2008 (9) TMI 730 - AT - Central Excise

Summary

Issues:
1. Dispute over Annual Production Capacity under Compounded Levy Scheme.
2. Refund of excess duty paid during the relevant period.
3. Crediting refund into the consumer welfare fund under Section 12A due to alleged passing on of duty burden.
4. Appeal against adjudicating authority's order.
5. Application of unjust enrichment principle.
6. Finding of fact by Commissioner (Appeals) that duty was not recovered from customers.
7. Revenue's challenge to the application of unjust enrichment principle.

Analysis:

1. The case involves a dispute regarding the Annual Production Capacity of a company engaged in manufacturing hot re-rolling products of non-alloy steel under Chapter 72 of the Central Excise Tariff Act. The dispute arose due to the introduction of the Compounded Levy Scheme, which led to the fixation of the Annual Production Capacity by the Commissioner of Central Excise. Appeals were filed, and the matter was eventually settled by the Commissioner (Appeals) resulting in a refund of excess duty paid during the relevant period.

2. The adjudicating authority sanctioned the refund claim but credited it to the consumer welfare fund under Section 12A of the Act, alleging that the company failed to prove that the duty burden was not passed on to customers. This action was challenged by the company, leading to an appeal before the Commissioner (Appeals) in Ahmedabad.

3. The Commissioner (Appeals) allowed the appeal on the grounds that the principle of unjust enrichment did not apply, citing a judgment of the Hon'ble Gujarat High Court in a similar case. The Commissioner also examined the issue on merits and concluded that the duty element was not recovered from customers based on detailed submissions and evidence provided by the company.

4. The Revenue, dissatisfied with the Commissioner (Appeals) order, contested the finding that the principle of unjust enrichment did not apply to goods cleared under the Compounded Levy Scheme. The Revenue's appeal primarily focused on this aspect, citing a judgment from the Hon'ble CESTAT, South Zonal Bench, Bangalore, to support their argument.

5. The Tribunal noted that the Revenue did not challenge the fact-finding by the Commissioner (Appeals) that the duty was not passed on to customers. Detailed evidence presented by the company, including worksheets and sales invoices, supported this finding. Since the Revenue did not rebut this finding in their appeal, the Tribunal upheld the Commissioner (Appeals) order, rejecting the Revenue's appeal.

In conclusion, the Tribunal affirmed the decision of the Commissioner (Appeals) based on the evidence presented, the application of the unjust enrichment principle, and the lack of challenge by the Revenue regarding the finding that the duty was not passed on to customers.