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TMI Blog1985 (12) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... second order, the Assistant Collector confirmed a demand for duty amounting to Rs.4,98,635.73 from the respondents. 2. The facts of the case, briefly stated, are that the respondents are engaged in the manufacture of China and Porcelainware (Glazed Tiles), falling under Item 23-B(3) of the First Schedule to the Central Excises and Salt Act, 1944, (CET, for short). The unit commenced manufacture on 10-12-1983 and clearances of the goods on 20-12-1983 for the first time. The respondents had initially filed a classification list for the goods at the full rate of duty i.e. 40% basic excise duty +5% of the basic excise duty as special excise duty. On 24-12-1983, they filed a declaration to the effect that they were entitled for duty exemption in terms of Central Excise Notification No. 83/83, dated 1-3-1983. They also commenced paying duty under protest and cleared goods worth Rs. 24,92,908.20 (ex-duty) during the year 1983-84. In due course, the respondents filed a claim for refund of the duty paid by them during the said period amounting to Rs. 4,95,509.74 p. In reply to the show cause notice issued by the Assistant Collector, the respondents explained that they had started clearan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he question of availing of exemption during 1984-85 did not arise, according to the Assistant Collector. Aside from this consideration, said the Assistant Collector, the respondents had exceeded the exemption limit of Rs. 25 lakhs in April 1984 itself and in view of para 4 of the Notification No. 83/83, the benefit of exemption would not be available to them during 1984-85. On this basis, the Assistant Collector confirmed the demand for duty amounting to Rs. 4,98,635.73 from the respondents. 4. On appeal, the Collector (Appeals) held that the respondents (the appellants before him) had produced evidence to show that an amount of Rs. 1,74,978.08 (the duty element) had been transferred by them to their dealers, that there was, therefore, no justification to add the said amount to the value of clearances on the ground that the benefit was retained by the respondents, that excluding the said amount incorrectly added by the Assistant Collector, the total clearances during 1983-84 remained under Rs. 23 lakhs and that they would be entitled to refund of the duty paid on them. Since the demand for duty for 1984-85 had been confirmed by the Assistant Collector on the premise that the clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duty paid was all part of, what he chose to call an accounting mechanism designed to pre-empt or counter legal action. No part of the refund claimed was due to the respondents as that would amount to unjust enrichment. For this, he relied on para 27 of the Gujarat High Court decision in Union of India v. New India Industries Ltd., Baroda [1983 (14) E.L.T. 1763 (Guj.)]. In response to a query from the Bench, Shri Naik stated that he was not aware of any decision on whether this Tribunal could deny relief on this score, if relief was due otherwise. Shri Naik questioned the Collector (Appeals) s action in relying simply on an affidavit filed by the respondents regarding the return of the duty amounts to the dealers without putting it to proof. In fact, this evidence should have been produced before the Assistant Collector. At this stage, the learned Councel for the respondents objected to this submission since this did not form part of the grounds urged in the appeal, and this submission, as could be seen from the affidavit itself had been made before the Assistant Collector, who, however, did not challenge the submission that evidence was produced before the Collector (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the first clearances worth Rs. 25 lakhs. The term financial year in para 4 of the notification had been misconstrued by the Assistant Collector. It referred to the preceding financial year and not the current financial year. In this context, he drew our attention to the Bombay High Court decision in Shankerbhai Trikamdass Patel v. Ranchhodbhai Naraindas-1950 B.L.R. Vol. LIII-172. 10. We have carefully considered the submission before us. At the outset, we would like to say that unlike Courts of law (the High Courts and the Supreme Court) which, in their extraordinary jurisdiction, may decline to grant relief on the ground that it would amount to unjust enrichment of the claimant, this Tribunal, acting within the statute, has no power to deny relief on this ground, if relief is due on the merits of the dispute before it. Central Excise Law does not authorise denial of relief on the score of unjust enrichment nor does it make refund of duty conditional on the relief being passed on to the ultimate consumer. 11. In Union of India v. New India Industries Ltd., Baroda-1983 E.L.T. 1763-The Gujarat High Court held that where recovery of indirect taxes is held unlawful and the man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 83, dated 1-3-1983 provides that Where a manufacturer has not cleared any specified goods in the preceding financial year, or has cleared any such goods for the first time on or after the 1st day of August in the preceding financial year, the exemption contained in this notification shall be applicable to such manufacturer : (1) if he files a declaration with the Assistant Collector of Central Excise that the aggregate value of clearances of all excisable goods by him or on his behalf, for home consumption, from one or more factories, during the financial year is not likely to exceed rupees twenty-five lakhs, and (2) if the aggregate value of clearances of all excisable goods by him or on his behalf, for home consumption, from one or more factories, during the financial year does not exceed rupees twenty-five lakhs." In the instant case the specified goods were manufactured from 10-12-1983 and cleared for the first time on 20-12-1983. In the preceding financial year, there was no manufacture and no clearance. On 24-12-1983, the respondent filed the requisite declaration in terms of para 3 (a). We can find nothing in the express words employed in the notification to suggest t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II) 172. The learned Councel was referring us to that part of the Judgment which said : Apart from that, the use of the definitive article before two years" clearly shows that the two years which are contemplated are the two years indicated and specified in the sub-section itself and these two years which are indicated and specified are the two years immediately preceding the date of coming into operation of this Act". This was with reference to a provision in the Bombay Agricultural Debtor s Relief Act- Who has been cultivating land personally for the cultivating seasons in the two years immediately preceding the date of the coming into operation of this Act or of the establishment of the Board concerned under the repealed Act. In the context of the said section, it is easy to see the rationale of the Court s decision. However, we have to see the setting in which the phrase the financial year occurs in para 4 of the Notification 83/83. As can be seen from the opening passage in the first para of the Notification, it exempts goods cleared for home consumption on or after the 1st day in any financial year . Paras 3 and 4 lay down certain conditions regarding clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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