2008 (8) TMI 736 - AT - Central Excise

Summary

Issues: Pre-deposit requirement for refund recovery based on unjust enrichment, applicability of Supreme Court judgment in M/s. Priya Blue Industries Ltd. v. CCE, eligibility for refund when credit notes are issued, consideration of Tribunal rulings.

Analysis:
1. The appellant was required to pre-deposit Rs. 2,82,200, as proceedings were initiated for recovery of a refund granted to them on the grounds of unjust enrichment. The appellant argued that since the original order was not appealed, as per the Supreme Court judgment in M/s. Priya Blue Industries Ltd. v. CCE, the recovery was not justified.

2. The learned Consultant contended that the Supreme Court held in the Priya Blue case that the original order must have been appealed, which was not done by the Revenue in this case. Therefore, the stay application was allowed, granting waiver of pre-deposit and staying the recovery until the appeal's disposal, in line with the Priya Blue judgment.

3. On the other hand, the learned JDR argued that issuing credit notes would make the appellants ineligible for a refund, citing the Tribunal ruling in Sangam Processors (Bhilwara) Ltd. v. CCE and the Supreme Court's confirmation in S. Kumar's Ltd. v. CCE, Indore. However, the Tribunal found that the Priya Blue judgment would apply to the present case, allowing the stay application and continuing the stay order even after 180 days.

4. The Tribunal's careful consideration led to the conclusion that since the original order was not appealed, the Supreme Court's ruling in the Priya Blue case would be applicable. Therefore, the stay application was granted, waiving the pre-deposit requirement and staying the recovery until the appeal's final disposal, with the stay order remaining in force beyond the usual 180-day period.