Indian Plywood Mfg. Co. Ltd. Vs. Collector of C. Ex. - Court Judgment

Excerpt:
1. in this appeal filed by m/s. india plywood mfg. co. ltd., the issue for our consideration is whether when as a consequence of classification, decision in favour of the assessee refund has to be granted, then whether the assessable value has to be re-determined. the goods under consideration were classified under item no. 16b and duty was paid by the assessee accordingly. subsequently, it was held that the goods were classifiable under item no. 68; the assessee filed a refund claim which was paid to them. subsequently the department alleged that while sanctioning refund, the assessable value should have been re-determined and to the extent of the refund, the excise duty should have been charged and to that extent, refund amount should have been reduced.2. the ld. collector of central excise (appeals), madras rejected the appeal of the appellants before him, on the ground that it was not a case of reopening of the assessment but a case of exclusion of excise amount charged by the assessee in the value.3. the matter was fixed for hearing on 10-5-1996. the appellants had requested to decide the case on merits; they had filed written submissions. shri m. hazal mohideen, ld. jdr is present for the respondent/revenue. he submitted that the order passed by the ld.collector of central excise (appeals) is correct and that the appellants had no case.4. we have carefully considered that matter. there is no dispute that the appellants were eligible for refund which had been paid to them.the only ground on which the ld. collector of central excise (appeals) has ruled against the appellants is that if excise duty is not charged on the refund, it will amount to retaining the excise duty by the assessee. we find that the matter is covered by the bombay high court's decision in the case of roche products ltd. v. union of india as reported in 1991 (51) e.l.t. 238 (bom.). the hon'ble bombay high court had held that there was no provision under section 4 of the act which authorises the asstt. collector to levy duty on the amount of refund.they had stated that in that case the asstt. collector had overlooked that the refund was claimed because under erroneous orders, the department recovered the excise duty from the company and that as soon as those orders are set aside, the company would be entitled to get the refund and this refund could not be denied to them.5. we consider that the facts of this case are similar to those before the hon'ble bombay high court, in the case referred to above. in the circumstances, we find that the view taken by the ld. collector of central excise (appeals) madras is not correct. as a consequence, the appeal is allowed.

Judgment:
1. In this appeal filed by M/s. India Plywood Mfg. Co. Ltd., the issue for our consideration is whether when as a consequence of classification, decision in favour of the assessee refund has to be granted, then whether the assessable value has to be re-determined. The goods under consideration were classified under Item No. 16B and duty was paid by the assessee accordingly. Subsequently, it was held that the goods were classifiable under Item No. 68; the assessee filed a refund claim which was paid to them. Subsequently the department alleged that while sanctioning refund, the assessable value should have been re-determined and to the extent of the refund, the excise duty should have been charged and to that extent, refund amount should have been reduced.

2. The ld. Collector of Central Excise (Appeals), Madras rejected the appeal of the appellants before him, on the ground that it was not a case of reopening of the assessment but a case of exclusion of excise amount charged by the assessee in the value.

3. The matter was fixed for hearing on 10-5-1996. The appellants had requested to decide the case on merits; they had filed written submissions. Shri M. Hazal Mohideen, ld. JDR is present for the respondent/Revenue. He submitted that the order passed by the ld.Collector of Central Excise (Appeals) is correct and that the appellants had no case.

4. We have carefully considered that matter. There is no dispute that the appellants were eligible for refund which had been paid to them.

The only ground on which the ld. Collector of Central Excise (Appeals) has ruled against the appellants is that if excise duty is not charged on the refund, it will amount to retaining the excise duty by the assessee. We find that the matter is covered by the Bombay High Court's decision in the case of Roche Products Ltd. v. Union of India as reported in 1991 (51) E.L.T. 238 (Bom.). The Hon'ble Bombay High Court had held that there was no provision under Section 4 of the Act which authorises the Asstt. Collector to levy duty on the amount of refund.

They had stated that in that case the Asstt. Collector had overlooked that the refund was claimed because under erroneous orders, the department recovered the excise duty from the company and that as soon as those orders are set aside, the company would be entitled to get the refund and this refund could not be denied to them.

5. We consider that the facts of this case are similar to those before the Hon'ble Bombay High Court, in the case referred to above. In the circumstances, we find that the view taken by the ld. Collector of Central Excise (Appeals) Madras is not correct. As a consequence, the appeal is allowed.