Suresh Steel Tubes Pvt. Ltd. Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:
1. the appellants have challenged the order-in-appeal no. 84/2004-c.e.dated 21-4-2004 passed by the commissioner of central excise (appeals) confirming the rejection of refund claim of rs. 3,96,679/- debited on 9-1-2002 in respect of activity of slitting of cr/hr coils into strips of smaller size on job work basis. latter, this activity was treated as not an activity amounting to manufacture in terms of apex court judgment rendered in the case of technoweld industries v. cce as the investigation, they filed the refund claim within the appropriate time limit. the department rejected the refund claim on the premise that at the time when they debited the duty, there was a cbec circular which had clarified that such activity amounted to manufacture and on that premise, the refund claim has been rejected. this is under challenge.2. the appellant has filed a miscellaneous application for change of cause title on the merger of the appellant's factory with m/s. suresh steel tubes pvt. ltd. they are now to be treated as m/s. suresh steel tubes pvt. ltd. the appellants have produced supporting evidence for causing change of cause title. the miscellaneous application is allowed.4. i find that the appellants had deposited the amounts during investigation. it is not a case where the duty was required to have been paid, as the activity of slitting the hr coils into smaller size was under challenged. ultimately the apex court held that such activity did not amount to manufacture. the refund application was pending and therefore, the question of appropriating the amounts on the basis of the cbec circular holding the activity as manufacture is a wrong presumption and is not sustainable in law. it is also seen from records that the commissioner (a) has dropped the proceedings for recovery of duty on this very ground. therefore, the amount paid during the investigation was not an amount of duty paid but it is only a deposit.such deposit are required to be refunded when duty is not liable to be paid, as held by the judgment rendered by the larger bench in the case of jayant glass inds. (p) ltd. v. cce . this view is also supported by the judgment of gujarat high court rendered in the case of park international ltd. v. uoi . the appellant's claim for payment of interest on such deposit is also a justifiable claim. the impugned order is set aside and their claim for refund of the amount under deposit is required to be made within one month from the receipt of this order along with interest. appeal is allowed with consequential relief.

Judgment:
1. The appellants have challenged the Order-in-Appeal No. 84/2004-C.E.dated 21-4-2004 passed by the Commissioner of Central Excise (Appeals) confirming the rejection of refund claim of Rs. 3,96,679/- debited on 9-1-2002 in respect of activity of slitting of CR/HR coils into strips of smaller size on job work basis. Latter, this activity was treated as not an activity amounting to manufacture in terms of Apex Court judgment rendered in the case of Technoweld Industries v. CCE As the investigation, they filed the refund claim within the appropriate time limit. The Department rejected the refund claim on the premise that at the time when they debited the duty, there was a CBEC Circular which had clarified that such activity amounted to manufacture and on that premise, the refund claim has been rejected. This is under challenge.

2. The appellant has filed a Miscellaneous Application for change of cause title on the merger of the appellant's factory with M/s. Suresh Steel Tubes Pvt. Ltd. They are now to be treated as M/s. Suresh Steel Tubes Pvt. Ltd. The appellants have produced supporting evidence for causing change of cause title. The Miscellaneous Application is allowed.

4. I find that the appellants had deposited the amounts during investigation. It is not a case where the duty was required to have been paid, as the activity of slitting the HR coils into smaller size was under challenged. Ultimately the Apex Court held that such activity did not amount to manufacture. The refund application was pending and therefore, the question of appropriating the amounts on the basis of the CBEC Circular holding the activity as manufacture is a wrong presumption and is not sustainable in law. It is also seen from records that the Commissioner (A) has dropped the proceedings for recovery of duty on this very ground. Therefore, the amount paid during the investigation was not an amount of duty paid but it is only a deposit.

Such deposit are required to be refunded when duty is not liable to be paid, as held by the judgment rendered by the Larger Bench in the case of Jayant Glass Inds. (P) Ltd. v. CCE . This view is also supported by the judgment of Gujarat High Court rendered in the case of Park International Ltd. v. UOI . The appellant's claim for payment of interest on such deposit is also a justifiable claim. The impugned order is set aside and their claim for refund of the amount under deposit is required to be made within one month from the receipt of this order along with interest. Appeal is allowed with consequential relief.