2018 (9) TMI 1480 – CESTAT NEW DELHI – TMI – Refund claim – refund was claimed for the non-operative period of the machine during the month that was found 3rd May, 2016 to 31st May, 2016 – refund rejected on the ground that N/N. 17/2007-CE does not have any provision with regard to reduction in the amount of the duty to be deposited even if a particular machine become inoperative during the period of any month – Compounded Levy Scheme.
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Held that:- The matter is no longer res-integra as it has already been decided in the case of Jupiter Industries vs. CCE, Jaipur [2006 (4) TMI 164 – HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR], where it was held that The direction of the Tribunal to refund excess amount received in respect of machine which had ceased to function during the month of July to August also does not call for any interference.
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Since in this case one machine being inoperative for the month of after payment of central excise duty; has not produced any goods an
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al excise duty of ₹ 3,60,000/- @ ₹ 40,000/- per cold rolled Patta Patti machine for the 9 machines which were installed in the factory premises of the appellant. The assessee/appellant vide his letter dated 02/05/2016 informed the Office of Superintendent, Central Excise Range, Jodhpur that one of the cold rolled Patta Patti machine will not be functional for the rest of the month. The Jurisdictional Range Office vide their letter No. CE/20/07/PSL/00/446 dated 03/05/2016 granted the permission for keeping the one cold rolled machine inoperative. 2. The appellant has filed for refund of the duty for the non-operative period of the machine during the month that was found 3rd May, 2016 to 31st May, 2016 and the refund claim of ₹ 37,419/- was filed with the concerned Assistant Commissioner. The Adjudicating Authority namely the Divisional Assistant Commissioner rejected the refund claim of ₹ 37,419/- on the ground that Notification No. 17/2007-CE does not have any p
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duty on pro-rata basis for the working days is not available under the scheme. It has been the argument of the learned Advocate appearing for the appellant that the stand taken by the Department for rejected their refund claims is not legally sustainable. It has been submitted that Section 3 of the Central Excise Act, 1944 provides that duty of Central Excise is leviable on the manufacture of excisable goods and the Department can only collect Central excise duty on the machines manufacturing excisable goods. It is argued that even under the compounded levy scheme of Central excise duty, the machines which are non-functional cannot put for charging excise duty. The learned Advocate has cited several judgments of the higher courts including a judgment in the case of Jupiter Industries vs. CCE, Jaipur – 2001 (137) E.L.T. 1018 (Tri.), wherein it has been provided that the refund of excess central excise duty paid need to be refunded in case the machine remains inoperative. It has further
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he machine became inoperative on 2nd May, 2016 and by that time advance central excise duty for the month of May, 2016 was already deposited for all the 9 machines and therefore it resulted in excess payment of amount of ₹ 37,419/-. The appellant have filed the refund of the same which was got rejected by the Assistant Commissioner on the ground that Notification No. 17/2007-CE dated 01/03/2007 does not have any provision for refund of duty deposited in advance once the assessee have started availing the assessment of duty under the compounded levy scheme. 6. The matter is no longer res-integra as it has already been decided in the case of Jupiter Industries vs. CCE, Jaipur (supra) and in the case of ACME Industries vs. CCE, Jaipur – II – 2011 (269) E.L.T. 523 (Tri. – Del.). 7. The relevant extract of the relevant paras of Hon ble Rajasthan High Court order in case of CCE, Jaipur – II vs. Jupiter Industries – 2006 (206) E.L.T. 1195 (Raj.) is reproduced here below :- 23. It goes w
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in relation to the machine which was not in existence, the question of passing on duty to consumers of existing goods can arise so as to require the invocation of principle of unjust enrichment to deny refund. Therefore, there is no justification for taking the view that since the tax has been paid under the special provision it is not subject to refund. Refund is a consequence of recovery of duty which is not leviable under the provisions of taxing statute or of excess payment of Duty. In given circumstances, such excess collection of Duty may be refused to be refunded, if it results in unjust enrichment because passing of duty to buyers of goods. It depends on furnishing satisfactory proof by the manufacturer that such duty has been passed on to buyers. However, in case like the present where goods have not at all been manufactured and yet on estimated basis of imaginary production Duty has been demanded, the question of passing of such duty collected from the assessee to buyers of t
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