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Commissioner of Central Excise, Kanpur Versus M/s Kanpur Plastic Pack Ltd.

2016 (11) TMI 481 - ALLAHABAD HIGH COURT

Refund - principles of unjust enrichment - section 35H(4) of Central Excise Act, 1944 - whether the rejection of refund on the ground of " undue enrichment" that duty was paid on intermediate products and question of passing on incidence of duty to customers does not arise is justified? - Held that: - in order to attract plea of "unjust enrichment" under section 11B(1), Reference made by Tribunal to Section 11B(2) proviso (c) is not justified as the said provision is not attracted. However, refu .....

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e Opposite Party : Anubhav Chandra ORDER 1. Heard Shri Praveen Kumar, learned counsel for applicant Revenue and Shri Aasutosh Agrawal, learned counsel for respondent, Assessee. 2. The following questions have been referred for adjudication under section 35H(4) of Central Excise Act, 1944 (hereinafter referred to as "Act, 1944"). "1. Whether Tribunal has correctly applied provisions contained in proviso (c) to sub section (2) of Section 11B of Central Excise Act, 1944, which afford .....

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ve been captively consumed, when the said refund has not arisen in accordance with the Rules made or any Notification issued under the Central Excise Act, 1994?" 3. The bare minimum facts, necessary to deal with these questions, as evident from record, are stated as under: 4. M/s Kanpur Plastipack Ltd, Panki Industria Area, Kanpur (hereinafter referred to as the respondent) are manufacturer of HDPE/Polypropylene Tapes, fabrics and sacks - both laminated and unlaminated. Their starting raw-m .....

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apter 54, 59 and 63, though under protest. Later, on a judgment of Tribunal in some other matters, Assessee sought revision of classification of furnished product to Chapter 39. It filed a classification list No.2/89 effective from 11.7.1989 classifying furnished products under various headings of Chapter 39. Revised classification list was not approved by Assistant Collector who ordered on 19.1.1990 to continue classification of furnished goods under various headings of Chapters 54, 59 and 63. .....

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relief to Assessee. 7. Based on the order of Tribunal, dated 21.9.1992, Assessee submitted an application dated 15.3.1993 before Assistant Commissioner claiming refund of Central Excise Duty of ₹ 1,85,84,873/- paid by him on Tapes during 1.3.1986 to 11.2.1990 on the ground that Tribunal has held these tapes classifiable under Chapter 39 and since these tapes were consumed by Assessee for manufacture of fabric, again a Chapter 39 product, the same was exempt from duty. The application remai .....

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following observations: (a) the ground of rejection of refund claim i.e undue enrichment is not sustainable, as the duty was paid on intermediate products and the question of passing on of incidence of duty to the customers does not arise; and (b) in the instance case, duty has been under protest and hence limitation of six months does not apply as per the provisions of Section 11-B of Excise Act. 8. Assistant Commissioner again passed order dated 30.6.1998 after remand, wherein he dropped objec .....

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8, set aside order 30.6.1998 and directed for refund of ₹ 1,16,28,268/-. CCE(A) determined amount of refund after adjusting duty, to ₹ 3,71,57,046/- on fabrics which became payable by virtue of settlement of classification dispute and allowing Modvat credit of duty on inputs, to ₹ 3,02,00,441/- and adjustment of duty of ₹ 1,85,84,873/- paid from PLA at the tape stage. According to CCE(A), admissible refund was calculated as [Rs.3,02,00,441+Rs.1,85,84,873 - ₹ 3,71,57 .....

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B of the Central Excise Act, according to which the bar of unjust enrichment does not apply to the refund of credit of duty paid on excisable goods used as inputs, in accordance with the Rules made, or any notification issued under the Excise Act. (c) The finding of the lower appellate authority that requirement of cost data on HDPE tape is irrelevant, since duty on tape was paid at specific rate and that verification of modvatable document showed the total credit available, the amount of duty p .....

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ned questions of law, arising from Tribunal's order dated 25.10.2000. 12. In the present case record shows that order of CCE(A) dated 31.1.1996 itself decided the issue and held that there was no question of rejection of refund on the ground of " undue enrichment" since it was not sustainable, as duty was paid on intermediate products and question of passing on incidence of duty to customers does not arise. This order of CCE(A) attained finality since Revenue did not challenge this .....

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