2005 (7) TMI 480 - AT - Central Excise

Summary

Issues Involved:
1. Entitlement to small scale exemption under Notification No. 1/93-C.E.
2. Refund claim and limitation period.
3. Refund claim and unjust enrichment.

Issue-wise Detailed Analysis:

1. Entitlement to Small Scale Exemption under Notification No. 1/93-C.E.:
The primary issue revolved around whether the use of the letters 'IC' on metal containers manufactured by M/s. K.P. Electricals Pvt. Ltd. disqualified them from availing the small scale exemption under Notification No. 1/93-C.E. The Revenue contended that 'IC' was a brand name of M/s. Indian Container Ltd., thereby making M/s. K.P. Electricals Pvt. Ltd. ineligible for the exemption. However, the respondents argued that 'IC' was not a brand name but merely an identifier for containers manufactured for M/s. Indian Containers Ltd. The Commissioner (Appeals) referred to various judicial decisions, including the Supreme Court's ruling in Astra Pharmaceuticals (P) Ltd. v. Collector, which distinguished between a house mark and a product mark. The appellate authority concluded that 'IC' was used to identify the manufacturer and not as a brand name or trade name of the product, thereby allowing the exemption. The Tribunal upheld this view, rejecting the Revenue's appeal.

2. Refund Claim and Limitation Period:
The second issue concerned the refund claim of Rs. 5,29,252/- deposited by the respondents before the issuance of the show cause notice. The Deputy Commissioner had rejected the refund claim on the grounds of limitation, as it was filed after 3 1/2 years. However, the Commissioner (Appeals) ruled that the duty deposited during the pendency of proceedings is not subject to the limitation bar and becomes refundable when the order confirming the duty is set aside on appeal. The Tribunal supported this interpretation, emphasizing that deposits made during adjudication are not hit by the limitation period and must be refunded upon the success of the appeal.

3. Refund Claim and Unjust Enrichment:
The third issue addressed the Assistant Commissioner's order directing the refund claim to be credited to the consumer welfare fund on the grounds of unjust enrichment. The Commissioner (Appeals) overturned this decision, citing various Tribunal decisions and a Board circular clarifying that pre-deposits should be treated differently from duty and should be refunded if the appeal is successful. The Tribunal agreed, noting that deposits made during proceedings are not subject to unjust enrichment and should be refunded to the assessee. The Tribunal also referenced Circular No. 572/9/01-CX., dated 22-2-2001, which supports this view.

Conclusion:
The Tribunal dismissed all three appeals filed by the Revenue. It upheld the Commissioner (Appeals)'s decision that the use of 'IC' did not disqualify the respondents from the small scale exemption, that the refund claim was not barred by limitation, and that the refund was not subject to unjust enrichment. The Tribunal emphasized that refunds should not be withheld solely because an appeal is pending unless a stay has been obtained.