2005 (2) TMI 670 - AT - Central Excise

Summary

Issues:
- Liability to pay duty on Ghee produced by a Co-operative Milk Union following its excisability in the 1998-99 Budget.
- Refund claim for duty paid on Ghee stock in depots prior to exemption from Central Excise duty.
- Rejection of refund claim due to lack of documentary proof on stock removal before duty levy.
- Interpretation of unjust enrichment provision in relation to duty payment post-clearance from the factory.

Analysis:
The judgment by the Appellate Tribunal CESTAT, New Delhi dealt with the liability of a Co-operative Milk Union to pay duty on Ghee after it became excisable in the 1998-99 Budget. The appellant had paid duty on existing Ghee stock, including that in depots, before a subsequent exemption from duty. The appellant filed a refund claim for the duty paid on unsold depot stock, which was rejected due to the absence of documentary proof of stock removal pre-duty levy.

Upon review, the Tribunal considered the appellant's argument that duty was not applicable to stock in depots at the levy's introduction if already removed from the factory. Citing a Division Bench decision, the Tribunal noted that duty post-clearance from the factory did not invoke unjust enrichment provisions. The Tribunal ruled that duty on Ghee post-2-6-1998 levy did not apply to goods removed prior, making the duty payment erroneous. The Tribunal emphasized that the Division Bench decision did not differentiate between clearance and sale, thus supporting the appellant's refund claim.

The judgment highlighted the distinction between duty liability on goods post-levy and those already removed, emphasizing the legality of the appellant's refund claim. It clarified that duty paid after goods clearance did not trigger unjust enrichment concerns, aligning with the Division Bench decision's interpretation. The Tribunal's decision allowed the appeal, granting relief to the appellant in accordance with the legal principles discussed.