Eligibility for Refund of Excise Duty should be Decided by Considering Service Taxability and procedures u/s 11B of Central Excise Act: CESTAT [Read Order]

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the eligibility for refund should have been decided taking into consideration the taxability of the service and the procedures under section 11B of the Central Excise Act,1944. 

Global Wool Alliance Private Ltd, the appellant assessee was a manufacturer of several articles of ‘wool’ and ‘polyester’ had been availing CENVAT credit of duty paid on several inputs deployed in production and had, at the same time been clearing export goods on payment of duty under the rebate procedure while availing the benefit of exemption provided for in notification. 

The assessee appealed against the order passed by the Commissioner of Central Excise (Appeals) for refusing the application for a refund and for confirming the excise duty demand imposed on the assessee. 

Padmavati Patil, the counsel for the assessee contended that the eligibility for refund should have been decided taking into consideration the taxability of the service and the procedures laid down in law relating to tax collection and refund and the form and substance of a disposal in adjudication was vested exclusively in the authority before whom the claim had been preferred and that was a responsibility which should have been responsibly discharged. 

P.K Acharya, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was not eligible for a refund claim and that the demand raised by the revenue was as per the law and liable to be sustained. 

The Bench observed that it was not open to the authority empowered under section 11B of the Central Excise Act to dispose of a claim for refund on grounds of such being premature in any circumstance whatsoever and as the competent authority had not considered the eligibility for refund except at the threshold, it would only be appropriate to restore the claim for fresh adjudication. 

The two-member bench comprising Ajay Sharma (Judicial) and C.J Mathew (Technical) held that the eligibility of refund claim by the assessee had to re-adjudicate by considering the procedures laid down under the prescribed law. 

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates