Customs, Excise and Gold Tribunal - Delhi
Cce vs Star Paper Mills Ltd. on 29 November, 2006
Equivalent citations: 2007(115)ECC20, 2007ECR20(TRI.-DELHI)
ORDER M.V. Ravindran, Member (J)
1. This appeal is directed against order in appeal dated 30th September 2004 that allowed the appeal of the respondent.
2. The relevant fact that arise for consideration are respondent were paying duty on wrapping paper captively used by them and were availing modvat credit. Demand was raised on the appellant reversal of modvat taken by them in excess of Rs. 800 per metric ton. Issue was settled in favour of the respondent subsequent to which respondent filed refund claim. The said refund claim was rejected by the adjudicating authority and the matter was taken upto Hon'ble Supreme Court. Hon'ble Supreme Court directed that the adjudicating authority should consider the matter fresh in light of the decision of the Hon'ble Supreme Court in the case of Solar Pesticides. The adjudicating authority in the denovo proceedings again came to the conclusion that respondent is not eligible for the refund of the amount claimed by them on the grounds of unjust enrichment. On an appeal, Commissioner (Appeals) set aside the order in original and granted refund to the appellant under the provisions Section 11B(2) (c). Hence this appeal by the revenue.
3. The learned SDR submits that the order in appeal of the Commissioner (Appeals) is not correct in as much that the Hon'ble Supreme Court in the respondent's own case has set aside the refund claim sanctioned by the Tribunal and directed the authorities to consider the issue of unjust enrichment. It is his submission that the order in appeal is wrong in as much that it travels beyond the provisions of the Section 11B of Central Excise Act, 1944. It is also his submission that once the appellant has captively consumed the goods, issue would get covered by the decision in the case of UOI v. Solar Pesticides .
4. Learned advocate appearing on behalf of the respondent submits that the learned Commissioner (Appeals) findings, as regards, the applicability of provisions of Section 11(B)(2) (c) has not been challenged by the revenue in their grounds of appeal. It is his submission that this particular Section was interpreted by various Division Bench of the Tribunal in the case of Collector of Central Excise, Bhubaneswar v. Orient Paper Mills as reported at , CCE, Kanpur v. Kanpur Plastipack Ltd. as reported at and CCE, Ahmedabad v. Dura Syntex Ltd. as reported at .
5. Considered the submissions made at length by both sides and perused records. The learned Commissioner (Appeals) while allowing the appeal of the respondent has come to the conclusion and findings as under:
In view of the said mandatory provisions, I find that the ratio of the Hon'ble Supreme Court in the case of Solar Pesticides is not applicable in this case being related to the Customs case due to the different statutory provisions under both the law.
There is no dispute regarding the eligibility and the use of the impugned goods as inputs. As discussed hereinabove, I find that the principle of unjust enrichment is not applicable in this case being the mater relates to the duty on inputs captively consumed in terms of Section 11B2(c) of Central Excise Act, 1944.
b. Applicability of principle of unjust enrichment factually:- The appellant has contended that prior to the refund claim i.e. 09.05.89, they were not paying duty but after 09.05.89 they started to pay duty and availing modvat credit. Since, practically there was no difference between both the systems, hence the duty incidence was not taken into consideration indetermination of the value of the product wherein impugned goods is used. Relying upon the said factual position, I find that the appellant's contention, that no duty burden was passed on to the customers as the assessable value remains same prior or after 09.05.89, is acceptable.
6. From the above reproduced portion, it can be seen that the learned Commissioner (Appeals) has correctly followed the law as settled by the Division Bench in the case of Orient Paper Mills (Supra), Kanpur Plastipack Ltd. (Supra) and Dura Syntex Ltd. (Supra). It is seen that the Division Bench in all the above three mentioned decisions have interpreted the provisions of Section 11B2(c) of the Central Excise Act and allowed the refund to the assesses there under. It is worthwhile to reproduce the findings of the Hon'ble Tribunal in the case of Orient Paper Mills (Supra). I may read the same:
6. A point has been raised in the appeals about the unjust enrichment factory coming in the way of grant of refund to the respondents. It does not. Actually the relevant provision clinches the mater in favour of the respondents. Proviso (c) to Sub-section (2) of Section 11B of Central Excises and Salt Act, 1944 as correctly pointed out, carves out an exception in respect of cases involving Credit of duty. Thus the argument advanced in the appeals in the this regard fails. More importantly, this provision refers to payment of refund of duty to the applicant of Credit of duty paid on inputs in accordance with the rules or a notification. Thus refund of Credit of duty to the applicant is contemplated and is, in fact, permitted. The relevant provision (whether Rules or Notifications) may provide that no refund is payable but that provision has to be read harmoniously in conjunction with Section 11B(2) proviso (c). The provision regarding non-payment of refund of Credit has to be read down and confined to normal cases where availment of Credit for utilisation for the payment of duty is possible and not in cases where such availment is rendered impossible of fulfillment by the action of the Department where the remedy under Section 11B(2) proviso (c) will provide the relief to the manufacturer.
7. It can be seen from the reproduced portion of the order of the Division Bench, the issue in the present case is squarely covered by the said decision and it is also to be noticed that these provisions are interpreted by the Division Bench on an appeal filed by the revenue before the Tribunal.
8. Accordingly, in view of the facts and circumstances, as mentioned above, I do not find any reason for interference in the said impugned order. The appeal filed by the revenue is dismissed.
(Dictated and pronounced in the open court)