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2011 (7) TMI 984 - CESTAT, NEW DELHIManufacturing from bought out items - Assembly - Whether the respondents had right to realise the duty from the buyers on CJK when such goods were not manufactured and were not dutiable - Held that:- prior to the judgment of the Tribunal and the Apex Court, the respondents were paying duty on the CJK by treating the same as excisable as the department was of the view that the process of assembly of CJK amounts to manufacture. However, the respondent continued to pay the duty on CJK even after the decision of this matter in their favour by the Tribunal’s order and upholding of the Tribunal’s order by the Hon’ble Supreme Court vide judgment dated 3-3-2001. So long as the respondent were paying duty on the CJK, they could always recover the same from their customers as central excise duty is an indirect tax and there is no prohibition in the Central Excise Act, 1944 or the Rules made thereunder in this regard. Provisions of section 11D - held that:- since the amount collected in respect of sale of CJKs as excise duty was paid by the respondent to the Government and as such, there is no contravention of the provisions of Section 11D, the question of asking them to pay this amount to the Government does not arise. Whether the respondent are entitled to adjustment of the duty payable on the intermediate products manufactured by them against the duty paid on CJKs which were not dutiable - Held that:- The process of adjustment of duty paid on CJK on which no duty is payable, towards duty liability in respect of the intermediate products, on which duty is payable, amounts to just changing the head under which the duty had been paid and so long as the duty is not being refunded to the respondent, there would not be any unjust enrichment. - refund of tax means giving the tax paid back to the assessee, which he can use the way he wants and the same can not be equaled with adjustment of tax paid under some head which was not payable, against tax liability under some other head, which is to be discharged. For such adjustment no application under Section 11B is required - Decided against the revenue by third member decision.
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