Decided on July 15,1991



S.L. Peeran, Member (J) - (1.) THE appellants are aggrieved with the order -in -appeal passed by the Collector of Central Excise (Appeals) Bombay who has confirmed the order -in -original passed by the Assistant Collector of Central Excise, Ahmedabad. The Assistant Collector has sanctioned a sum of Rs. 48,336.38 p. out of a sum of Rs. 84,197.20 p. as refund claim and rejected the balance amount.
(2.) THE appellants are engaged in the manufacture of Fluorescent pigment falling under Tariff Item 14DD of the First Schedule to Central Excises and Salt Act, 1944. They filed the classification list for their product under Tariff item 14DD under protest and had paid Central Excise duty for the same under protest. They filed a refund claim amounting to Rs. 84,197.20p. for the period from 18 -11 -1976 to 31 -3 -1978 under their letter dated 15 -12 -1982 on the ground that the Collector of Central Excise (Appeals) Bombay by his order -in -appeal dated 11 -6 -1982, had held in respect of another assessee manufacturing the same item as not classifiable under Tariff item 14DD. They contended that the duty paid in excess of the rates prevailing at the material time under Tariff Item 14DD under protest was liable to be refunded to them. The appellants were also issued with a show cause notice dated 31 -3 -1983 by Senior Superintendent of Central Excise, Ahmedabad asking their explanation as to why the refund should not be rejected. They filed their reply on 22 -2 -1983 denying the allegation made in the show cause notice. In their reply, they had contended that they had paid duty under protest and they were clearing the goods by marking 'duty paid' under protest on all the documents and, as now the Collector (Appeals) has decided in another manufacturer's case that the goods were not classifiable under Tariff Item 14DD, the said ratio was applicable to their goods also and hence they were entitled for the refund of excess duty paid as per the rates of duty calculated under Tariff Item 14DD. This show cause notice proceedings were adjudicated by the Assistant Collector, Ahmedabad who after hearing the assessee, passed the order -in -original in question.
(3.) IN this order -in -original, the Assistant Collector has examined the order -in -original dated 29 -4 -1983 passed by his predecessor in office who had also adjudicated the refund claim and had passed the order allowing the refund claim subject to the verification of the same by the Jurisdictional Range Officer. The Assistant Collector has noted a report from the Range Superintendent which revealed that the assessee did not satisfy the requirements vide proviso (1) of Notification No. 218/77 in respect of the capital investment made on plant and machinery installed in the industrial unit. The Asstt. Collector has observed that although the previous Assistant Collector was satisfied with the report submitted to the Range Superintendent and had passed the order -in -original directing the grant of refund; however, he was not satisfied to the verification made by the said predecessor and therefore he was entitled to re -examine the issue in the light of the report of the Range Superintendent. The Assistant Collector has examined the balance sheets submitted by the assessee certified by the Chartered Accountant which revealed that the capital investment on plant and machinery is much less than the prescribed limit of Rs. 10 lakhs. He has further noted that from the refundable amount of Rs. 78,907.20p., the amount of Rs. 24,564.88p. adjusted by adjudication order dated 29 -1 -1985 was required to be deducted from the assessee and accordingly, the refund comes to Rs. 54,342.32p. He has held that this amount becomes part of the profit and therefore, required to be included in the assessable value and duty is also required to be paid on this amount. This amount he has bifurcated as per his order for the periods from 18 -11 -1976 to 28 -6 -1977 and from 5 -8 -1977 to 25 -2 -1978 and has held that duty refundable for this period will be Rs. 28,586.44p. and Rs. 25,755.88p. respectively, as against duty claimed for refund of Rs. 52,850.40p. and Rs. 47,617.25p. for the said periods. Accordingly, the Asstt. Collector has sanctioned Rs. 48,336.38p. out of a refund claim ofRs. 84,197.20p. The Collector (Appeals) has confirmed the order of the Assistant Collector and rejected the appellants contention and has held that the amount which was to be refunded to the appellants, formed part of assessable value as it is a profit to the appellants.;

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