2000 (2) TMI 112 - HC - Central Excise

Summary

Issues Involved:
1. Validity of show cause notices.
2. Refund of amounts deposited during adjudication.
3. Applicability of Rule 233B and Section 11B of the Central Excise Act, 1944.
4. Concept of unjust enrichment.

Summary:

1. Validity of Show Cause Notices:
The petitioner, engaged in the manufacture of non-alcoholic beverage base, was issued show cause notices alleging contravention of Rules 9(1), 173C, 173F, 173G, and 226 of the Central Excise Rules, 1944. The notices demanded differential central excise duty and special excise duty totaling Rs. 2,86,90,828.68 and proposed penalties u/r 173Q(1). The petitioner challenged these notices, arguing that the respondent had no authority to issue them and that the amounts were wrongly withheld.

2. Refund of Amounts Deposited During Adjudication:
The petitioner deposited certain amounts with the Excise Department during adjudication. Despite the Central Excise and Gold (Control) Appellate Tribunal (CEGAT) setting aside the adjudicating authority's orders and directing consequential relief, the amounts were not refunded. The petitioner contended that these amounts were deposits, not duties, and should be refunded following the Tribunal's order.

3. Applicability of Rule 233B and Section 11B of the Central Excise Act, 1944:
The Revenue argued that the amounts were duties, not deposits, and that refunds should follow the procedure u/s 11B, which includes ensuring the burden was not passed to consumers. They also cited non-compliance with Rule 233B, which requires payments under protest to be acknowledged by the proper officer. The court held that Rule 233B applies at the time of clearance, not retrospectively, and that the amounts paid during adjudication were deposits, not duties. Therefore, the procedural requirements of Rule 233B and Section 11B did not apply.

4. Concept of Unjust Enrichment:
The court rejected the Revenue's argument of unjust enrichment, noting that the petitioner did not collect additional amounts from consumers. The court emphasized that the amounts were deposits made to avoid interest during the adjudication process and were not duties collected from consumers. Consequently, the doctrine of unjust enrichment did not apply.

Conclusion:
The court directed the Revenue to refund the deposited amounts within four weeks, with interest calculated from the date of the CEGAT order. If the refund was delayed, the Revenue would have to pay interest at 18% per annum for the subsequent period. The petition was allowed, and the rule was made absolute with no order as to costs.