Commissioner Of Central Excise vs N.V.K. Mohd Sultan Rowther & Sons

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI

Appeal No. E/494/2003

[Arising out of Order-in-Appeal No.162/2003 dt. 2.5.2003 passed by the Commissioner of Central Excise (Appeals), Madurai]

Commissioner of Central Excise, Madurai Appellant

Versus

N.V.K. Mohd Sultan Rowther & Sons Respondent

Appearance:

Shri R. Subramaniyan, AC (AR) For the Appellant

Shri M. Kannan, Advocate For the Respondent

CORAM :

Honble Shri R. Periasami, Technical Member Honble Shri P.K. Choudhary, Judicial Member

Date of Hearing/Decision : 11.9.2015

FINAL ORDER No.41211/2015

Per R. Periasami

This appeal is taken up for de novo consequent on the Hon'ble High Court's order dt. 20.1.2015.

2. The case relates to refund claim of Rs.33,975/- claimed by the respondent on account of excise duty paid during the period 24.11.98 to 30.11.98 on account of reduction of rate of duty of betel nut powder by Notfn 25/98-CE dt. 24.11.98 wherein the duty was reduced from 18% to 15%. Since the appellant inadvertently paid duty @ 18% instead of 15% for 7 days as they were not aware of notification, they claimed refund. The refund was initially rejected and on appeal, the Commissioner (Appeals) had allowed the appeal with consequential relief. Against this order, the Revenue filed appeal. The Revenue's appeal was dismissed by this Tribunal's Final Order No.1478/2007 dt. 7.12.2007 against which the Revenue preferred appeal before CMA before High Court of Madurai Bench. The Hon'ble High Court in CMA (MD) No.760 of 2008 by their order dt. 20.1.2014 set aside the order and remanded the matter to Tribunal on limited issue to reconsider the points put forth by either side.

3. Ld. A.R reiterates the grounds of appeal and submits that Revenue's main grounds of appeal is that appellant is not eligible for refund of excess duty paid and the adjudicating authority has rightly rejected the refund.

4. On the other hand, Ld. Advocate submits that in this case where they have paid excise duty and claimed refund of only the duty difference between 18% and 15% and they were not aware of the reduction of duty immediately. Once they came to know the reduction of duty immediately they raised credit notes and returned excise duty recovered from the dealers. He relied on the following decisions :-

(1) Sunrays Engineers Pvt. Ltd. Vs CCE Jaipur 2015 (318) ELT 583 (SC) (2) CCE Mangalore Vs Solaris Chemtech Ltd. 2011 (273) ELT 191 (Kar.) (3) CCE Vs Addison & Co.

1997 (93) ELT 429 (Tri.)

5. After hearing both sides, we find that Revenue is on appeal against allowing refund by Commissioner (Appeals). We find that Commissioner (Appeals) has rightly relied High Court's order in the case of CCE Vs Addison & Co.(supra). Revenue's grounds is not on excisability or manufacture of beetle nut only on the refund allowed by the LAA. On merits, we find that it is not a refund which is arising out of any excess payment arising out of any dispute on value or quantity of discount etc. but on account of reduction of rate of duty on bettle nut powder vide Notification 35/98 dt.24.11.98 where the rate of duty was revised from 18% to 15% on the beetle nut powder which came into effect from 24.11.98. By virtue of this notification, appellants were required to pay duty @ 15% instead of 18%. When the rate of duty was reduced on 24.11.98 applicable rate was only 15%. The amount paid in excess of 15% between 24.11.98 and 30.11.98 is not duty and not due to the Government and the same is liable to be refunded to the respondent. The Hon'ble High Court in the case of Sunrise Engineers Vs CCE Jaipur (supra) clearly held that on account of reduction of rate of duty by any subsequent notification, appellants are rightly eligible for refund and also held that no unjust enrichment clause would be applicable. The Hon'ble High Court of Madras decision in the case of Addison & Co.  2001 (129) ELT 44 (Mad.) is squarely applicable to the present case. In view of the above High Court decision, the respondents are eligible for the refund. We do not find any infirmity in the order of LAA. Accordingly, the impugned order is upheld and the Revenue appeal is rejected.

(Dictated and pronounced in open court)

(P.K. CHOUDHARY) (R. PERIASAMI) JUDICIAL MEMBER TECHNICAL MEMBER

gs 3