ORDER
P.G. Chacko, Member (J)
1. The appellants in Appeal Nos. 1029 and 1030 are manufacturers (hereinafter referred to as “principal manufacturers”) of “branded chewing tobacco” falling under Chapter 24 of the CETA Schedule. The appellants in Appeal Nos. 1091 to 1098 are job workers of the appellant in Appeal No. 1029. The appellants in Appeal Nos. 1086 to 1090 are job workers of the appellant in Appeal No. 1030. Appeal Nos. 1086-1098 which do not figure in today’s list are being taken up for disposal along with Appeal Nos. 1029 and 1030 with the consent of both sides.
2. The job workers processed the raw tobacco supplied by the principal manufacturers and cleared the resultant product (branded chewing tobacco) to the latter. These removals were on payment of duty based on the price at which the principal manufacturers sold the goods from their depots. The clearances from the depots were also accompanied by similar payment of duty by the principal manufacturers. The assessable value of the goods, whether in the hands of the principal manufacturers or their job workers, did not include the “average freight”. All the parties in their respective declarations filed under Rule 173C had claimed abatement of this freight from assessable value. All the assessments were provisional. The department issued show cause notices proposing to limit the abatement of average freight and to finalise the provisional assessments accordingly. In the SCNs issued to the appellants in Appeal No. 1029 and their job workers, the proposal was to limit abatement of average freight from assessable value to Paise 30.59 per packet for the period 1995-96. In respect of the appellants in Appeal No. 1030 and their job workers, the proposal was to finalise the provisional assessments by limiting the abatement of average freight within the range of Ps. 21.63 to Ps. 27.00 per packet for the years 1994-95 to 1998-99. The original authority rejected, in toto, the abatement claims of all the parties in terms of the Tribunal’s decision in JCB Escorts Ltd. v. CCE, 2000 (118) E.L.T. 650 (T). The aggrieved parties preferred appeals to the Commissioner (Appeals) and the latter allowed abatement of average freight to the assessees as proposed in the SCNs. After obtaining the favourable order of the appellate authority, all the assessees filed refund claims in respect of the duty paid on the average freight element of the assessable value. The department, by show cause notices, proposed to reject these claims on the ground of unjust enrichment. This proposal was upheld by the original authority. The appeals preferred by the assessees against the original authority’s orders of rejection of refund claims did not succeed. The order passed by the lower appellate authority sustaining the orders of the original authority is under challenge in the present appeals.
3. Heard both sides. Ld. Counsel for the appellants submits that, as their refund claims were consequential to finalisation of provisional assessment, the doctrine of unjust enrichment is not applicable. In this connection, he relies on the Hon’ble Supreme Court’s judgments in the following cases :-
(1) CCE, Chennai v. T.V.S. Suzuki Ltd.,
(2) CCE, Mumbai v. Allied Photographies India Ltd.,
While Id. Counsel has relied on pararaph-14 of the Supreme Court’s judgment in Allied Photographies (supra), Id. SDR has claimed support from para-12 of the said judgment. Ld. SDR has, further, pointed out that, under Rule 9B(5) of the Central Excise Rules, 1944 as amended by Notification No. 45/99-C.E. (N.T.), dated 25-6-99, the bar of unjust enrichment is applicable to a refund claim consequential to finalisation of provisional assessment. Ld. Counsel has countered by pointing out that the said amendment had no retrospective effect so as to cover the periods of dispute in the present cases. Ld. SDR has, particularly, referred to one of the SCNs, which was issued to the appellants in Appeal No. 1030 for finalisation of the provisional assessment relating to their clearances for the period 1998-99. This notice was issued and the provisional assessment was finalised after 25-6-99 [the date of amendment of Rule 9B(5)]. It is argued that, in respect of the claim for refund consequential to this finalisation of provisional assessment, the amended Rule would operate and, consequently, the bar of unjust enrichment would apply.
4. I have carefully considered the submissions. The principal issue arising for consideration is whether the bar of unjust enrichment is applicable to the subject refund claims. It is not in dispute that the refund claims are consequential to finalisation of provisional assessments. It is, again, not in dispute that the provisional assessments were finalised as proposed by the department. This happened in the hands of the lower appellate authority inasmuch as the orders passed by the original authority on the strength of the Tribunal’s decision in JCB Escorts (supra) ceased to have legal effect consequent to the said decision being set aside by the Apex Court vide . All the refund claims under consideration are, admittedly, consequential to the order passed by the Commissioner (Appeals) which became final and binding on both the Revenue and the assessees. From these facts, the moot question has arisen as to whether the order of the Commissioner (Appeals) could be considered to be one of adjustment of duty under Rule 9B. The SCNs, issued for finalisation of provisional assessments, had invoked this Rule and, ultimately, the Commissioner (Appeals) finalised the provisional assessments as proposed in the notices. Hence the impugned order is an order of finalisation of provisional assessment, passed under Rule 9B. The subject refund claims which were filed pursuant to this order should be held to belong to the category of “claims for refund arising on adjustment of duty under Rule 9B(5)”, a category recognised in para-12 of the Apex Court’s judgment in Allied Photographies (supra). Their lordships held that refund claims of this category are not affected by anything contained in Section 11B. In para-14 of the said judgment, the court has rendered a categorical ruling that, in view of para-104 of the judgment in Mafatlal Industries v. UOI – , the bar of unjust enrichment is not applicable to cases of refund consequent upon adjustment under Rule 9B(5). It was so held in the case of T.V.S. Suzuki Ltd. (supra) also. All the refund claims in question are squarely covered by these decisions of the Apex Court. Consequently, the bar of unjust enrichment cannot be applied to these claims.
5. With regard to Id. SDR’s submission in relation to one of the SCNs, 1 find that the said notice was issued after 25-6-99 and consequently the finalisation of provisional assessment proposed therein was also made after that date. It was argued that the amended provisions of Rule 9B(5) should be applied to the refund claim filed by the assessee consequent upon such finalisation. This plea cannot be accepted for two reasons – (1) the amending Notification [45/99-C.E. (N.T.)] did not purport to give retrospective effect to the amendment of Rule 9B(5) and (2) the relevant date for application of Rule 9B(5) is not the date on which the SCN was issued, nor the date on which that notice was adjudicated upon. The event relating to Rule 9B(5) is ‘assessment’ which relates to excisable goods cleared during the specified period. Hence what is relevant to both provisional and final assessments under Rule 9B is the period of clearance of the excisable goods. Admittedly, this period covered by the SCN referred to by Id. SDR is 1998-99, which is prior to the above amendment. The provisional assessment and its finalisation were for this period. Hence both the provisional and final assessments would be governed by Rule 9B(5) as the rule stood during the above period. In other words, the amended provisions of the rule has no application to the SCN in question.
6. In the result, the impugned order rejecting the refund claims as barred by unjust enrichment is set aside and all these appeals are allowed.
(Dictated and pronounced in open Court)