JUDGMENT
Archana Wadhwa
1. Being aggrieved with the Order passed by the Commissioner (Appeals), Revenue has filed the present appeal. We have heard Shri V.K. Chaturvedi, learned S.D.R. for the Revenue and Shri S.P. Majumdar, learned Advocate for the respondent firm.
2. It seems that during the period from June, 1984 to January, 1986, the respondents were restrained to take the Credit of Duty paid on various inputs namely, Cryolite, Fluorspar, Aluminum Fluoride etc. under the Notification No. 201/79 for payment of duty on the aluminium ingots i.e. the assessee’s final product. During the said period, as the respondent could not take Credit of Duty paid on these inputs, they paid duty on the final product amounting to Rs.7,55,595.76 (Rupees seven lakh fifty-five thousand five hundred ninety-five and paise seventy-six) from their P.L.A. The dispute for the admissibility of Credit under the said Notification travelled upto the Tribunal who vide its Order No. 399/88-B dated 8.9.88 held that the set-off benefit under Notification No. 201/79 was available in respect of three items in question. Thereafter, the assessee claimed refund of the said amount of Rs.7,55,595.76 giving details of the gate passes under which the duty was paid on the inputs in respect of which they could not take the Credit on account of the restraint imposed by the Revenue and could not utilise the same for payment of duty on their final product. In their letter dated 16.3.95, they also submitted that during the relevant period, the sale price of the final product i.e.aluminum ingot, was fixed by the Government of India, Ministry of Steel and Mines (Department of Mines), New Delhi under the provisions of Aluminium (Control) Order, 1970 and that the rate of excise duty leviable on the said excisable goods, was fixed by the Government of India, Ministry of Finance on such sale price. In these circumstances, the respondents were obliged to sell their goods at a fixed sale price and as such, the question of unjust enrichment etc. does not arise.
3. Their refund claim was originally rejected by the Assistant Commissioner, when on an appeal filed by the respondents, the matter was remanded to him by the Commissioner (Appeals). In his Remand Order, the Assistant Commissioner again rejected the refund claim on the ground that their claim relates to the Credit of Duty paid on the inputs consumed in the manufacture of aluminum ingots and is not an account of differential duty paid on the aluminium ingots. He also rejected the Refund Claim on the point of unjust enrichment.
4. On an appeal filed by the appellants against the above order of the Assistant Commissioner, Commissioner (Appeals) allowed the appeal, and hence the present appeal by the Revenue.
5. We find that one of the authorities below have given a detailed factual background, which we have been able to find out from the Cross Objection filed by the respondents. It seems a simple case of giving consequential relief to the respondents as a result of rejecting the appeal of the Revenue by the Supreme Court. It may be mentioned here that the Revenue’s appeal against the Order of the Tribunal was dismissed by the Hon’ble Supreme Court on March 25, 1996. As such, the view taken by the Tribunal in its Order passed on 8.9.88 became final with the result that the respondents became entitled to the Credit of Duty paid on the three inputs for the period from June, 1984 to January, 1986. It is the Credit of Duty, to which the respondents were otherwise entitled, and which would have been utilised by them for payment of duty on their final product, the respondents are claiming refund for crediting the same in their RG-23A Part-II Account.
6. We find that in the case of the Collector of Central Excise, Kanpur v. Brooke Bond Liptons (I) Ltd. reported in 1999(107) ELT-228(T) an identical situation was present. The respondents’ claim in their case as regards benefit of exemption Notification No. 201/79 claiming two items as inputs in the manufacture of their final product, was not accepted by the Revenue. It was only subsequently in 1991 that the Tribunal accepted their plea.
The Tribunal, subsequently, observed that implementation of the Tribunal’s Order can be made either by granting cash refund of credit originally denied to the respondents or by allowing that amount to be credited in their RG-23A Part-II Account presently operated by the respondents under the MODVAT System. By taking notice of the provisions of the proviso (c) to Section 11B(2), the Tribunal also observed that such a case cannot be held to be a case involving re-assessment of duty paid on their final product and as such, the main provisions of Section 11B(2) are not attracted. In is seen that in the present case, had the authorities not disputed about the availability of credit in respect of the inputs in question and had they granted the necessary permission for availing the benefit of Notification No. 201/79 at an appropriate time, the respondents would have availed the exemption to the extent of duty paid on the inputs, instead of paying the duty on the aluminum ingots from their PLA. As such, it is seen that he present case is fully covered by the above Tribunal’s decision.
7. An identical view was taken by the Tribunal in the case of Collector of Central Excise, Bhubaneswar v. Orient Paper Mills reported in 1994(73) ELT-648 (T). It was observed that proviso (c) to sub-section (2) of Section 11B of Central Excises and Salt Act, 1944 will not apply to the cases where availment of Credit is rendered impossible for the Department’s initial refusal and/or delay and bar of unjust enrichment is not applicable. It was observed by the Bench that when the availment of Credit was thwarted by the action of the authorities and the respondents had to pay the duty from their PLA instead of from their RG-23 Part-II Account and later on, the benefit is held to be admissible, their claiming of refund has been allowed by providing the Credit amount in the RG-23 Account, permitting them to use the said Credit for payment of duty during the period when the Credit was admissible. To that extent, the duty paid by them from their PLA would be released, which can either be refunded to them or permitted for being utilised for payment of duty in future without being actually refunded to them in cash or by cheque. Applying the ratio of the above judgement to the facts of the instant case, it is seen that the Revenue’s appeal requires rejection.
8. It is also noticed that the respondents had taken a definite stand before the authorities below that the sale price of their final product is controlled by the Ministry of Steel and Mines (Department of Mines), New Delhi and it is not in their hands to increase or decrease the said price. The said contentions of the respondents have not been rebutted by the Revenue. In these circumstances also, we find that not unjust enrichment can be said to have accrued to the respondents. In any case, having held that proviso (c) to sub-section (2) of Section 11B contemplates and permits refund of Credit of Duty and carves out the exception of such refund from applicability of bar of unjust enrichment, the findings of the Assistant Commissioner that the respondents have not placed on record any evidence to show that the burden of duty has not been passed on to the buyers are unsustainable.
9. The Revenue’s reference to the Honourable Supreme Court’s decision in the case of Solar Pesticides that the bar of unjust enrichment would also supply for inputs captively consumed in the manufacture of final product, is not appreciate inasmuch as the same was given in different context and is distinguishable from the facts of the present case.
In view of the foregoing, we find no merits in the Revenue’s appeal and reject the same.
(Pronounced)