TaxTMI 
TaxTMI 
2017 (12) TMI 329
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....Swan Mill Ltd are manufacturers of Yarn and Fabrics falling under Chapters 52, 54 & 55 of the Schedule to the Central Excise Tariff Act, 1985. Apart from sale to the Customers they also use Cotton Yarn and blended yarn for captive consumption in manufacture of fabrics. A refund claim for Rs. 28,80,595/- (later amended to Rs. 29,25,044/-) was filed by them on 03.04.1996 on the ground that they have paid excess duty on their finished goods for the period April 1994 to March 1995 as per the report of the cost audit department approving the assessable value of yarn. They also filed Refund claim of Rs. 54,66,421/- (later amended to Rs. 55,92,105/-) for the period September 1996 to April 1997 and Rs. 1,39,323/- for the period September 1996 June 1997 on 7.8.1998 on the ground that they have paid duty on blended yarn and cotton yarn at spindle point, though the same was exempted in terms of Notification No. 22/96-CE dt 23.7.1996. They were issued three Show Cause Notices proposing rejection of the claim on the ground of unjust enrichment. Vide Order dt. 14.09.98 the claim for Rs. 54,66,421/- and Rs. 1,39,323/- were rejected on the ground that the Appellant has not submitted evidence to th....
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....t and hence such credit is not hit by the doctrine of unjust enrichment, in view of its coverage under clause (c) to first proviso to sub-section (2) of Section 11B of the Central Excise Act, 1944, and in a case where the Revenue in its appeal had not challenged the findings of the Commissioner (Appeals)'s Order-in-Appeal dated 28-3-2002 (at Exhibit- J ) holding that unjust enrichment is not applicable and further, Assistant Director (Cost), in his report dated 12-9-2000 has categorically reported that refund is not hit by unjust enrichment Whether the Tribunal was correct to hold in Appeal Nos. (2) E/3142/02 & E/3143/02 that the refund claims are barred by limitation, in a case where, the limitation would start from the finalisation of provisional assessment, based on the Hon ble Supreme Court's judgment in Samrat International [1992 (58) E.L.T. 561 (S.C.)] and in any case limitation was not the ground before Original Authority for denial of refund 3. Very few facts are required to be noted for appreciating the argument of Mr. Patil, learned counsel appearing for the appellants. The appellants are engaged in the manufacture of textile yarn and fabrics and at th....
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....re filed by the appellants. In the meanwhile, even the Department's appeals were found to be ripe for hearing. A common order was passed deciding the Department's appeals as well as the appellants appeals. The Tribunal has concentrated itself on the plea of limitation and held that the refund claims are barred by limitation. 6. However, the appellants pointed out certain basic and fundamental errors in the Order of the Tribunal by filing applications for rectification of mistakes. These applications have also been rejected on 2-12-2005. 7. Against the above two orders, the present appeal is filed by the assessee. 8. We have found from a reading of the Tribunal's order and it is difficult to make out as to what prevailed upon the Tribunal to pass a cryptic order and by holding that there is substance in the Departmental objection on the point of limitation. 9. The Tribunal concluded that the doctrine of unjust enrichment can be invoked but that aspect was not elaborated further. Midway the Tribunal holds that there is substance in the Department's objection on the point of limitation and therefore concentrated its entire attention towa....
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....the doctrine of unjust enrichment would apply. That no documentary evidence was produced to show that the duty element was not passed on to the buyer of goods. The duty element was included in the price of goods. In terms of Section 12 B it is presumed that duty incidence has been passed on to the buyers. It does not make difference between refund of duty on direct sale and goods consumed captively. He relied upon the Orders in case of COMMR. OF C. EX., CALCUTTA Vs. HINDUSTAN NATIONAL GLASS & INDUS. LTD. - 2005 (182) ELT 12 (SC) and METAL FORGINGS Vs. UOI - 2002 (146) ELT 241 SC that an order should be there under Rule 9B to show that the clearance was on provisional basis. 5. We have gone through the facts and written submission made by both the sides. We find that Appeal No.E/4020-R/99 has been filed by the revenue on the ground that the bar of unjust enrichment would apply to captive consumption also. In case of Appeal No.E/3142-43/2000 filed by M/s Swan Mills against OIA dt. 29.03.2002 of the Commissioner (Appeals), we find that M/s Swan Mills had paid duty on Yarn used captively in manufacture of Fabrics which was otherwise not exempted. The Commissioner (Appeals) while reman....
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.... ELT A-96 (SC). Further the Bar of unjust enrichment would not apply for refunds which has arisen out of deemed finalization of assessment i.e from the AD(cost) report/ certificate in which it was shown that the incidence of duty was not passed on. This fact is appearing in adjudication order dt. 1.1.2001 and 9.1.2001 which is reproduced below: Adjudication order dt. 1.1.2001. "In support of the claim the assessee has furnished the following documents which were thoroughly examined and scrutinized by the Assistant Director (Cost) from the cost angle to see whether the duty of yarn twice paid has been passed on to the customer by the assessee or not and he opined in his letter issued under F. No.ADC/III/10-12/2000/Swan Mills dated 12/9/2000, that their refund is not hit by unjust enrichment and is payable to the party. The observation of Assistant Director (Cost) is as follows: On verification of proforma M regarding cost of sales of cloth for the year 1996-97 and 1997-98, it was observed that in most of the cases, cloth was sold in heavy losses and there was overall loss in the sale of cloth. Hence the excess duty paid on captively consumed yarn is not passed on the "consumers"....