1996 (8) TMI 120 - HC - Central Excise

Summary

Issues:
Classification of products under Tariff Item 15AA, exemption from excise duty under Notification No. 101/66-C.E., compliance with CEGAT order, refund of excise duty, applicability of Section 11B of Central Excises and Salt Act, entitlement to interest on refund.

Analysis:
The petitioners, engaged in manufacturing products based on Silicon Oil, claimed classification under Tariff Item 15AA and exemption from excise duty under Notification No. 101/66-C.E. The Assistant Collector accepted their claim partially, but the Department filed a review application leading to a review order in 1988. The petitioners appealed to CEGAT, which partly allowed their appeal, directing compliance with the Notification. Non-compliance by the respondents led to a writ petition in 1993, subsequently withdrawn after an assurance of compliance. Respondent No. 3 later allowed the benefit of the Notification but from a wrong date, causing loss to the petitioners.

The petitioners filed a Writ Petition in 1991 seeking refund based on the incorrect application date. The introduction of Section 11B in September 1991 required proof that the burden was not passed to consumers. The Collector of Central Excise upheld the petitioners' claim regarding effective dates and ordered re-examination of the Notification's applicability to certain products, granting consequential reliefs under Section 11B. The Department appealed this order to CEGAT without obtaining a stay.

The petitioners provided evidence in 1992 that they had not passed on the excise duty burden to consumers. Despite no stay from CEGAT, the Department failed to act on the Collector's order. The present petition focused on implementing the order of 24-6-1991 for refund, not challenged before any authority. The court held that the petitioners are entitled to a refund subject to limitations under Section 11B, with interest, as per the court's previous order. Respondent No. 3 was directed to decide on the refund claim within three months, considering Section 11B and the Collector's order.

In conclusion, the petition was disposed of, with the petitioners entitled to a refund of excise duty with interest from a specified date, and Respondent No. 3 directed to process the refund claim within three months.