ORDER
S.S. Sekhon, Member (T)
1.1 The issue in the present case is whether or not the principles of unjust enrichment can apply when the assessments are still provisional under Rule 9 B and have not yet been finalised.
2.1 Since 1980, the Appellants had been purchasing duty-paid jumbo rolls of polyester film, which had been lacquered with chemicals, these jumbo rolls after bringing them to the appellants premises are slit and padded.
2.2 As the aforesaid process of slitting and packing did not amount to a process of manufacture no excise duty was paid by the appellants, between 1980 and 1988.
2.3 By a show cause notice dated 12/7/1988 it was alleged that the process of cutting/slitting and packing undertaken by the appellants amounted to a process of manufacture. The Appellants were therefore called upon to show cause why they should not pay Central Excise duty for the period March 1986 to 4/2/1988.
2.4 During the pendency of the aforesaid show cause notice, the Appellants were compelled to take out a L4 license the Central Excise Rule 1944, which they did under protest on 29/10/1988. They also filed Classification Lists under protest 1988 onwards. These Classification Lists were provisionally approved from time to time under Rule 9 B. The Appellants duly executed B-13 bonds with security of 25 percent in the shape of a bank guarantee From 29/10/1988, the Appellants paid duty under protest and the assessments were all kept provisional.
2.5 By an order dated 30/4/1991, the Collector of Central Excise set aside the aforesaid show cause notice and held that the process of cutting/ slitting and packing of duty-paid jumbo rolls of polyester film did not amount to a process of manufacture.
2.6 The appeal against this order has been dismissed by this Hon’ble Tribunal.
2.7 In view of the same the Appellants filed a refund claim on 28/8/1991 claiming a refund of Rs. 28,38,512/- in respect of the duty paid under protest during the period 29/10/1988 to 30/3/1991.
2.8 On 8/1/1993, the Appellants filed a refund claim under the amended Section 11 B stating, inter alia, that the Appellants had not passed on the duty and had in fact borne the duty burden themselves.
2.9 By a show cause notice dated 22/8/1995, the Appellants were called upon to show cause why the refund claim should not be rejected on the ground that the amount of duty had been passed on to the buyers through various gate passes at the time of clearance and that therefore the refundable amount should be credited to the Consumer Welfare Fund.
2.10 The Appellants filed before the Assistant Commissioner an affidavit of one Mr. Ashok Sharma explaining that the excise duty had been borne by the Appellants. Invoices and relevant documents were annexed thereto to show the same.
2.11 By an order dated 12/10/1995 the Assistant Commissioner grained a refund of only Rs 4.08 lakhs and rejected the remainder on the ground of unjust enrichment, and credited to same to the Consumer Welfare Fund.
2.12 By an order dated 18/2/2000 the Commissioner of Central Excise (Appeals) rejected the appeal. Hence this appeal.
3.1 It is now well settled that the principles of unjust enrichment do not apply when the assessments are provisional & on a refund arising out of the finalisation of a provisional assessment on Mafatlal Industries Ltd v. UOI 1997 (89) E.L. T. 247 (para 95) (5. C) & in the case before us, Till date the assessments have remained provisional. No order has been passed, finalising the assessments after the order of the Collector was passed. The show cause notice dated 22/8/1995 has been issued only for rejecting the refund on the ground of unjust enrichment and not for finalising the assessments.
3.2 It was incumbent upon the. Assistant Commissioner to have first finalised the assessments and the classification lists in the light of the order of the Collector on “Manufacture”. Had the Assistant Commissioner finalised the assessments in accordance with the order of the Collector, he would have had no option but to grant refund of the duty, as such refund is not subject to Section 11 B as is well settled that the provisions of Sub-rule (5) of Rule 9 B of the erstwhile Central Excise Rules are not retrospective in operation and merely because the Departmental Authorities took a long time to process the application for the refund, the rights of the Appellants do not get defeated by the subsequent amendment made in Rule 9 B (5). See CCE, Chennai v. TVS Suzuki Ltd 2003 (156) E.L. T. 161 (SC). In the circumstances, in view of the order of the Collector, which has been accepted by the Department and has become final and binding on the Department. It is found that the Assistant Commissioner has failed to finalise the assessments and refund amounts claimed by the Appellants from the amount as paid i.e. as submitted to be Rs. 24,30,339/-; together with interest, as per the law.
3.3 This appeal is therefore disposed of as remand to the Assistant Commissioner to consider the affidavit of Ashok Kumar Sharma and other material that the assessee places on record, quantying the amounts due as referred & interest as per law & pay the same. Appeal allowed in above terms
(Pronounced in Court)