9911796707
TMI Blog2007 (11) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... ct classification under Chapter 39. Subsequently, the Govt. of India issued order No. 8/92, dated 24-9-1992 u/s 37B of CEA, 1944, classifying the tape under sub heading 3920.32 and sack made there from under sub heading 3926.90 and directed the authorities to demand duty under Chapter 39 and to adjust the modvat and grant refund, if any. Accordingly, the respondent filed the refund claim on 24-6-1996 for the period 1-7-1989 to 25-5-1992. 3. The said refund claim made by the respondent made various rounds of litigation before the Commissioner (Appeals) as also before Tribunal and various orders passed in de novo proceedings, as detailed in the impugned order of the Commissioner (Appeals). The matter finally came before the Commissioner (Appeals), who allowed the refund along with payment of interest in terms of Para 11BB of CEA, 1944. For better appreciation, we reproduce the Paras 10 & 11 of the Commissioner (Appeals)'s order. "10. I have carefully gone through the facts of the case and submissions made by the appellants in their appeal memorandum as well as during the personal hearing on 21-6-2006. The CESTAT vide Order dated 23-6-2005 has directed the original adjudicating auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not eligible for any Modvat credit during the material time whereas on other hand the goods falling under Chapter 39 was eligible for Modvat credit. Further by classifying the Tapes under Chapter 54 of CET by the Department, the appellants had been deprived from Modvat credit which was their legitimate right under Chapter 39 of CET. Further if the appellants would have been permitted to take credit on granules used in the manufacture of tapes they would have utilized such credit to discharge the duty liability on tapes instead of paying in cash (PLA) and to that extend the issue of refund need to be re examined. I find during the period 1989-90 & 1990-91 appellants have opted to pay duty on finished goods i.e bags/sacks under Notification 53/88-CE and have availed exemption on tapes at intermediate stage under captive consumption exemption under Notification No. 217/86-CE. Further while paying duty on bags/sacks appellants could have utilized Modvat credit earned on granules as there was no condition in this notification that no Modvat credit is availed of under Rule 57A of Central Excise Rules, 1944. As regards financial year 91-92 upto 25-5-1992 the appellants have opted to pay d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not admissible. I thus observe from the case file that it is not a case of refund of duty paid on intermediate products namely tapes under Chapter 54 during the relevant time, which was captively consumed in the manufacture of sacks/bags but is a case of refund of Modvat credit which was not allowed to them as the tapes were classified under Chapter 54 of CET, which was not covered under the modvat scheme during the material time. I thus hold that this is a case of refund of Modvat credit consequent to reworking of the duty liability as per option exercise by the appellants during the period 89-90 to 25-5-1992. This is exactly what Tribunal intended in its order dated 23-6-2005. I thus hold that the principle of unjust enrichment is not applicable in this case in view of the proviso to clause(c) of Section 11B(2) of the Central Excise Act, 1944. As regards quantum of refund which is admissible to appellants I find that although the appellants have revised their claim to Rs. 31,67,642/- vide letter dated 4-3-2005 and reiterated the same while filing their letter dated 17-10-2005 consequent to CESTAT order dated 23-6-2005 but the SCN was issued for credited the refund of Rs. 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner (Appeals). Hence, it can be fairly said that the assessee was not eligible for refund on merits till 29-6-2000.' (2) Thereafter, the assessee enhanced the claim of refund to Rs. 36,22,498.00 vide their letter dated 8-6-2001. Here the assessee changed their stand and made a plea that it is not a case of refund of duty paid on intermediate goods but is a case of refund of Modvat credit which was not allowed to them as the tapes were classified under chapter 54 of CETA, which was not covered under Modvat scheme. This was done after Hon'ble Tribunal had allowed the departmental appeal vide its order dated 29-6-2000. (3) Again, the appellants have revised their claim to Rs. 31,67,642.00 vide their letter dated 4-3-2005 which was contested by Department by filing an appeal before the Tribunal. The Tribunal vide final order dated 23-6-2005 remanded the case back to the original adjudicating authority to re-determine the refund on sacks, if any and the bar of unjust enrichment after working out the demands and actual discharge of duty on tapes and the issue of claim of interest was to be determined after that. (4) Hence, the entire issue of refund whether admissible on merits o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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