Case Law Details
Axon Drugs (P) Ltd Vs Commissioner of GST & Central Excise (CESTAT Chennai)
Introduction: The recent judgment by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Chennai in the case of Axon Drugs (P) Ltd Vs Commissioner of GST & Central Excise has generated interest among legal experts and industry professionals. At its core, the case deals with the adjudicating authority’s decision to credit an excise refund to the Consumer Welfare Fund, a move deemed “unjust and improper” by the CESTAT Chennai. This article delves into the nuances of the case to provide a detailed understanding.
The Factual Matrix: The appellant, Axon Drugs, is in the pharmaceutical business, and they filed a rebate claim concerning the export of medicines. After scrutiny, a portion of the rebate claim was sanctioned to be credited to the Consumer Welfare Fund. Axon Drugs contested this decision, arguing that they bore the incidence of duty themselves and not the consumer.
The Core Controversy: CENVAT Account and Rebate Claims: Axon Drugs made a rebate claim of Rs.5,55,950/- for the exports. However, upon inspection, it was found that Rs.3,01,002/- pertained to duty-free inputs, which led to a show-cause notice. Eventually, this amount was ordered to be credited to the Consumer Welfare Fund under Section 11 B of the Central Excise Act, 1944, a decision Axon Drugs appealed against.
The Legal Interpretation: Section 11 B of the Central Excise Act: The original authority sanctioned the rebate but decided to credit Rs.3,01,002/- to the Consumer Welfare Fund citing sub-section (2) of Section 11 B. They claimed the duty was passed on to the overseas buyer, an assertion Axon Drugs vehemently denied, leading to the appeal.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
