2008 (7) TMI 714 - AT - Central Excise

Summary

Issues involved: Refund claim for excise duty paid on inputs, retrospective effect of Notification No. 225/86-C.E., unjust enrichment, applicability of Section 11B of the Central Excise Act.

Refund Claim: The appellants, engaged in manufacturing polyester products, claimed a refund for excise duty paid on monoethylene glycol (MEG) used in their final products during a specific period. The claim was made under the Central Duties of Excise (Retrospective Exemption) Act, 1986. The Department raised objections stating that the Act did not allow refunds for input duty and questioned the lack of evidence regarding passing on the duty to customers.

Retrospective Effect of Notification: The Tribunal noted that the Supreme Court's judgment in Collector v. Sirpur Paper Mills Ltd. established that the benefit of set-off under Notification No. 225/86-C.E. was available to manufacturers from 1-3-1986 retrospectively. This decision supported the appellants' case. Additionally, the Tribunal cited precedents like Indian Petrochemical Corporation Ltd. v. Commissioner and Kesar Enterprises Ltd. v. Commissioner to uphold the appellant's argument against unjust enrichment and the inapplicability of Section 11B of the Central Excise Act to the refund claim.

Conclusion: After considering the submissions and legal precedents, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellants. The decision was pronounced in open court on 1-7-2008.