1989 (2) TMI 226 - AT - Central Excise

Issues Involved:
1. Eligibility for exemption under Notification No. 80/80-CE.
2. Voluntary payment of excise duty and subsequent claim for refund.
3. Undue enrichment and its implications.
4. Requirement of filing a declaration under Notification No. 80/80-CE.
5. Legal precedents and their applicability.

Issue-Wise Analysis:

1. Eligibility for Exemption Under Notification No. 80/80-CE:
The appellants claimed a refund of central excise duty for the period April 1982 to September 1982, asserting that no duty was payable under Notification No. 80/80-CE. The Assistant Collector rejected the claim, stating that the value of their clearances in the preceding financial year exceeded Rs. 15 lacs. However, the Collector (Appeals) accepted the contention that their clearance value was Rs. 13.39 lacs, thus admitting their entitlement to the exemption. The Tribunal agreed with the Collector (Appeals), noting that the value for exemption determination should be exclusive of excise duty, as per Section 4(4)(d)(ii) of the Central Excises and Salt Act, 1944.

2. Voluntary Payment of Excise Duty and Subsequent Claim for Refund:
The appellants paid the excise duty despite being entitled to the exemption, intending to realize it from their customers. The Collector (Appeals) and the Tribunal noted that the appellants voluntarily opted out of the exemption to increase their sale prices. The Tribunal held that since the payment was voluntary and intentional, the appellants were not at liberty to claim the exemption later.

3. Undue Enrichment and Its Implications:
The Collector (Appeals) rejected the refund claim on the ground of undue enrichment, arguing that the appellants would benefit twice by receiving the duty from customers and claiming a refund from the government. The Tribunal cited precedents, stating that the Central Excise Law does not authorize denial of relief based on unjust enrichment. It emphasized that the Tribunal, unlike High Courts and the Supreme Court, cannot deny relief on this ground if it is due on the merits of the dispute.

4. Requirement of Filing a Declaration Under Notification No. 80/80-CE:
The Revenue argued that the appellants did not file the required declaration under paragraph 3 of the notification. The Tribunal, however, found that the declaration was not necessary for the appellants, as they had an L-4 license and had cleared goods in the preceding financial year. Thus, the contention regarding the declaration was rejected.

5. Legal Precedents and Their Applicability:
The Tribunal referenced several decisions, including the cases of Collector of Central Excise, Rajkot v. Decora Ceramics Private Limited and Collector of Central Excise, Guntur v. M/s. Andhra Asphalt (P) Ltd., to support its stance that relief cannot be denied on the ground of unjust enrichment. It also discussed the Supreme Court's rulings in State of Madhya Pradesh v. Vyankatlal and Newabganj Sugar Mills v. U.O.I., which dealt with the concept of unjust enrichment but noted that these principles were not applicable within the statutory framework of the Central Excise Law.

Conclusion:
The Tribunal concluded that the appellants were entitled to the benefit of Notification No. 80/80-CE for the period in question, setting aside the impugned order and allowing the appeal. The cross-objection filed by the Revenue was dismissed. The Tribunal emphasized the need for legislative intervention to address issues of unjust enrichment, as it lacked the authority to deny refunds on this ground within the existing legal framework.

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