739 113754

The matter regarding undue enrichment has been examined at lower level & hence there is no discussion on these aspects. Considering the above, and considering the fact that grounds for rejection of refund are neither legally tenable nor sound the appellants case for refund merits consideration and in the absence of any credible contrary evidence, the appeal is allowed.

I find that respondent filed refund claim on the ground that as per the order of the Director of the Sugar whatever quantity was allocated to them, they have paid duty on the total quantity of 61,000 quintals, however subsequently they could not clear entire quantity, they could clear only 17329 quintals. The period extended for supply of its remaining quantity was also lapsed. Therefore as against 61,000 quintals the respondent could clear 17,329 quintals, hence excise duty paid by the respondent is in excess to what was payable and refund for an amount of Rs. 37,12,051/- arises. Refund was rejected by the Adjudicating authority only on the ground E.R.1 return shows clearance of quantity of 61,000 quintals and accordingly whatever duty was paid was correct and no refund arises. I find that superintendent (Appeals) has conducted verification of the records by visiting factory of the respondent and from his report it is found that on verification of RG 1 register, invoices, etc. it was established that against 61,000 quintals for which duty was paid, only quantity of 17329 quintals were cleared and even no further production has taken place. With this undisputed facts, it is clear that the respondent has paid excess duty and they were legally entitle for refund. In view of this position, I am of the considered view that Ld. Commissioner after duly verifying of the records and obtaining report from superintendent (Appeals) allowed the appeal holding that respondent is entitle for the refund claim. I do not find any infirmity in the impugned order, the same is upheld. Revenues appeal is dismissed.

(Dictated in court)

Ramesh Nair Member (Judicial)

sk

7 E/915/08