2023 (12) TMI 433 - AT - Central Excise

Refund claim - Substantial expansion of installed capacity and availed benefit of N/N. 50/2003-CE dated 10.06.2003 - denial of refund claim on the ground that the appellants have violated conditions of Notification No.49-50/2003-CE dated 10.06.2003 and SSI Exemption No.08/2003 dated 01.03.2003 and also for the reason of unjust enrichment. The appellants argue that the new unit started by them has no connection with the existing manufacture and has to be treated as a new unit for the purpose of the notification. HELD THAT - This issue has been considered by the Bench at New Delhi in the case of Tirupati LPG Industries Ltd. 2015 (10) TMI 622 - CESTAT NEW DELHI ; whereas the appellant in the impugned case was manufacturing V.P. Rings and has established a unit to manufacture/ fabricate machinery, in the case of Tirupati LPG Industries Ltd. 2015 (10) TMI 622 - CESTAT NEW DELHI , they were manufacturing LPG Cylinders and have started a unit for manufacture of ACSR Conductors and claimed the exemption under Notification No.50/2003; the facts of both the cases are identical. The machinery manufactured by the appellants by establishing a separate unit which started production after 07.01.2003, is eligible for benefit of Notification No.50/2003 - the contention of the learned Counsel for the appellant that there is no condition, whatsoever, in the said notification, so as to restrict benefit to only those units which are permitted by the District Industries Centre or any other authority, is agreed. Principles of unjust enrichment - HELD THAT - The appellants have submitted a certificate issued by a professional Charted Accountant, which has not been negated with evidence and therefore, it is found that there is no reason as to why the certificate should be disbelieved. Moreover, the bona fides of the appellant are established by the fact that an amount of Rs.93,120/- was not claimed by them for the reason that the same has been recovered from the customers; the same has been confirmed by the report of the Revenue Officer also - the claim of the appellant that in respect of an amount of Rs.32,206/-, cum-duty value must be considered, not agreed; it is found that the moot point is not about the cum-duty value but is about the fact whether the appellants have recovered the amount representing as duty from the customers. Therefore, the appellants are not eligible for this portion of the refund. The appeal is partly allowed.

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 50/2003-CE.
2. Requirement of certification by Competent Authority.
3. Unjust enrichment.

Summary:

1. Eligibility for Exemption under Notification No. 50/2003-CE:
The appellants, M/s Savita Industries, claimed exemption under Notification No. 50/2003-CE for machinery fabricated in a new unit they established after 07.01.2003. The Department contended that this unit did not qualify as a new industrial unit under the notification. The Tribunal referenced the case of Tirupati LPG Industries Ltd., where it was established that a new industrial unit includes those set up before 07.01.2003 but commenced commercial production after this date. The Tribunal concluded that the appellant's unit, which started production after 07.01.2003, is eligible for the exemption.

2. Requirement of Certification by Competent Authority:
The Revenue argued that the exemption required certification by the Director of Industries or District Industry Centre, as per the policy of the Government of Himachal Pradesh. The Tribunal disagreed, stating that the notification itself did not stipulate such a requirement. Therefore, the Tribunal ruled that the absence of such a certificate does not disqualify the appellant from claiming the exemption.

3. Unjust Enrichment:
The Tribunal examined the issue of unjust enrichment and found that the appellants provided a Chartered Accountant's certificate confirming no unjust enrichment, which was not contradicted by the Revenue. Additionally, the appellants did not claim Rs. 93,120/- recovered from customers, corroborated by a Revenue Officer's report. However, the Tribunal denied the claim for Rs. 32,206/- on a cum-duty basis, emphasizing that the focus should be on whether the amount was recovered as duty from customers.

Conclusion:
The appeal was partly allowed. The Tribunal concluded that the appellant's separate unit qualifies for the exemption under Notification No. 50/2003-CE, and there was no requirement for certification by the Competent Authority. The claim of Rs. 93,120/- was accepted, but the claim of Rs. 32,206/- on a cum-duty basis was denied.