2002 (3) TMI 404 - AT - Central Excise

Summary

Issues:
Classification dispute of chocolate-covered biscuits, refund claim rejection, unjust enrichment, duty paid under protest on remoulded chocolates.

Classification Dispute of Chocolate-Covered Biscuits:
The appellant challenged the rejection of a refund claim related to the classification of chocolate-covered biscuits. The jurisdictional Asstt. Commissioner approved the classification of chocolate confectionery under CSH 1803.00 and chocolate-covered biscuits under CSH 1803.00 instead of 1905.90 claimed by the party. The Commissioner (Appeals) classified the chocolate-covered biscuits under CSH 1905.11, not suggested in the show cause notice. The appellant filed a refund claim on various grounds, including the change in the rate of duty for chocolate-covered biscuits.

Refund Claim Rejection:
The refund claim was for excess duty paid on chocolate-covered biscuits and chocolate confectionery, along with duty paid under protest on remoulded chocolates. The lower authorities rejected the claim on grounds of unjust enrichment and finality of the Commissioner (Appeals) order on the classification dispute. The appellant contended that the remoulded chocolates were non-excisable and not includible in the duty calculation. The appellant argued that the excess duty paid should be refunded, and the classification dispute on chocolate-covered biscuits was still pending adjudication.

Unjust Enrichment:
The appellant challenged the reliance on the doctrine of unjust enrichment by the lower authorities. The appellant argued that the Tribunal's decision in another case was not applicable, citing a Supreme Court decision. The appellant sought a refund for the duty paid on remoulded chocolates and claimed that inclusion of their value affected the duty calculation for other products.

Duty Paid Under Protest on Remoulded Chocolates:
The appellant contended that the duty paid on remoulded chocolates, considered non-excisable, should be refunded. The Tribunal had previously held that the conversion of chocolates into different forms did not constitute manufacturing. The appellant argued that the duty paid on remoulded chocolates affected the duty calculation for other products and should be refunded.

In the final judgment, the Tribunal allowed the refund of duty paid on remoulded chocolates, as they were non-excisable. The Tribunal remanded the matter of excess duty paid on chocolate confectionery for reevaluation after excluding the value of remoulded chocolates from the duty calculation. The refund claim for chocolate-covered biscuits was deemed premature due to the ongoing classification dispute. The Tribunal set aside the lower authorities' decision on the refund claim for chocolate confectionery and remoulded chocolates, granting a reasonable opportunity for the appellant to be heard.