M/S. Ashu Organics (I) Pvt. Ltd vs Commissioner Of Central Excise, ...

[Arising out of Order-in-Appeal No. SB/268 & 269/Th-I/10 dtd. 8/12/2010 passed by the Commissioner (Appeals), Central Excise, Mumbai Zone-I]

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? =======================================================

M/s. Ashu Organics (I) Pvt. Ltd. : Appellants

VS

Commissioner of Central Excise, Thane-I : Respondent

Appearance

Shri R. V. Shetty, Advocate for the Appellants Shri N.N. Prabhudesai, Superintendent (A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 29/6/2015 Date of decision: 29/6/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in-Appeal No. SB/268 & 269/Th-I/10 dtd. 8/12/2010 passed by the Commissioner (Appeals), Central Excise, Mumbai Zone-I.

2. The facts of the case is that the Appellant filed a rebate claim for an amount of Rs. 5,82,202/- towards duty paid on the export clearance made under ARE1 No.33 dated 24.02.2009. At the time of export the rate of duty on the export goods was attracting Basic @8% + Education cess, however the Appellant paid duty @10% + Education cess. accordingly paid excess duty. After filing the rebate claim in respect of whole amount of duty of Rs. 5,82,202/- paid by the Appellant, they submitted a letter dated 28.05.2009 wherein it was requested to the sanctioning authority to sanction their rebate claim as per the revised rate of duty i.e. @8% instead of @10% paid by them. The Assistant Commisssioner taking into consideration the Appellants letter dated 28.05.2009, sanctioned rebate of Rs.4,65,761/-(equivalent to 8%+ Ed. cess) vide Order-in-Original No.R-263/09-10 dated 24.06.2009. Thereafter the Appellant filed a separate refund claim for difference amount of Rs.1,16,441/- which was sanctioned by the Assistant Commissioner vide Order-in-Original No.R-1041/09-10 dated 7.12.09. Aggrieved by this Order dated 7.12.09 the Revenue filed an appeal before the Commissioner (Appeals) on the ground that rebate application of the Appellant for the whole amount of Rs.5,82,202/- was disposed of by the Assistant Commissioner by sanctioning the part amount of rebate and if at all there is any grievance of the Appellant it is that Order dated 24.06.2009 against which appeal should have been filed. Since the said order-in-original No.R-263/09-10 dated 24.06.2009 was not challenged, the same attained finality, therefore the subsequent Order No.R-1040/09-10 dated 7.12.2009 passed by the Assistant Commissioner is not legal and proper. The Ld. Commissioner (Appeals) agreeing with the grounds of the Appeal, allowed the Appeal of the Revenue by the impugned order dated 8.12.2010. Being aggrieved with the said impugned order, the Appellant is before me.

3. Shri R.V. Shetty, Ld. Counsel for the Appellant submits that the impugned order passed by the Ld. Commissioner (Appeals) is perverse and illegal. He submits that the Adjudicating authority rightly sanctioned their refund of Rs. 1,16,441/- for the reason that for this amount no previous order was passed, therefore there was no question of filing the appeal against the order dated 24.06.2009 by which the Assistant Commissioner sanctioned the rebate of Rs. 4,65,761/-. He further submits that after filing initial rebate claim for Rs. 5,82,202/-, when they realized that rebate is admissible only as per the applicable rate of duty i.e. 8% and not 10% paid by them, they made request vide their letter dated 28.05.2009 to the sanctioning authority to sanction their rebate as per the revised rate i.e. @8%. Thus, in this manner, the Appellant withdrawn the rebate for an amount of Rs. 1,16,441/-. The Assistant Commissioner considering this request and after recording the same in the order, sanctioned the rebate for Rs. 4,65,761/- only. Therefore the Assistant Commissioner has not passed any order in respect of Rs. 1,16,441/- in the rebate sanction order dated 24.06.2009 wherein rebate of Rs. 4,65,761/- was sanctioned. In this position, there was no occasion available to the Appellant to file any appeal by challenging the order dated 24.06.2009. Therefore, the contention of the Revenue that the order dated 24.06.2009 should have been appealed against, is absolutely wrong and on that ground setting aside the Order-in-Original dated 07.12.2009 is not correct and consequently the impugned order is not sustainable.

4. On the other hand Shri N.N. Prabhudesai, Ld. Superintendent (AR) appearing for Revenue, reiterates the findings of the impugned order.

5. I have carefully considered the submissions made by both the sides.

6. The Ld. Commissioner (Appeals) set aside the Order-in-Original dated 7.12.09 on the ground that since the Appellant has not challenged the first Order-in-Original dated 24.06.2009, it attained finality and refund by separate application can not be claimed. I find that the Appellant after filing rebate claim for Rs. 5,82,202/-, informed the sanctioning authority that their claim be sanctioned as per revised rate (which is 8%BED as against 10% BED paid by the Appellant) vide their letter dated 28.05.2009 wherein the Appellant submitted as under:

Please refer to our Rebate Claim against ARE-1 No. 33/2008-09 and Export Excise Invoice No.35 both dated 24.02.2009 for duty amounting to Rs. 5,82,202/-.

We have paid the duty @rate of 10% BED as per the existing rate of excise duty. However, As per the C.Ex Notn. No. 4/2009 dated 24.02.2009 the basic excise duty has been reduced to 8% BED from existing Excise rate of duty of 10%. We have received this information only after our clearances of the materials for export.

Now this resulted in excess payment of Excise Duty Amounting to Rs.1,16,441/-.

We therefore request you to sanction our Rebate Claim as per revised rate of excise duty.

From the above letter it is amply clear that the Appellant themselves proposed to the sanctioning authority to restrict the rebate claim as per revised rate i.e. 8% BED by which rebate amount comes to Rs. 4,65,761/- and the same amount was sanctioned by the Adjudicating Authority. This clearly shows that though the Appellant initially filed the rebate claim for Rs.5,82,202/- but subsequently, before sanctioning the same, restricted the claim to Rs. 4,65,761/-. In other words the claim of the Appellant was for Rs. 4,65,761/- and not for Rs. 5,82,202/-. Therefore the Assistant Commissioner passed order for sanction of rebate only for the amount i.e. Rs.4,65,761/- what was claimed by the Appellant and in the first order dated 24.06.2009 no order was passed in respect of the amount of Rs. 1,16,441/- as the same stood withdrawn by the Appellant. In regard to the amount of Rs.1,16,441/- the Assistant Commissioner in his order dated 24.06.2009 given finding as reproduced below:

I find that the claimant vide letter dated 28.05.09 have submitted they have paid duty @10% BED but as per Notification No. 04/09 dated 24.02.09 they were required to pay the duty @8% BED only, which resulted in excess payment of Rs.1,16,441/- and finally requested to sanction the rebate claim as per revised rate of duty. Therefore, as per assessees request the rebate claim is restricted to Rs.4,65,761/-. From the above clear finding, the Assistant Commissioner restricted the claim to Rs. 4,65,761/- only on the request of the Appellant, hence there is no question of filing appeal by the Appellant against such finding. In my view the Ld. Commissioner is absolutely wrong in contending that the order for non sanction of rebate of Rs. 1,16,441/- was appealable.

It is observed that since the Appellant paid duty @10% BED instead of effective rate of 8% BED, the difference amount is not part of the rebate, thats why Appellant filed a separate claim for that and the Assistant Commissioner sanctioned the refund of the same by way of cenvat credit and not by way of cash for the reason that the said difference amount of Rs.1,16,441/- is not treated as rebate but excess payment, therefore the same was sanctioned as refund of excess payment of duty.

6.1 As per my above discussions, I am of the considered view that the Appellant was not required to file appeal against the order dated 24.06.2009 and they rightly filed a separate refund in respect of Rs. 1,16,441/- and the Assistant Commissioner is absolutely correct in sanctioning the same by way of recredit in the cenvat account. Therefore the impugned order is not sustainable, the same is set aside and the order-in-original dated 07.12.2009 is restored. The Appeal of the Appellant is allowed with consequential relief, if any, in accordance with law.

(Operative part pronounced in court)

Ramesh Nair Member (Judicial)

sk

7 APPEAL NO. E/407/11 & E/85009/13 -MUM