2016 (1) TMI 324 - SC - Central Excise

Refund claim by the buyers of goods of excess duty paid by the manufacturer - unjust enrichment - period of limitation - Earlier the classification dispute ultimately came to be settled in favour of M/s. Fenner (India) Limited who did not claim refund of differential duty on the goods - Held that - We find that despite National Winder 2003 (3) TMI 116 - SUPREME COURT OF INDIA has been held to be per incuriam, this Court in Allied Photographics India Ltd. 2004 (3) TMI 63 - SUPREME COURT OF INDIA has referred the same matter to a larger Bench in the light of the conflicting decisions which it found between two Division Benches of this Court and paragraph 104 of the judgment in Mafatlal Industries Ltd. 1996 (12) TMI 50 - SUPREME COURT OF INDIA which is a Bench of seven Hon ble Judges of this Court. We have been informed by counsel for both the parties that the larger Bench has yet to decide this issue. Matter adjourned till the final decision is delivered by the larger bench in this regard.

Summary

Issues:
Classification dispute resolution, refund claims rejection, time-barred refund claims, application of previous judgments, adjournment for larger Bench decision.

Classification Dispute Resolution:
The appellants, Public Sector Undertakings engaged in coal mines, sell coal at prices fixed by the Coal Ministry without paying Central Excise duty. A classification dispute arose between the Department and M/s. Fenner (India) Limited, the producer who paid duty under protest. The dispute was settled in favor of M/s. Fenner (India) Limited, but their buyers, the appellants, filed refund claims. The First Appellate Authority rejected the refund claims as time-barred, leading to an appeal to CESTAT, which also dismissed the appeal, prompting the appellants to file Civil Appeals before the Supreme Court.

Application of Previous Judgments:
The Supreme Court noted that a previous order dismissing the Civil Appeal was later reviewed, allowing the present appeal to be admitted. The Tribunal correctly applied the decision in Allied Photographics India Ltd. as it found the judgment in National Winder to be per incuriam. Despite this, the Court referred the matter to a larger Bench due to conflicting decisions between Division Benches and a judgment by a Bench of seven Judges in Mafatlal Industries Ltd. The larger Bench is yet to decide on the issue, leading the Court to adjourn the present matters until the larger Bench's decision is available.

Refund Claims Rejection and Time-Barred Claims:
The Department opposed the refund claims by the appellants on grounds of limitation and unjust enrichment. The First Appellate Authority and CESTAT rejected the refund claims as time-barred. The appellants' appeals to the Supreme Court were based on challenging these rejections and seeking a resolution in their favor.

Adjournment for Larger Bench Decision:
In light of the unresolved issue awaiting a decision by a larger Bench, the Supreme Court adjourned the present appeals to await the outcome of the larger Bench's decision in a related case. This adjournment was deemed necessary to ultimately resolve the issue at hand based on the decision of the larger Bench.