By TIOL News Service

MUMBAI, APRIL 23, 2016: THE rebate claim filed by the appellant for an amount of Rs.1,09,514/- was rejected on 20.04.2009 on the ground that the appellant though paid 4% excess duty i.e. @ 14% instead of the correct rate of @10%, since the 4% which was wrongly paid is not payable, the rebate claim is not admissible.

Nonetheless, the adjudicating authority directed the appellant to file a refund claim for seeking the 4% duty paid in excess. As per this direction, the appellant filed a refund claim on 30.6.2009. This too was rejected on 08.10.2009 on the ground that the appellant had not challenged the order dated 20.04.2009 where under the rebate was rejected. The Commissioner (A) sided with this order and, therefore, the appellant is before the CESTAT.

The appellant inter alia submitted that refund filed by the appellant is a fresh refund claim and the same cannot be rejected for the reason that the appellant have not filed appeal against the order disallowing the rebate.

The AR reiterated the findings of the lower authority.

The Bench inter alia observed –

+ Both the lower authorities have rejected the refund claim in respect of excess paid duty on the ground that the appellant have not challenged the order dt.20.4.2009 whereby the rebate was disallowed.

+ I do not agree with this finding for the reason that the rebate against the export is granted under Rule 18 of CER, 2002 and notification issued there under, whereas in case of any duty which is paid in excess can be refunded under the general provisions of refund under Section 11B.

+ Since the appellant had paid excess duty at the rate of 14% instead of correct duty payable at the rate of 10%, the 4% though excess paid cannot be sanctioned as rebate, therefore the same was disallowed.

+ However the adjudicating authority while disallowing the rebate also mentioned in the order that “for allowing a 4% of the duty paid in excess the claimant is required to follow the procedure as per Central Excise Law”. Therefore the proceeding of rebate and proceeding of refund are two different proceedings.

+ In my considered view the appellant have rightly claimed the refund of 4% excess paid duty the same should have been disposed of on its own merit without getting influenced by the order dt.20.4.2009 by which the rebate was disallowed.

The impugned order was set aside and the original authority was directed to dispose of the refund claim in accordance with law.

(See 2016-TIOL-968-CESTAT-MUM)