2004 (2) TMI 152 - AT - Central Excise

Summary

Issues:
1. Refund claims rejected by Commissioner (Appeals) and orders to credit amount to Consumer Welfare Fund.
2. Contention of unjust enrichment and internal book adjustments.
3. Reimbursement methodology and compliance with Section 11B of the Act.
4. Specific scheme formulated by Government and procedures set out by Commissioner.
5. Dispute over reimbursement methodology and date of original clearance of goods.
6. Applicability of third proviso to Section 11B and related notifications.
7. Comparison with case laws cited by Revenue.

Analysis:
The judgment involves two appeals arising from Orders-in-Appeal rejecting refund claims and directing the amount to be credited to the Consumer Welfare Fund. The case pertains to the duty paid on kerosene supplied to another party for manufacturing purposes. The appellants sought refunds for unutilized quantities of kerosene returned to them. The Department alleged passing on the duty burden to the buyer. The appellants argued that any excess amount collected was re-credited to the buyer through internal book adjustments and credit notes, maintaining no additional collection. The main issue revolved around unjust enrichment and compliance with Section 11B of the Act.

The appellants contended that the reimbursement to the buyer was part of a statutory procedure formulated by the Commissioner, following specific notifications. The Department argued that reimbursement through credit notes did not absolve the duty burden passed on during the original clearance. The Tribunal noted that the reimbursement was made post-clearance, as per the conditions set by the Commissioner. The case involved a unique scheme established by the Government and specific procedures outlined for refund claims, distinguishing it from the cases cited by the Revenue.

The Tribunal analyzed the provisions of Section 11B and the applicability of the third proviso, emphasizing that the refund amount should be paid to the applicant if related to excise duty paid on excisable goods used as inputs. Given the specific notifications and procedures in place for the appellants, the Tribunal found the orders to credit the amount to the Consumer Welfare Fund unjustified. Citing lack of similarity with the cases referenced by the Revenue, the Tribunal set aside the orders and allowed the appeals, granting consequential relief as necessary.