2015 (2) TMI 305 - AT - Central Excise

Denial of refund claim - assessee has paid the duty as per the new cart data submitted upto spindle stage - Bar of unjust enrichment - Finalization of assessment - Issuance of Show cause notice - Held that - In appellants own case for the earlier period the Ld commissioner in the similar proceedings has observed that the assessment which was finalized on 25.05.2003 was reopened in the show cause notice dated 25.05.2004 issued under section 11A. Once the assessment is reopened then all issues can be raised by the appellants and as such the Adjudicating Authority was bound to consider the refund claim on merits. - when the Commissioner (A) in appellants own case for the earlier period has taken up view that when Show Cause Notice has been issued to the appellant for the same period where assessment has been finalized in that case appellant can raise all the issues on merits and relying on the decisions of this Tribunal in the case of Polydyne Corporation, I hold that in this case also when the show cause notice was issued on 29.12.2004 for the said period the appellant was at the liberty to raise all the issues in defence of the show cause notice issued to them. In these circumstances, I hold that order dated 15.01.2004 is nonest and non cooperative. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Denial of refund claim on the basis of unjust enrichment.
2. Validity of the order dated 15.01.2004 in relation to the refund claim.
3. Appellant's entitlement to raise all issues before the Adjudicating Authority.

Analysis:
1. The appellant appealed against the denial of the refund claim due to the burden of unjust enrichment not being passed to the buyer. The appellant failed to prove that they did not pass on the duty incidence to the buyer, leading to the rejection of the refund claim. The appellant contended that the assessment for the financial year 2002-2003 was finalized on 15.01.2004, but a show cause notice was issued on 29.10.2004 for the same period. The appellant argued that the order dated 15.01.2004 should be considered non est and non-operative, entitling them to the refund claim. The appellant cited the case of Polydyne Corporation to support their claim that when an assessment is reopened, all objections can be raised. The appellant requested a remand for reconsideration of the refund claim.

2. The respondent opposed the appellant's argument, stating that the order dated 15.01.2004 finalized the assessment up to the spindle stage, and a subsequent show cause notice was issued for activities post-spindle stage. The respondent relied on legal precedents to argue that since the assessment was not challenged, the appellant was not entitled to the refund claim. Citing cases like Priya Blue Industries Ltd. and C.C.E. Kanpur Vs. Flock (India) Pvt. Ltd., the respondent supported the rejection of the refund claim by lower authorities.

3. The Tribunal considered the submissions from both parties and reviewed the case law presented. It noted that the assessment had been finalized up to the spindle stage on 15.01.2004, with a show cause notice issued for a different period. Relying on the decision in Polydyne Corporation, the Tribunal held that when an assessment is reopened, the appellant can raise all issues before the Adjudicating Authority. Referring to a previous case involving the appellant, where the assessment was reopened, the Tribunal emphasized that all issues could be raised in such circumstances. Therefore, the Tribunal concluded that the order dated 15.01.2004 was non est and non-operative, setting aside the impugned order and remanding the matter for reconsideration of the refund claim on its merits. The appeal and cross-objections were disposed of accordingly.