ORDER
Archana Wadhwa, Member (J)
1. During the period from July 1989 to February 1990, the appellants were clearing the HDPE tapes without payment of duty on furnishing bank guarantee in terms of Hon’ble Gujarat High Court Stay Order before whom the matter as regards the correct classification of tapes was pending. Subsequently the stay was vacated by the Hon’ble Gujarat High Court and the appellant paid an amount of Rs. 78,211.74 by making a debit entry from the PLA on 12.7.90, Subsequently the issue of classification was decided in favour of the assessee by Madhya Pradesh High Court in the case of M/s Rajpack Well Industries holding that the HDPE Tape is correctly classifiable under Heading 3920.32.
2. The appellants subsequently claimed the refund of duty debited from the PLA on 12.7.90 and for an amount of Rs. 1829.17 paid under protest during the period 1.7.89 to 4.7.89. The said refund claim was considered by Asst Commissioner who allowed the same by observing that since the classification of the goods is finally settled and no additional duty was leviable, the duty recovered by the department under wrong tariff was liable to be refunded to the appellant. He also observed that doctrine of undue enrichment is not attracted as the goods on which duty was paid was captively consumed. Accordingly, he sanctioned the refund claim of Rs. 80,039/-.
3. On an appeal against the above order by the revenue, Commissioner (Appeals) set aside the impugned order by observing that the doctrine of unjust enrichment is applicable even when the goods are captively consumed, inasmuch as the duty paid on such goods form part of cost of the final product. The said order of the Commissioner (Appeals) is impugned before me.
4. I have heard Shri M.A. Patil, Ld. Consultant appearing for the appellants and Shri B. Chandra, Ld. JDR for the revenue. There is no dispute about the legal position of the principal of unjust enrichment which are applicable in the case of captive consumption, inasmuch as the issue stand settled by the Hon’ble Supreme Court decision in the case of Solar Pesticides. However the facts in the present case are different. The duty was not paid at the time of clearance for the consumption of HDPE Tapes. During the use of tapes captively the appellants were clearing the same under a bank guarantee furnished under Gujarat High Court’s stay order. When the stay was vacated, the appellant debited an amount of Rs. 78,211.74 by making one consolidated entry in the PLA Accounts. The appellants contention is that in cases of subsequent payment of duties the principal for unjust enrichment could not apply.
5. The Tribunal in the case of Silwester Textiles P. Ltd. reported in 2003 (58) RLT 93 (CEGAT-Mum.) has held that the refund is admissible as incidence of duty could not have been passed on to customer since duty amount was paid subsequent to clearance of the goods. Similarly in the case of Industrial Cables (I) Ltd. reported in 2002 (140) ELT 543 (Tri.Del.) it was held that where duty was paid not at the time of clearance of goods but only paid subsequently, the burden in such cases is on the department to prove that incidence of duty has passed on to buyers. In the present case also I find that duty was paid subsequently to captive use. The principal of unjust enrichment would not apply. The Commissioner has not examined the matter from the said angle and has accepted the revenue’s appeal by merely observing unjust enrichment is applicable.
6. I also take note of the latest decision of the Tribunal in the case of Plas Pack Industries – 2004 (167) ELT 422 (Tri. Mumbai) wherein under similar set of facts where the appellant was manufacturer Of HDPE tapes which were being captively consumed; paid the Additional Excise duty subsequent to captive consumption of claimed refund. The Tribunal observed that unjust enrichment would not apply. For the above decision, reliance was placed upon Tribunal’s order in the case of Gwalior Oil Mills – 2002 (52) RLT 648 and Punjab Beverages Pvt. Ltd. – 2000 (37) RLT 469 as also in the case of Easter Industries — 1999 (35) RLT 696.
7. As such I am of the view that the duty paid subsequently is required to be refunded to the appellants. However as regards the duty of Rs. 1829.17 it is for the appellant to show that the same was not hit by the unjust enrichement. For the said purposes, I remand the matter to the original adjudicating authority. Needless to say that the appellants would be afforded reasonable opportunity to rebut the assumption in respect of the above amount.
8. Thus appeal is partly allowed and partly remanded.
(Pronounced in Court)