2000 (2) TMI 592 - AT - Central Excise

Reference to High Court - Refund - Bar of unjust enrichment - Rectification of Mistake - Appellate order - Direction for compliance

Summary

Issues Involved:
1. Rectification of Mistake (ROM) Application by the Department
2. Applicability of amended Section 11B of the Central Excise Act, 1944
3. Pending status of refund claims
4. Correctness of Tribunal's reliance on Supreme Court's judgment in Mafatlal Industries case
5. Implementation of Tribunal's earlier order
6. Stay Petition by the Revenue
7. Assessee's application under Rules 40 and 41 of the CEGAT Procedural Rules

Detailed Analysis:

1. Rectification of Mistake (ROM) Application by the Department:
The Department filed a Rectification of Mistake Application against the Tribunal's Final Order dated 27-1-1998, arguing that mistakes had crept into the order. The Department contended that the Tribunal's direction for refund based on its earlier order dated 6-6-1989 was incorrect, as the proceedings should be considered pending under the amended Section 11B. The Department relied on the Supreme Court's decision in the case of UOI v. M/s. Jain Spinners Ltd., which held that pending claims should be dealt with as per the amended provisions of Section 11B. The Tribunal, however, found no specific mistake apparent on the face of the record and dismissed the ROM Application, agreeing with the Respondent's Counsel that no rectification was required.

2. Applicability of amended Section 11B of the Central Excise Act, 1944:
The Department argued that the amended Section 11B, effective from 20-9-1991, should apply to the assessee's refund claim, as the refund was not completed by the amendment date. The Tribunal had allowed the refund based on the legal position before the amendment, which the Department claimed was incorrect. The Tribunal, relying on Para 146 of the Supreme Court's judgment in Mafatlal Industries case, rejected this argument, stating that the administrative delay in implementing the order did not constitute a pending proceeding under Section 11B.

3. Pending status of refund claims:
The Department contended that the refund claim was still pending as of the amendment date, and thus, the amended Section 11B should apply. The Tribunal, however, held that the proceedings had terminated with its earlier order dated 6-6-1989, and the delay in administrative implementation did not convert it into a pending proceeding. The Tribunal emphasized that pending proceedings relate to judicial or quasi-judicial authorities, not administrative delays.

4. Correctness of Tribunal's reliance on Supreme Court's judgment in Mafatlal Industries case:
The Department argued that the Tribunal incorrectly relied on Para 146 of the Mafatlal Industries judgment, which was not part of the majority judgment. The Tribunal clarified that Para 146 was a concurring judgment and consistent with the majority view expressed in Paras 87 and 99 of the Mafatlal Industries case. The Tribunal found no inconsistency and upheld its reliance on Para 146.

5. Implementation of Tribunal's earlier order:
The Department had not completed the refund process by the amendment date, leading to the contention that the refund claim was pending. The Tribunal, however, held that the earlier order had become final, requiring only administrative action for implementation. The Tribunal directed the Jurisdictional Commissioner to implement the refund order forthwith.

6. Stay Petition by the Revenue:
The Revenue filed a Stay Petition against the Tribunal's Final Order dated 27-1-1998. The Tribunal noted that part of the refund had already been sanctioned and encashed by the assessee. The Tribunal found no justification for not refunding the remaining amount and dismissed the Stay Petition.

7. Assessee's application under Rules 40 and 41 of the CEGAT Procedural Rules:
The assessee filed an application for contempt proceedings against the Departmental Officer for not complying with the Tribunal's order. The Tribunal allowed the application and directed the Jurisdictional Commissioner to implement the refund order immediately.

Conclusion:
The Tribunal dismissed the ROM, Reference Application, and Stay Petition filed by the Revenue. It upheld its earlier order for refund, clarifying that administrative delays do not constitute pending proceedings under Section 11B. The Tribunal also directed the immediate implementation of the refund order in favor of the assessee.