Custom, Excise & Service Tax Tribunal
Paradise Steels Pvt Ltd vs Jaipur-I on 10 July, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi - 110 066.
Principal Bench, New Delhi
COURT NO. I
DATE OF HEARING : 10/07/2018.
DATE OF DECISION: 10/07/2018.
Excise Appeal No. 51414 of 2018
[Arising out of the Order-in-Appeal No. 14 (AK)/CE/JPR/2017
dated 09/01/2018 passed by The Commissioner (Appeals),
Central Excise & Central Goods and Service Tax, Jaipur.]
M/s Paradise Steels Pvt. Ltd. Appellant
Versus
CCE & CGST, Jaipur Respondent
Appearance None (written submission) - for the appellant. Ms Tamanna Alam, Authorized Representative (DR) - for the Respondent.
CORAM: Hon'ble Shri Anil Choudhary, Member (Judicial) Hon'ble Shri C.L. Mahar, Member (Technical) Final Order No. 52715/2018 Dated : 10/07/2018 Per. C.L. Mahar :-
The brief fact of the case are that the appellant are engaged in manufacture of S.S. Patta Patti falling under Chapter Heading 72 of the Central Excise Tariff Act, 1985. The appellant have been working under the special procedure for compound levy scheme for stainless steel Patta Patti prescribed vide
2 EX/51414 of 2018 Notification No. 17/2007-CE dated 01/03/2007 issued under Rule 15 of the Central Excise Rules, 2002. It is a matter of record that as per the conditions of the above-mentioned Notification No. 17/2007-CE dated 01/03/2007, the appellant has deposited compounded central excise duty of Rs. 3,60,000/- @ Rs. 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 Rs. 37,419/- was filed with the concerned Assistant Commissioner. The Adjudicating Authority namely the Divisional Assistant Commissioner rejected the refund claim of Rs. 37,419/- on the ground that Notification No. 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. The assessee has gone in appeal before learned Commissioner (Appeals) who has taken up all the three refund claims details given as below :-
3 EX/51414 of 2018
SR. Appeal No. OIO No.
and Amount of
NO. date refund involved
(Rs.)
1. APPL/JPR-I/CE/JD/509/X/ 204/2016-R 37,419/-
2016 dated
04/07/2016
2. APPL/JPR-I/CE/JD/634/XI/ 267/2016-R 18,064/-
2016 dated
26/10/2016
3. APPL/JPR-I/CE/JD/579/XI/ 222/2016-R 18,064/-
2016 dated
12/09/2016
The learned Commissioner vide his order dated 09/01/2018 rejected the refund claim of the appellant on the ground that they have not opted for first time under compounded levy scheme as such they are required to pay full duty during the said month and they are not entitled for refund for the machine remaining inoperative for a part of month or days. It was concluded that the facility of abatement in the compounded monthly 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 4 EX/51414 of 2018 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 been elaborated by the learned Advocate that they have given due intimation of machines remaining inoperative on 2nd May, 2016 and same was duly accepted and approved by the Range Superintendent. It cannot be the case of the Department that when the machine is not manufacturing any goods can be put for charging central excise duty.
3. We have also heard the learned AR who has reiterated the findings of the order-in-original of the Adjudicating Authority.
4. We have heard both sides and perused the record of the appeal.
5. It is a matter of record that the appellant have deposited duty of central excise under the compounded levy scheme in the S.S. Patta Patti manufacture in advance for the month of May 2016. After a few days one of the machine became inoperative and due information was given to the concerned Range Superintendent who has acknowledged and allowed that one machine out of the 9 machines declared by the appellant can remain inoperative during the month of May, 2016. Since, the 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 5 EX/51414 of 2018 in excess payment of amount of Rs. 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 without saying that, if in any particular month, no machine is operated and no production had taken place, there cannot be any levy of excise Duty. The manufacture of goods is condition precedent for charging of excise duty without which no levy can be made. Therefore, the rule cannot be made to go beyond the scope of charging provision. On the undisputed premises that no production had taken place from the cold rolling machine which has been removed on 29th May, 1998. In other words, no production has been taken place in respect of cold rolling machine which ceased to operate before the first July, 1996, no review could have been allowed in respect of estimated production in that machine. This is the simple logic which prevailed within the Tribunal and in our opinion rightly. No contrary view can be taken from the reading of the Rules also.
6 EX/51414 of 2018 We are, therefore, of the opinion that the conclusion reached by the Tribunal was valid.
24. Moreover, when there is no production of any articles 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 the non- existence production cannot arise.
25. We are therefore, also of the opinion 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. Consequently, the question referred to us is answered affirmative that is to say in favour of the assessee and against the revenue There shall be no orders as to costs".
Since in this case one machine being inoperative for the month of after payment of central excise duty; has not produced any goods and therefore same cannot be charged to compounded levy of central excise duty.
7 EX/51414 of 2018
8. In view of above, we find the order-in-appeal is without any merit, we set aside the same and accordingly appeal of the assessee is allowed with consequential relief as per law.
(Operative part of the order pronounced in the open court.) (Anil Choudhary) (C.L. Mahar) Member (Judicial) Member (Technical) PK