Refund of Excess Paid Duty can’t be rejected for Non-Option of Provisional Assessment: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the refund of excise duty paid in excess cannot be rejected solely on the ground that the assessee did not opt for provisional assessment under the Central Excise Act, 1944.

Earlier, the department, while considering the refund application by M/s Anchor Electricals Private Limited has held that the assessee have not opted for provisional assessment in respect of clearances made from their factory to depot and subsequent sales on lower price as compared to the price for goods cleared from the factory and therefore, rejected the claim.

After considering arguments from both sides, Mr. Ramesh Nair, Judicial Member, observed that there is no dispute about the fact that appellant have paid duty on the higher price when cleared the goods from their factory to depot and subsequently the goods were sold at lower transaction value.

“Therefore, the differential duty paid in excess arose for which the appellant have filed refund claim. Both the lower authorities rejected the refund claim only on the ground that appellant have not opted for provisional assessment. However, there is no dispute on the fact that appellant have paid duty in excess as per Section 4 of Central Excise Act, 1944 and Rules made thereunder. Merely because the appellant have not followed the provisional assessment, the refund cannot be denied as the Revenue cannot retain any amount which is not due as per law,” the Tribunal added.

Concluding the order based on the settled principles laid down by the Courts, the Tribunal held that even though the assessee has not opted for provisional assessment but the duty was paid in excess admittedly the assessee’s claim of refund within stipulated time of one year, the refund is admissible.

“The refund cannot be rejected only on the ground that assessee has not opted for provisional assessment. Accordingly, I do not agree with the contention made by the lower authorities in the impugned order. Accordingly, the impugned order is setaside and the appeal is allowed,” the Tribunal said.

To Read the full text of the Order CLICK HERE

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