2018 (7) TMI 2 - AT - Central Excise

Refund Claim - Applicability of N/N. 6/2002 CE - preceding N/N. 3/2001 CE dated 01 March, 2001, which is pari materia to the subsequent N/N. 6/2002 C.E. - Held that - The decision in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S. MEWAR BARTAN NIRMAN UDYOG 2008 (9) TMI 33 - SUPREME COURT is squarely applicable to the facts of present case, where it was held that S.No. 200 would apply and the assessee would be entitled to claim nil rate of duty under the said Notification. Whether in the second round of litigation, the learned Commissioner (Appeals) by his order dated 27 January, 2011, whether have rightly rejected the refund claim holding that appellant was availing the benefit of N/N. 67/1995 CE dated 16th March, 1995? - Held that - The said ground is not available to Revenue as Revenue has no new case can be made out in the second round of litigation as has been held by a Division Bench of this Tribunal in Rajasthan Spinning & Weaving Mills vs. CCE 1998 (3) TMI 434 - CEGAT, NEW DELHI . Whether the refund if hit by unjust enrichment? - Held that - It is an admitted fact that the appellant had informed the Revenue vide letter dated 01 August, 2004 to allow clearances without payment of duty as they are claiming exemption under S.No. 181 of N/N. 6/2002 CE as Revenue insisted on payment of duty for clearance - matter remanded to the file of the Adjudicating Authority to grant the refund subject to verification of unjust enrichment.

Summary

Issues Involved:
1. Refund claim rejection for the period 01 August, 2004 to 31 March, 2008.
2. Applicability of Notification No. 6/2002 - CE.
3. Rejection of refund claim based on availing benefits under Notification No. 67/1995 - CE.
4. Unjust enrichment ground for refund rejection.

Analysis:

Issue 1: Refund Claim Rejection
The appellant, a manufacturer of brass sheets/circles, filed refund claims for duty paid under protest. The claim was rejected initially by an Order-in-Original (O-I-O) due to lack of proof regarding the passing on of duty to consumers. Appeals were filed challenging this rejection, leading to remand and subsequent rejection based on availing benefits under Notification No. 67/1995 - CE and unjust enrichment. The appellant contended that they did not pass on the duty and provided evidence to support this claim. The Tribunal held in favor of the appellant, allowing the refund of duty deposited under protest.

Issue 2: Applicability of Notification No. 6/2002 - CE
The Tribunal referred to a Supreme Court ruling regarding the applicability of Notification No. 6/2002 - CE, which favored the appellant's position. The Court clarified that the appellant, manufacturing circles from brass, was entitled to nil rate of duty under the said Notification. This issue was deemed settled in favor of the appellant by the Supreme Court's decision.

Issue 3: Rejection Based on Notification No. 67/1995 - CE
The rejection of the refund claim by the Commissioner (Appeals) in 2011 was based on the appellant availing benefits under Notification No. 67/1995 - CE. The appellant argued that this ground was not raised earlier and could not be introduced in the second round of litigation. The Tribunal agreed with the appellant, citing a precedent that no new case could be made out in subsequent proceedings.

Issue 4: Unjust Enrichment
The rejection of the refund claim on the grounds of unjust enrichment was challenged by the appellant, providing evidence that they did not pass on the duty to consumers. The Tribunal remanded this issue to the Adjudicating Authority for verification, emphasizing that the appellant should be granted the refund subject to confirmation of no unjust enrichment.

In conclusion, the Tribunal allowed the appeal, directing that the appellant be entitled to consequential benefits as per the law. The decision was based on the merits favoring the appellant, particularly regarding the applicability of Notification No. 6/2002 - CE and the lack of unjust enrichment in the refund claim.