2026-VIL-1429-CESTAT-CHD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Refund and Self-Credit – Benefit of special rate of value addition – Appellant availed area-based exemption under Notification No.56/2002-CE dated 14.12.2002 – Government issued Notifications No. 19/2008 dated 27.03.2008 and 34/2008 dated 10.06.2008 restricting refund of excise duty on value addition by Appellant and providing for fixation of special rate of value addition – After Supreme Court upheld validity of amending notifications in VVF case, appellant approached Department for fixing special rates of value addition for different products which were accordingly fixed by competent authority – Subsequent demands were issued and confirmed by respective authorities without considering special rates of value addition fixed – Whether Appellant entitled to benefit of special rate of value addition fixed by competent authority in terms of Notification No.19 & 34/2008 – HELD – Appellant is entitled to benefit of special rate of value addition in terms of Notification No.19 & 34. The hon'ble Supreme Court in VVF Ltd. clarified that refunds are not to be granted merely as per rates already prescribed in notification and authorities should give effect to all requirements and conditions contained in amending notifications – Impugned orders were passed disregarding the special rate of valuation fixed by competent authority. The authorities are required to re-do the whole exercise of demand calculation taking into account special rates of value addition fixed by competent authority – As the demand itself is not sustainable when calculated without special rates of value addition, interest is not payable – Appeals are allowed by way of remand to appellate authority with direction to recalculate demands taking into account special rates of value addition fixed by competent authority – The appeals are allowed by remand - Central Excise – Refund and Self-Credit – Duplication of demand – Appellant availed excess self-credit as refund under exemption notification – In several appeal periods, both excess availed refund and refund taken as self-credit and utilized for subsequent clearances were demanded and confirmed simultaneously – Whether demanding both excess refund and refund taken as self-credit utilized in subsequent clearances amounts to duplication of demand and double jeopardy to assessee – HELD – On one hand self-credit availed by Appellant under exemption notification has been confirmed and on other hand excise duty paid through self-credit in subsequent clearances has also been demanded; this is erroneous practice – Department should have demanded and confirmed only one of them. Demanding both excess refund and utilization of credit amounts to causing double jeopardy to assessees – The issue of duplication of demand needs to be looked into and rectified – Appeals are allowed by way of remand with direction to consider duplication of demand and allow only one of the demands instead of both.
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