Section 11B not applicable to North East refunds – Board clarifies
The exemption for goods produced in Sikkim, North-East etc, are administered by a refund scheme. First duty has be paid and then the amount of duty paid other than through the Cenvat account is refunded. Now the question is “will the provisions of Section 11 B like unjust enrichment apply to these refunds?” . Board had in Circular No. 682/73/2002, dated 19.12.2002 clarified, in relation to the J&K exemption, that
“Refund” envisaged in the notifications is not on account of any excess payment of excise duty by the manufacturers, but is basically designed to give effect to the exemption. In other words, the mechanism has been adopted to operationalize the exemption envisaged in these two notifications. In view of this aspect of the matter, the provisions of Section 11B of the Central Excise Act, 1944 would not apply in the case of these notifications.”
But the field has doubts whether the J&K clarification would apply to Sikkim? Board clarifies that
It is noticed that when same scheme of refund is founded for other areas, the clarification issued with reference of J & K should hold good, and there should not have been any doubt. Therefore, it is clarified that clarification issued vide para-3 of Circular No. 682/73/2002, dated 19.12.2002, will also be applicable for units availing exemption under notification No. 39/2001-CE dated 31.7.2001 (Kutch) , 71/2003-CE dated 9.9.2003 and 56/2003 dated 25.6.2003 (Sikkim),32/99-CE and 33/99-CE both dated 8.7.1999 (North East).
As rightly noticed buy the Board there should not have been any doubt. But doubt they did and that is what the field is for. Thank God and the Board that a clarification has been issued. Maybe the Board should issue another circular that clarification issued on a particular issue will be applicable to all identical situations and there should not be any doubts.
CIRCULAR NO. ,Dated: December 8, 2006