2001 (8) TMI 750 - AT - Central Excise

Summary

Issues Involved:
The issues involved in the judgment are the admissibility of Credit of Duty paid on inputs, rejection of refund claim by authorities, applicability of unjust enrichment principle, and interpretation of relevant legal provisions.

Admissibility of Credit of Duty on Inputs:
During the period from June 1984 to January 1986, the respondents were restrained from taking the Credit of Duty paid on various inputs for payment of duty on the final product. The Tribunal held that the set-off benefit under Notification No. 201/79 was available for three items. The respondents claimed refund of the duty paid on the final product as they could not utilize the Credit on inputs. The sale price of the final product was fixed by the government, and the respondents were obliged to sell at that price, negating the unjust enrichment argument.

Rejection of Refund Claim:
The Assistant Commissioner initially rejected the refund claim, stating it was not on account of differential duty paid on the final product but on the inputs consumed. The claim was remanded by the Commissioner (Appeals) but was rejected again by the Assistant Commissioner. The Commissioner (Appeals) later allowed the appeal, leading to the Revenue's present appeal.

Applicability of Unjust Enrichment Principle:
The Tribunal found that the case did not involve unjust enrichment as the respondents were entitled to Credit of Duty on inputs, which they would have utilized for payment of duty on the final product. The authorities' delay in granting permission for availing the benefit led to the respondents paying duty from their own account.

Interpretation of Legal Provisions:
The Tribunal cited precedents where the bar of unjust enrichment did not apply when the authorities' actions hindered Credit availment. The Revenue's argument regarding the bar of unjust enrichment for captively consumed inputs was deemed inapplicable to the present case. The Tribunal rejected the Revenue's appeal, emphasizing the exception of refund from the unjust enrichment principle under Section 11B.

In conclusion, the Tribunal found no merits in the Revenue's appeal and rejected the same based on the interpretation of legal provisions and precedents supporting the respondents' claim for refund of the Credit of Duty on inputs.