CESTAT Chandigarh: Refund of Excise Duty on Ambulances Not Permissible as Assessee Is Neither Manufacturer Nor Buyer
Sangeetha Prathap
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that an assessee operating ambulance services under a government partnership arrangement is not eligible to claim a refund of excise duty paid on ambulances, as it is neither the manufacturer nor the buyer of the vehicles within the meaning of Section 11B(2)(e) of the Central Excise Act, 1944. The bench comprising S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) dismissed the appeal filed by M/s GVK Emergency Management and Research Institute, observing that the statutory conditions for refund were not fulfilled, and that the assessee lacked the legal standing to seek such reimbursement.
The dispute arose from an MoU executed between the assessee and the Government of Karnataka under which the entity was responsible for operating the State’s “Arogya Kavacha” ambulance service. As part of this arrangement, the assessee procured vehicles from manufacturers on behalf of the State Government, following which the vehicles were sent to M/s Bafna Healthcare Pvt. Ltd. (BHPL) in Faridabad for fabrication into fully equipped ambulances. During an investigation, revenue authorities took the view that the fabrication activity undertaken by BHPL amounted to “manufacture” under excise law, prompting BHPL to pay differential excise duty of ₹1.64 crore under protest on 105 ambulances supplied to the State Government.
The assessee subsequently filed a refund claim asserting that it had borne the duty on behalf of the Government of Karnataka and was therefore eligible for refund. It relied on various documents, including a No Objection Certificate from BHPL and letters from the State Government authorising it to pursue the claim. However, the refund was rejected by the adjudicating authority and the Commissioner (Appeals), leading to the present appeal before the Tribunal.
CESTAT examined the MoU and the statutory framework and concluded that the assessee could not be treated as a manufacturer or buyer of the ambulances. The vehicles were registered in the names of district health authorities, making the Government of Karnataka the actual owner. The Tribunal held that mere contractual involvement in procurement, supervision or operation of ambulances does not confer the legal status of “buyer” for purposes of Section 11B(2)(e). Further, the assessee had failed to produce any statutory document—such as invoices in its name—to demonstrate that it had directly borne the incidence of excise duty.
The Bench also highlighted that Notification No. 6/2006-CE, under which refund was sought, contains mandatory procedural conditions. It requires the manufacturer to first pay the duty, take a credit of the excess duty in its Account Current, and file a refund claim supported by prescribed certificates. Since BHPL, the actual manufacturer, had never filed such a claim and the appellant did not satisfy any of the statutory requirements, the refund was found to be legally untenable.
Relying on settled Supreme Court jurisprudence, including M.R.F. Ltd., Addison & Co., and Ambey Cements, the Tribunal reiterated that exemptions and refunds must be strictly construed and that the burden of proving eligibility lies entirely on the claimant. The appellant, the Bench concluded, had not demonstrated that it fulfilled any mandatory condition or that it bore the incidence of duty without passing it on. Accordingly, the Tribunal upheld the rejection of the refund claim, holding that the appellant “is neither a manufacturer nor a buyer nor the owner of the vehicles,” and therefore cannot seek refund of duty paid by BHPL. The appeal was dismissed in full.
Appearance
Counsel for Appellant/ Assessee: None
Counsel for Respondent/ Department: Anurag Kumar and Amita Gupta
Cause Title: M/s GVK Emergency Management and Research Institute v. Commissioner of Central Excise, Delhi
Case No: Excise Appeal No. 51956 of 2014
Coram: S.S. Garg (Judicial Member), P. Anjani Kumar (Technical Member)
