Customs, Excise and Gold Tribunal - Mumbai
Niphad Sahakari Sakhar Karkhana Ltd. vs C.C.E. on 7 March, 2003
Equivalent citations: 2003(161)ELT428(TRI-MUMBAI)
ORDER C. Satapathy, Member (T)
1. Shri S.R. Patankar, learned Consultant appearing for the appellants states that the appellants are engaged in the manufacture of Sugar falling under Chapter 17 of the Central Excise Tariff Act, 1985. The appellants filed a rebate claim for Rs. 1,46,856/-in respect of the excess production of sugar during the months of May and June 1998 as per the provisions of Notification No. 160/88 dated 3-5-88. The rebate claim was sanctioned and paid to the appellants on 7-12-1988.
2. The appellants were issued a show cause notice dated 13-2-1989 calling upon them to show cause as to why the rebate claim erroneously granted and paid to them should not be recovered under the provisions of Section 11A of the Central Excise Act, 1944 on the ground that the appellants did not file the Classification list claiming the benefit of the Notification No. 160/88 dated 3-5-88.
3. The Assistant Commissioner, vide his Order-in-Original No. 93/89 dated 3-4-1989 confirmed the demand.
4. Appellants paid the amount under protest and filed an appeal before Commissioner (Appeals), Pune against the Order-in-original No. 93/89 dated 3-4-1989 passed by the Asstt. Commissioner, Central Excise and Customs, Nasik.
5. The Commissioner (Appeals), Pune vide his Order-in-Appeal No. A-422/95, dated 28-9-95 set aside the order of the Asstt. Commissioner, Central Excise and Customs, Nasik and allowed the appeal.
6. The Addl. Commissioner, Central Excise and Customs, Nasik vide his Order-in-original No. 5/1996 dated 22-1-96 sanctioned the rebate claim for Rs. 1,46,856/- and directed the appellants to take Credit of the said amount in their P.L.A.
7. The Department has preferred an appeal before Commissioner (Appeals), Pune against the Order-in-Original No. 5/96 dated 22-1-96 passed by the Addl. Commissioner, Central Excise and Customs, Nasik referred to in Para 6 above on the grounds that the Addl. Commissioner in his order has not taken into consideration the element of unjust enrichment while sanctioning the rebate claim.
8. The Commissioner (Appeals), Pune vide his Order-in-Appeal No. A/518/97 issued under F. No. V-2A (Ref)R/199/96 dated 28-11-97 allowed the appeal filed by the Department.
9. Being aggrieved by the second order passed by the Commissioner (Appeals), Pune, the appellants have preferred this appeal.
10. The learned Consultant raises two main issues in his submissions. Firstly, he states that there was no proper appeal filed before the Commissioner (Appeals). Secondly, he urges that since Notification No. 160/88 dated 3-5-1988 allows rebate of excise duty on excess production of sugar, the same is in the nature of incentive to the producer and there is no question of passing on the same to the buyer and consequently, the principle of unjust enrichment can not have any application in such cases.
11. Shri Ishwar Singh, learned J.D.R. appearing for Revenue contends that the principle of unjust enrichment is applicable to all cases as the law has been amended with retrospective effect and does not make any exception whatsoever. Therefore, he supports the order of the Commissioner (Appeals) setting aside the earlier order of the Additional Commissioner sanctioning rebate to the appellants.
12. We have heard the rival submissions and perused the case records. We take up the second issue raised by the learned Consultant first. It is clear from the reading of Notification No. 160/88 dated 3-5-1988 that exemption from duty granted under this Notification relates to excess quantity of sugar produced in a factory during the period 1-5-1988 to 31-7-1988 as compared to the average quantity of sugar produced by the factory during the same period of the preceding 3 sugar years. This has also been reiterated in the explanatory note appended to the said notification. The rebate claim of the appellants was duly sanctioned and the rebate was also paid to the appellants on 7-12-1988 when there was no provision in law regarding unjust enrichment as it was introduced in the year 1992. It is also a fact that this rebate which was initially sanctioned was recovered back on the ground of the appellants not filing a classification list claiming the benefit of exemption notification. The appeal by the appellants in the year 1989 was decided in their favour by the Commissioner (Appeals) but unfortunately this was done after a lapse of nearly six years on 28-9-1995. It is seen that the Commissioner (Appeals) has given a clear finding that it was not correct in law to deny the exemption to the appellants for non filing of classification list. He has set aside the order of the Assistant Collector and has allowed the appeal. It is significant that he has not remanded the matter to the lower authorities for fresh decision. It is, therefore not understood from where the Additional Commissioner gets the authority to pass another order on the same issue which has been subsequently reviewed by the Commissioner giving rise to the impugned order-in-appeal, which is in appeal before us. In the said order of the Additional Commissioner, he himself notes that the earlier order of the Commissioner (Appeals) was not reviewed in the Commissionerate office and therefore, the earlier order of the appeal had become final and since the same had clearly allowed the appeal of the appellants the amount became payable to them without requiring further adjudication. In any case, in the said order in appeal dated 27-9-1995, the Commissioner (Appeals) having disallowed the very basis of the subsequent action of the departmental authority to recover the rebate earlier sanctioned, the earlier sanction of the rebate made on 7-12-1988 sustains. At that time, there was no law regarding unjust enrichment apart from the fact that the relevant exemption notification made it clear that the exemption was for excess production. Since the rebate was rightly sanctioned on 7-12-1988 and wrongly recalled back by the order dated 3-4-1989 which has been set aside by the Commissioner (Appeals), the same is due to the appellants without attracting the provisions of unjust enrichment. Subsequent proceedings initiated by the Additional Commissioner and the Commissioner (Appeals) are without any authority of law. The appellants cannot be made to suffer for the wrong action initiated by the Assistant Commissioner on 3-4-1989 and the delay in deciding the appeal by the Commissioner (Appeals) from 1989 to 1995 and the subsequent illegal orders passed by the lower authorities. The appellants are entitled to the rebate claim originally sanctioned and paid on 7-12-1988. Accordingly, we allow the appeal with consequential relief to the appellants.
13. Since we are allowing the appeal in favour of the appellants in consideration of the second issue raised by the appellants, we do not consider it necessary to go into the first issue.
14. Appeal is allowed.