The Customs, Excise And Service Tax Appellate Tribunal Chennai remanded the matter back to the adjudicating authority as the central excise refund claim was rejected due to the department’s misinterpretation.
Facts
The appellant holds Central Excise Registration and are engaged in manufacture of Excisable goods viz., Motor Cars and their parts falling under Chapter Heading 8703 of Central Excise Tariff Act, 1985. The appellant is availing CENVAT credit of duty paid on inputs, capital goods and Service Tax paid on input services. They clear their goods to M/s. Renault India Private Limited (RIPL) and M/s. Nissan Motors India Private Limited (NMIPL) both being related persons to the appellant.
The appellant filed a refund claim for the period from February, 2015 to July, 2015 citing that in majority of the cases (clearances) the assessable value was higher than the NMIPL/RIPL price and claimed that this had resulted in higher amount of excise duty payment by the appellant.
A verification report was sought for, from the Jurisdictional Superintendent of Central Excise, Oragadam I Range. After verification of the invoices and connected records, the Department was of the view that the appellant is not eligible for the refund-claim. Show Cause Notices both were issued to the appellant proposing to reject the refund-claims. After due process of law, the original authority vide two Orders-in-Original rejected the refund claims.
Submissions
Consultant Rajaram R. appeared and argued for the appellant, submitted that the appellant sold cars manufactured by them to their related parties (traders). Since in majority of the clearances, the value on which duty was paid was higher than the price at which cars were further sold by the related parties to their dealers which resulted in payment of higher amount of excise duty by the appellant, of which refund was sought.
Authorised Representative Harendra Singh Pal urged that the appellant has not opted for provisional assessment and therefore the refund-claim cannot be allowed.
Decision
The division bench of Sulekha Beevi C.S., Member (Judicial) and Vasa Seshagiri Rao, Member (Technical) noted that the appellant had made an application to the Department dated 06.05.2011 seeking provisional assessment.
The bench held that the rejection of refund-claim alleging that the appellant has not opted for provisional assessment is not justified.
The Tribunal said that to check whether there is excess payment of duty sale price of the related parties to the unrelated dealer has to be looked into and not the sale price of the unrelated dealer to the end customer.
The tribunal inferred that the Department got confused with regard to the use of the word ‘end customer’ in Section 11B of the Central Excise Act, 1944. In the case of valuation and payment of excise duty under Rule 10, the sale made to the end customer does not come into picture. So in order to check whether there is excess duty paid the sale made by the appellant to related parties and subsequently sale to dealers are only to be verified.
The bench viewed that the allegation in the Show Cause Notice that the appellant has not furnished documents with regard to the sale price to end customers so as to verify whether the excess excise duty is paid is totally erroneous.
The bench remanded the matter back to the adjudicating authority.
Case title: M/s. Renault Nissan Automotive India Private Limited v/s Commissioner of GST and Central Excise
Citation: Excise Appeal Nos. 40289 and 40290 of 2019
