1997 (11) TMI 157 - AT - Central Excise

Summary

Issues:
1. Challenge to rejection of appeal and confirmation of order by Collector (Appeals).
2. Dispute regarding deduction on freight and expenses from assessable value.
3. Refund of excess duty and subsequent show cause notice for failure to pass on benefits to customers.
4. Interpretation of Section 11A and 11B of the Central Excise Act, 1944.
5. Authority of the Supreme Court's directions in refund matters.

Analysis:
1. The appeal challenges the rejection of an appeal by the Collector (Appeals) and confirmation of the order by the Assistant Collector. The dispute arose from the appellant's claim for deductions on freight and expenses from the assessable value of products manufactured between 1976 to 1983.

2. The Supreme Court directed refunds to the appellant in 1985 based on directions given in previous judgments. The appellant received refunds totaling Rs. 74,45,236.72 by November 1985. However, a show cause notice was issued in January 1986, alleging that the benefit of the refund was not passed on to customers, leading to a proposed redetermination of assessable value and excise duty payable.

3. The appellant contended that the refunds were made as per Supreme Court directions, and therefore, redetermination of assessable value should not occur. The appellant argued that the restrictions in Section 11B of the Central Excise Act, 1944, introduced in 1991, should not apply retroactively to refunds made in 1985.

4. The Tribunal noted that the Supreme Court had accepted the quantification of the refund amount and directed the refund accordingly. The Tribunal emphasized that it could not question the quantification accepted by the Supreme Court. The Tribunal also highlighted that the statutory authority could not demand a part of the refunded amount beyond the Supreme Court's direction.

5. The Tribunal ruled that Section 11B did not apply in this case as there was no pending refund claim before any statutory authority at the time of the provision's incorporation. Therefore, the Tribunal set aside the impugned order and allowed the appeal, holding that the redetermination of assessable value and demand for excess refund were not valid based on the Supreme Court's directions and the absence of pending claims under Section 11B.