2009 (12) TMI 359 - AT - Central Excise

Carpet- Notification No. 1/95 dated 4-1-95- The respondents are a 100% EOU. They procured the impugned goods duty free under Notification No. 1/95 dated 4-1-95, against CT-3 certificate issued by the jurisdictional Range Officer. The refund claim has been rejected by the original authority holding that they are not entitled to the said exemption. The lower appellate authority has allowed the refund leading to this appeal by the Department. Held that- such anti static carpeting is required for use of EOU who are manufacturing optical goods, which in turn requires a dust free environment. Benefit of notification allowed.

Summary

Issues:
1. Entitlement to exemption under Notification No. 1/95 for procured goods by a 100% EOU.
2. Interpretation of the impugned notification regarding exemption for Anti Static carpet and consumables.
3. Consideration of unjust enrichment in the refund claim.
4. Decision on the payment of interest for delayed refund.

Entitlement to Exemption under Notification No. 1/95:
The case involved a 100% EOU procuring goods duty-free under Notification No. 1/95 but later asked to pay back the duty. The respondents paid and filed a refund claim based on the exemption under the said notification. The original authority rejected the claim, but the lower appellate authority allowed it. The Tribunal upheld the lower appellate authority's decision, emphasizing that the Anti-static carpeting created by the respondents using certain materials satisfied the notification's requirement, as it was necessary for maintaining a dust-free environment for manufacturing optical goods.

Interpretation of the Impugned Notification:
The impugned notification provided exemption for Anti Static carpet and consumables. The lower appellate authority considered the materials used by the respondents to build an 'insitu' Anti-static carpet as Anti Static materials, thus granting the exemption under Notification No. 1/95. The Tribunal agreed with this interpretation, highlighting that the respondents' method of creating the Anti-static carpet met the notification's criteria for exemption for parts and consumables of Anti-static carpet.

Consideration of Unjust Enrichment:
Regarding the question of unjust enrichment, the lower appellate authority examined the Chartered Accountant's certificate and the Balance Sheet, which indicated that the amount paid by the respondents had been shown as advances. The Tribunal found this assessment sufficient and concluded that there was no need to interfere with the lower appellate authority's decision on this ground.

Payment of Interest for Delayed Refund:
The respondents argued that the refund had already been paid, eliminating the need for interest on delayed refund payment. Consequently, the Tribunal determined that no further orders were necessary concerning the payment of interest. Ultimately, the Department's appeal was rejected based on the findings and conclusions outlined in the judgment delivered by the Tribunal.