2018 (7) TMI 4 - AT - Central Excise

Request for Remand - Refund claim of duty retained on inputs which is attributable to the use of electricity for purpose other than manufacture - duty was paid under protest - Held that - Though the Tribunal did remand the matter back to the original authority for the limited purpose of ascertainment of the applicability of the bar of unjust enrichment granting liberty to the appellant to produce before the adjudicating authority a copy of the order of the appellate authority dated 28th March 2002 related to their claim that the issue has already been settled, subject to some adjustment, in their favour - appeal dismissed - decided against appellant.

Summary

Issues:
1. Refund claim of duty paid under protest by the appellant.
2. Appropriation of the refunded amount to different funds.
3. Dispute regarding the retained amount by the original authority.
4. Admissibility of the refund claim based on remand order.
5. Applicability of the bar of unjust enrichment.
6. Appeal challenging the denial of exemption benefit.
7. Upholding of the order retaining a portion of the duty amount.

Analysis:
1. The dispute originated from a payment made under protest by the appellant in 1998 amounting to ?6,96,37,137 for the usage of naphtha as an input for power generation. The Tribunal initially decided in favor of the assessee, leading to a refund claim. The appellant sought a refund, which was rejected due to unjust enrichment concerns. However, upon remand by the Tribunal, the matter was directed back to the original authority for reconsideration based on evidence provided by the appellant.

2. The original authority credited ?6,81,91,432 attributable to electricity used for manufacturing to the Consumer Welfare Fund and appropriated ?14,45,705 to the Consolidated Fund of India. The appellant contested the retention of this amount, arguing that the demand set aside by the Tribunal should result in a refund of the entire amount. The appellant's contention was that the appropriated amount was no longer a valid demand.

3. The appellant's counsel highlighted that a specified portion of the refund claim had been sanctioned and paid based on the Tribunal's order. The lower authorities were bound to follow the Tribunal's directive, which restricted the scope of remand. The appellant's failure to appeal or rectify any mistakes limited the authorities' options in this regard.

4. The Commissioner of Central Excise (Appeals) upheld the retention of ?14,45,705 by the original authority, representing duty on inputs not eligible for refund. The Tribunal's remand was specific to the unjust enrichment issue, and the lower authorities were bound by its directives. The appellant's appeal was dismissed on these grounds, as the lower authorities could not go beyond the Tribunal's order.

In conclusion, the judgment dismissed the appeal due to the limited scope of the remand order and the authorities' adherence to the Tribunal's directives. The issues of refund claim, appropriation of funds, and the applicability of unjust enrichment were thoroughly analyzed and resolved based on the Tribunal's remand order.