2005 (10) TMI 186 - AT - Central Excise

Summary

Issues:
1. Unjust enrichment aspect in ordering refund without verification.
2. Applicability of amended Rule 9B for finalization of provisional assessment.
3. Interpretation of Supreme Court's decision in Hyderabad Industries case regarding refund.

Issue 1 - Unjust Enrichment:
The case involved a departmental appeal against an order granting a refund without verifying the unjust enrichment aspect. The Commissioner (Appeals) finalized the provisional assessment, granting a consequential relief of Rs. 4,35,80,736/-. The Revenue contended that the refund was ordered without verifying if the duty incidence was passed on to buyers, as required by Section 12B of the Central Excise Act. The appellant raised the issue of rate of duty only after a Tribunal decision, and the Commissioner (Appeals) failed to follow the Act and Rules by not verifying the passing on of duty incidence. The Revenue argued that the refund resulted in unjust enrichment to the appellants.

Issue 2 - Applicability of Rule 9B:
The Tribunal examined the case of a manufacturing unit in dispute over the valuation of goods cleared for domestic tariff area. The Tribunal's order directed the Commissioner (Appeals) to rehear the matter and finalize the assessment. The Revenue argued that the amended Rule 9B, effective from 14-5-99, did not apply to the period of dispute from 18-3-90 to 30-11-95. The Tribunal found the case laws cited by the Revenue relevant, indicating that Section 11B of the CE Act was not applicable during the provisional assessment period. The Tribunal concluded that the appeal lacked merit and rejected it.

Issue 3 - Interpretation of Supreme Court's Decision:
The Tribunal referred to the Supreme Court's decision in Hyderabad Industries case, where the Court held that the respondents were not liable to refund additional duty paid. The Tribunal noted that this specific ruling applied to that case and could not be universally applied. The Tribunal emphasized that the legal position and decided case laws during the provisional assessment period were crucial. The Tribunal found the Revenue's appeal devoid of merit based on these considerations and rejected it.