Pgo Processors (P) Ltd. Vs. Commissioner of Central Excise - Court Judgment

Excerpt:

.....which the commissioner (appeals) has rejected their claim for refund of duty.2. shri k.k. anand, learned advocate, submitted that the appellants manufacture processed fabrics on job work basis; that on insistence by the department they started paying duty on the price at which the fabrics is sold by the principal manufacturer on whose account they are doing the job work and not on the basis of principles laid down by the supreme court in ujagar prints case; that they subsequently filed claims for refund of duty which has been rejected by the assistant collector on the ground that the show cause notice no.v/55/15/of/96-98, dated 15-1-1999 had been issued to them which is under adjudication and the matter whether they are required to discharge the duty liability on the basis of cost or on the basis of sale value has not been settled; that the commissioner (appeals) had also agreed with the finding of the assistant commissioner as he has held that the duty paid under protest can be refunded only when the basic issue is decided in their favour. the learned advocate, further mentioned that the show cause notice has so far not been adjudicated upon by the adjudicating authority......

Judgment:

1. M/s. PGO Processors Pvt. Ltd. have filed the present Appeal against Order-in-Appeal No. 442/2002, dated 24-6-2002 by which the Commissioner (Appeals) has rejected their claim for refund of duty.

2. Shri K.K. Anand, learned Advocate, submitted that the Appellants manufacture processed fabrics on job work basis; that on insistence by the Department they started paying duty on the price at which the fabrics is sold by the principal manufacturer on whose account they are doing the job work and not on the basis of principles laid down by the Supreme Court in Ujagar Prints case; that they subsequently filed claims for refund of duty which has been rejected by the Assistant Collector on the ground that the show cause notice No.V/55/15/OF/96-98, dated 15-1-1999 had been issued to them which is under Adjudication and the matter whether they are required to discharge the duty liability on the basis of cost or on the basis of sale value has not been settled; that the Commissioner (Appeals) had also agreed with the finding of the Assistant Commissioner as he has held that the duty paid under protest can be refunded only when the basic issue is decided in their favour. The learned Advocate, further mentioned that the show cause notice has so far not been adjudicated upon by the Adjudicating Authority. Learned Advocate also emphasized that the issue regarding payment of duty by a job worker on processed fabrics stands settled by the decision of the Supreme Court in the case of Ujagar Prints v. Union of India - 1989 (39) E.L.T. 493 and as such the Appellants are eligible for refund of duty paid in excess by them under protest. We also heard Ms. Charul Baranwal, learned Senior Departmental Representative.

3. We have considered the submissions of both the sides. It is not in dispute that a show cause notice has been issued by the Department to decide the basis on which the duty has to be discharged by the Appellants. It is also not in dispute that the said show cause notice is still pending adjudication. As the issue regarding determination of assessable value is pending finalisation by the Department, the Assistant Commissioner should not have rejected the refund claim on this ground. We, therefore, remand the matter to the Assistant Commissioner to decide the refund claim afresh after the show cause notice has been adjudicated upon by proper authority. The Appeal is thus allowed by way of remand.