Indian Oil Corporation Ltd VERSUS C.C.E. & S.T.-Vadodara-i

EXCISE Appeal No. 11133 of 2013-DB

[Arising out of Order-in-Original/Appeal No 10-CEX-IOCL-COMMR-I-2013 dated 07.02.2013

passed by Commissioner of Central Excise, Customs and Service Tax-VADODARA-I]

 

Indian Oil Corporation Ltd

VERSUS

C.C.E. & S.T.-Vadodara-i

APPEARANCE:

Shri Willingdon Christian, Advocate for the Appellant

Shri. Vijay G. Iyengar, Superintendent (Authorized Representative) for the

Respondent

CORAM: HON’BLE MEMBER (JUDICIAL), MR. RAMESH NAIR

HON’BLE MEMBER (TECHNICAL), MR. RAJU

FINAL ORDER NO.A / 10221 /2023

DATE OF HEARING:17.01.2023

DATE OF DECISION: 07.02.2023

RAMESH NAIR

The brief facts of the case are that as asked by the department to the

appellant to pay the differential duty, the appellant has paid the differential

duty for the period from June, 1993 to August, 1993 on Residual Crude Oil on

the ground that the appellant was required to receive certificates of re

warehousing within 90 days as stipulated in Rule 156B (1) of Central Excise

Rules, 1944, but they failed. Subsequently the two Show Cause Notices dated

20.10.1993 and 13.12.1993 were issued which were confirmed by order in

original dated 30.11.1995 on the ground that the appellant failed to state

anything about the facts of establishing procurement of the consignment in

the hands of the proper consignee. The said order dated 20.10.1993, was

challenged before the Hon’ble Tribunal but the appeal was dismissed on the

ground that there is no concurrence of the committee of disputes for pursuing

this appeal. Thereafter, the appellant paid up the duty of Rs. 1,13,52,313/-,

and filed a refund claim on the ground of they had submitted all the AR3As to

prove supply of Residual Crude Oil to the prescribed consignees. The above

refund claim came to be rejected by the Assistant Commissioner vide SCN

dated 13.01.1997, and the corresponding order in original dated 16.04.1997,

but on appeal vide order in appeal dated 30.10.1998, it was remanded to the

Adjudicating Authority to pass order after verifying the documents, certificates

of re-warehousing. On remand proceedings the Learned Deputy Commissioner

passed order in original dated 10.07.2000, contending inter alia that order

dated 30.11.1995, had become final and the appellant is not eligible for refund

on appeal against the aforesaid order dated 10.07.2000, the

Commissioner(Appeals) passed order dated 15.02.2001, and upheld the

verdict that the earlier order in original dated 30.11.1995 has became final

and no refund is grantable. The appellant’s appeal before the tribunal came to

be rejected on the ground that the order dated 30.11.1995, had attained

finality. The appellant then approached the High Court of Gujarat vide SCA

dated 14.06.2006. The Hon’ble high Court vide it’s order dated 26.09.2008,

was pleased to set aside the CESTAT’s order and sanction the refund with

interest .In compliance with the aforesaid order dated 26.09.2008, of the

Hon’ble High Court of Gujarat, The appellant was granted refund of Rs.

1,21,38,304/- including interest of Rs. 9,44,567/-. However, thereafter a SCN

No. V.Ch.27 (4) Dem/Commr-I/09 dated 11.11.2009, was issued seeking

recovery of refund amount as if it was erroneously granted on the ground that

the above order of the High Court of Gujarat was then challenged by the

revenue before the Hon’ble Supreme court in SLP No. 18988 of 2009, which

came to be decided by its order dated 02.08.2010, requiring the appellant to

produce all the relevant AR3As showing the proof of receipt of goods by the

consignees in terms of the Notification No. 75/84-CE read with Rule 156B(1)

of the Central Excise Act, 2002. The Adjudicating Authority has rejected the

refund claim partially by allowing refund of Rs. 40,68,278/- and confirmed

recovery of the balance amount of refund of Rs. 80,70,026/-, against the order

of the adjudicating authority rejected the partial claim, the appellant filed the

present appeal.

Shri Willingdon Christian, Learned Counsel submits that the appellant

along with refund application dated 05.11.1996, submitted all the AR3As,

therefore, there was no reason to reject the claim. For this he invited our

attention to the refund application dated 5.11.1996, he submits that

subsequently the appellant further reiterated the submission of all the AR3As

vide there letter No. JRF/ A-17/ SCN-140/166 dated 20.04.2011. Therefore,

there was no reason to reject the refund claim of Rs. 80,70,026/-. Without

prejudice to his above submission, he further submits that when remission of

duty for special industrial purpose, exempts the consignee, who is L-6 license

holder, the concessional rate of duty cannot be denied to the manufacturer

because of non-endorsement in AR3As form of actual receipt of material at

beneficiary’s end. In such a case, the duty liability falls on the beneficiary

consignee and not on manufacturer from whom the concessional rated

material was obtained by the consignee, i.e licence holder. In this context, he

placed reliance on the following judgments:

 1992 (62) ELT 807 (T ) CCE Vs. Fenner India limited

 1999 (110) ELT 960 (T) I.B.P co. Ltd. Vs. CCE

Shri Vijay G. Iyengar, Superintendent (Authorized Representative)

appearing on behalf of the revenue reiterates the finding of the impugned

order.

We have carefully considered the submissions made by both the sides

and perused the records. We find that the Adjudicating Authority rejected the

part claim of Rs. 80,70,026/- by demanding the same and demand of refund

of Rs. 40,68,278/- was allowed. On perusal of the impugned order, we find

that the main reason for demand of the refund is given below:

“18. As regards remaining 129 AR3As involving duty demand

of Rs. 71,25,459/-, I find that M/s. IOC Ltd. Has utterly failed

to follow the procedure prescribed under Rule 173N (6) of the

Central Excise Rules, 1944 in respect of these AR3As and as

such I hold that they are not entitled for any benefit with

regard to 129 AR3As involving duty demand of Rs.

71,25,459/- on account of non-fulfillment of stipulated

conditions as laid down in Notification as well as Rules made

there under.”

From the above finding it is absolutely unclear that what is a lapse on the part

of the appellant for rejecting the refund claim by demanding the sanction

refund. We find that the appellant has clearly mentioned in their refund

application that the appellant have submitted all the AR3As, for the ready

reference, we scan relevant page of the refund claim:

 

From the above refund application, it is clear that the appellant had submitted

all the 144 AR3As. Therefore, there seems to be no reason on the partly refund

is denied out of the total AR3As. Moreover, the appellant much before the

passing of the adjudication order vide their letter dated 20.04.2011, brought

to the knowledge of the commissioner referring their refund application that

they had submitted all 144 AR3As along with the refund application. The said

letter is scanned below:

From the above letter also it is clear that there is no dispute that the appellant

had submitted all 144 AR3As. Therefore, we do not find any lapse on part of

the appellant. It appears from the order that the cognizance of letter dated

20.04.2011 was not taken by the Adjudicating Authority. Therefore, we are of

the view that the matter needs to be re considered taking into consideration

that the appellant have submitted all the 144 AR3As.

The impugned order is set aside, appeal is allowed by way of remand to

the adjudicating authority.

(Pronounced in the open Court on 07.02.2023)

RAMESH NAIR

MEMBER (JUDICIAL)

(RAJU)

MEMBER (TECHNICAL)