2008 (2) TMI 187 - AT - Central Excise

SSI exemption Not. 09/02 opted by assessee for payment of duty at concessional rate - appellant discharged full rate of duty on few clearances - aberration in respect of few of the clearances wouldn t disentitle the appellants of the substantial benefit of this Notification - insistence on payment of full rate of duty for the entire period isn t correct - appellant is entitled for refund since the differential duty was paid after the clearance - no question of unjust enrichment appeal allowed

Summary

Issues:
Appeal against Order-in-Appeal denying benefit of SSI exemption Notification No. 09/2002 due to payment of full duty rate in certain clearances.

Analysis:
The appeal was filed against the Order-in-Appeal No. 153/2005 Central Excise, which denied the benefit of SSI exemption Notification No. 09/2002 to the appellants. The audit party observed that the appellants had paid the full duty rate instead of the concessional rate for certain clearances, leading to the insistence on payment of entire duty liability for the year. The appellants contended that they were entitled to the benefit of the Notification and filed a refund claim, which was rejected. The Commissioner (Appeals) upheld the rejection, prompting the appeal to the Tribunal for relief.

During the hearing, it was highlighted that the appellants had indeed opted for the benefit of SSI Notification No. 09/2002, requiring payment at a concessional rate. The Revenue argued that paying the full duty rate on some clearances violated the Notification's conditions, implying an opt-out from the benefit. The Tribunal noted that while the appellants paid a higher duty rate in certain cases, there was no provision for opting out of the Notification once chosen. As there was no formal declaration of opting out, the Tribunal concluded that the appellants should not be denied the Notification's benefit for the entire period. The Tribunal found the insistence on full duty payment incorrect and ruled in favor of the appellants, allowing the appeal and granting them a refund for the differential duty paid after clearance, ensuring no unjust enrichment.

In conclusion, the Tribunal's decision emphasized that despite the appellants' deviation in paying higher duty rates for some clearances, they remained entitled to the substantial benefit of Notification No. 09/2002. The lack of a formal opt-out procedure meant the appellants should not be penalized for the aberration, leading to the allowance of the appeal and the subsequent refund for the excess duty paid.