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TMI Blog2009 (7) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Commissioner (Appeals) No. 78/2007(Ahd-III)CE/KRB/Commr. (A), dt. 7-8-07. This order was passed by the Commissioner (Appeals), on appeal against order of the Original Authority No. 11/Ref/2007, dt. 10-5-07, which itself was passed in de novo proceedings in pursuance of Tribunal's order No. A/210/WZB/AHD/2006, dt. 7-11-06. 2. Heard both sides. 3. The relevant facts, in brief, are as follows: (a) Plastic granules are used in the manufacture of plastic tapes/tubes which in turn are converted into bags/sacks. There was a dispute as to whether the tapes so manufactured by the appellant would be classified under Chapter 39 as claimed by the appellant or as per Chapter 54 as held by the Department. This dispute stands settled in favour of the assessee. (b) In pursuance of Tribunal's order, the original authority, by his order dated 10-5-07 allowed the appellant to take credit of Rs. 22,46,020/- in their Cenvat credit account. The Commissioner (Appeals) by his order dated 7-8-07 has modified the order of the original authority by allowing the same as cash refund. However, he has not accepted the prayer for payment of interest. 4. The ld. advocate submits that during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t's grievance to denial of a part of the credit obtained by them on the basis of the original document; to examine the claim of the appellant to concessional rate of duty in terms of Notification No. 53/88-C.E., which prescribed a lower rate of duty in case the Modvat credit is not availed. (d) The appellant submitted that the duty payable under Chapter 39 comes to Rs. 40,90,529/- and that they are eligible for credit of Rs. 46,86,244/-. Taking into account the total duty of Rs. 21,04,914/- paid under Chapter 54, and taking into account that the claim for a part of the period was not covered by protest, the original authority held that a sum of Rs. 22,46,020/- is eligible as credit in their Cenvat account being surplus credit but rejected the claim for interest. He has allowed the credit based on the Xerox copies of the documents on the basis of verification report by the Range Supdtt. (e) The Commissioner (Appeals), after appreciating the developments of the closure of the unit, modified the order of the Original Authority by making it as refund in cash. 5.3 If the products in question, instead of being classified under Chapter 54, were classified under Chapter 39 then, duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Commissioner (Appeals) in not granting interest on the cash refund of accumulated credit due to closure of the factory does not deserve to be interfered with. 7. Appeal is, therefore, rejected. Sd/- M. Veeraiyan Member (Technical) 8. [Order per : Archana Wadhwa, Member (J)]. - After having gone through the orders proposed by learned Member (Technical), I record a separate order. 9. The facts already stand detailed in the order of the learned Member (Technical). The entirety of the facts clearly shows that during the relevant period, the appellants have discharged the duty burden on tape by paying duty as cash, though they were entitled to take Modvat credit and pay the duty out of such credit. It was on the insistence of the Revenue and on account of classification dispute that the appellants were made to pay the duty in respect of tape on cash basis. Had they taken the Modvat credit during the relevant period, they were in a position to utilize such credit for payment of duty, in which case, cash payment made by them would not have been made. 10. As such, I feel that essentially it is a case of refund of cash payment made dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Patel, learned consultant, on behalf of the appellants submits that during the relevant period appellants had to pay duty in cash because the claim for classification of HDPE under Chapter 39 was rejected by the Revenue and they had to pay duty under Chapter 54 under produced and for payment of duty under Chapter 54, during the relevant period benefit of Modvat credit of duty paid on the raw material was not available. This resulted in a situation whereby the appellants had to pay Rs. 21,04,914/- on the clearances of their goods during the period from 1-4-1989 to 31-3-1992 in cash. After the settlement of the dispute in their favour they filed a refund claim. When the refund claim was filed the duty payable on the goods under Chapter 39 came to Rs. 40,90,529/- but the Modvat credit eligibility came to Rs. 46,86,244/-. After several rounds of litigation, it has been finally concluded in appellants' favour that they are eligible for the Cenvat credit. The net result is that, the appellant need not have paid any duty in cash if the goods were to be classified correctly as claimed by them under Chapter 39. He also submits that the Tribunal in C.C.E., Ahmedabad v. Olympic Synthetics re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. 591 (Tri.-Del.). (ix) Birla Corpn. Ltd. v. C.C.E., Raipur - 2002 (144) E.L.T. 674 (Tri.-Del.). (x) Union of India v. Shreeji Colour Chem Industries - 2008 (230) E.L.T. 199 (S.C.). (xi) Order of the Tribunal in Order No. A/34/WZB/AHD/2009 [2009 (245) E.L.T. 322 (T)] in the case of Jai Elastics P. Ltd. dated 31-12-08. 16. He also submits that the appellants only chose to pay duty under Chapter 54 and they were not compelled to do so. He also submits that appellants were not at all eligible for the Modvat credit in view of the fact that original documents were not available. Another submission he makes is that the refund related to period prior to 1995 i.e. before the introduction of Section 11BB of Central Excise Act, 1944 and therefore appellants are not eligible for interest. 17. In this case I find that in the Order-in-Original passed by the Assistant Commissioner on 14-7-99, Modvat credit claimed for Rs. 24,71,099/- was rejected on the ground that the same is not admissible. Taking the eligible Modvat credit as Rs. 22,16,144/-, the Assistant Commissioner calculated the eligible refund amount as Rs. 1,86,401/-. The calculation made by her is as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmission of documents by the appellants. In view of this position, the calculation made by the Assistant Commissioner in her order dated 14-7-99 has to read like this:- (i) Modvat credit available and allowed on 14-7-99 Rs. 22,16,144/- (ii) Modvat credit allowed on remand order by the Tribunal Rs. 22,46,020/- (iii) Total available as Rs. 44,62,164/- (iv) Duty payable under Chapter 39 on reclassification Rs. 40,06,472/-. Thus the above calculation clearly shows that the total Modvat credit admissible to the appellants was more than the duty payable on reclassification. Therefore in the normal course they would not have paid any duty by using PLA. Therefore the total amount paid by them in cash becomes admissible as refund. Since the issue of unjust enrichment and limitation are not under challenge and there is no dispute about eligibility of the appellants for the refund and the refund to be allowed is only cash refund, it has to be held that appellants are eligible for interest on the refund claimed by them. Further, as pointed out by the learned consultant, interest is admissible if the refund claim was pending as on the date of introduction of Section 11BB and not fina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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