Customs, Excise and Gold Tribunal - Mumbai
Saheli Synthetics Pvt. Ltd. vs Commissioner Of Cus. And C. Ex. on 10 September, 2001
Equivalent citations: 2000ECR47(TRI.-MUMBAI), 2001(134)ELT738(TRI-MUMBAI)
ORDER Jyoti Balasundaram, Member (J)
1. The appellants herein are engaged in the business of processing of the textiles on job work basis. They had filed writ petitions before the Hon'ble Supreme Court wherein they had contended inter alia that their duty liability was restricted to the amount payable on value added by them and that they were not liable to pay any duty on the wholesale value of man-made fabrics. On 20th February, 1984 the Apex Court passed an interim order directing them to furnish a bank guarantee for the duty on the difference between the ultimate price charged from appellant's customers and the value of processing work done by the appellants.
2. As per the directions of the Apex Court the appellant executed bank guarantees to the extent of Rs. 1,70,000/-, Rs. 23,35,000/- and Rs. 2,27,83,815.14. Writ petitions were subsequently disposed off by the Supreme Court by its order dated 4-11-1988 reported in Ujjagar Prints v. CCE - 1988 (38) E.L.T. 535 (S.C.) which was followed by a clarificatory order dated 27-11-1989 reported in 1989 (39) E.L.T. 493 (S.C). Pursuant to this clarificatory order the appellants approached the Hon'ble Gujarat High Court which vide its order dated 28-2-1989 issued specific directions to the Commissioner of Central Excise to abide by the clarificatory order of the Supreme Court and to refund any excess amount realised by encashment of bank guarantee.
3. A refund claim was filed for Rs. 52,14,208/- on 18-5-1989 covering the period from April, 1984 to November, 1987 and the refund amount represented the duty worked out on the trader's profit. Vide order issued 29-1-1990 the Assistant Commissioner passed an order rejecting the refund claim holding that in terms of Notification 305/77 trader's profit is includable in the assessable value. On this basis he rejected the refund claim filed by the assessee. The assessee filed an appeal before the Commissioner (Appeals) who vide his order dated 13-11-1992 held that trader's profit is not to be included in the assessable value and directed the Assistant Commissioner to grant the refund if otherwise the same is in order. The Department filed an appeal before the Tribunal against this order of the Commissioner (Appeals). The Tribunal dismissed the appeal expressly holding that trader's profit cannot be included in the assessable value. The order of the Tribunal is Final Order No. 252/1994-A, dated 8-9-1994.
4. Subsequent to the order of the Tribunal the appellants were called upon to intimate whether the duty paid by them and now claimed as refund has been collected from their customers/merchant manufacturers and the submission of the appellants was that the refund claim represented the excess amount realised through bank guarantee and that the refund claim was not against any excess duty paid by them. The Assistant Commissioner rejected the claim on the ground of unjust enrichment. The Commissioner (Appeals) held that the bar of unjust enrichment is applicable for the present case and rejected the appeal of the assessee. Hence the appeal.
5. On hearing both sides we note that the appellant's claim right from the start that their refund claim is restricted to the excess amount and does not represent the refund of excise duty has not been disputed by the adjudicating authority in the final order dated 19-9-1995. The Commissioner (Appeals) also in the present impugned order does not hold that the amount for which the refund is sought represents excise duty payable by the appellants. Therefore the learned Counsel is correct in his submission that the present situation is covered by the decision of the Hon'ble Supreme Court in the case of Oswal Agro Mills Ltd. v. CCE - 1994 (70) E.L.T. 48 (S.C.) holding that bank guarantee furnished by an assessee in compliance with a Court order is in the form of a security or deposit and cannot be held as payment of duty attracting the provisions of unjust enrichment. This decision of the Hon'ble Supreme Court has been followed by the Tribunal in the case of Grasim Industries Ltd. v. CCE - 2001 (127) E.L.T. 57 (T) and in the case of CCE, Rajkot v. Juptier Cement Industries Ltd. -1997 (72) ECR 733.
6. Following the ratio of the above judgments which are squarely applicable to the present case we set aside the order holding that the appellants are entitled to the refund and allow the appeal.