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TMI Blog1998 (8) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants. 2. Appellants M/s. Super Cassettes Industries Ltd. and others are engaged in the manufacture of audio-cassettes falling under sub-heading 8523.12 of the Central Excise Tariff Act, 1985. Audio-Cassettes falling under sub-heading 8523.12 were exempted from payment of duty vide Notification No. 117/90, dated 16-5-1990. The appellants had purchased from manufacturers plastic components like hub stoppers and rollers. There was dispute between manufacturers of hub stoppers and rollers and the Department on the question whether these plastic components for audio systems will or will not be liable to duty under 85.23. Pending resolution of the said dispute the manufacturers of hub stoppers and rollers paid duty applicable to sub-heading 8523.12 under protest. Subsequently, in 1992 the manufacturers were informed that hub stoppers and rollers were not classifiable under Heading No 85.23. In between, the manufacturers had sold the stoppers and rollers to various purchasers, i.e., the present appellants. As the said manufacturers could not claim refund (since they had collected duty from present appellants,) the appellants filed refund claims of the duty paid on the plastic com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said goods from the manufacturers had, therefore, rightly applied for refund of the duty under Rule 173S read with Section 11B for the reason that the incidence of duty borne by the appellants had not been passed on to the customers. Also, the entire quantity of duty-paid on hub-stoppers and rollers had been consumed by the appellants in their factories for the manufacture of audio-cassettes. Since the amount collected from the manufacturers cannot thus be said to be a duty of excise, at best it can only be said to be a deposit with the Government. Ld Counsel argued that no amount collected without authority of law can be adjusted against duty payable under a different tariff heading without first establishing liability for payment of such duty and without undertaking a proper adjudication after issuing a demand or SCN under Section 11A of the Act on the manufacturers. Further, recovery, if any, has to be made from the manufacturer. There was no provision in law for recovery or for adjusting the amount of duty, if any, recoverable from the manufacturers from the refund claim of the customers. Ld. Counsel relied on the following judgment of the Apex Court, Delhi High Court and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early apply to these cases. He also submitted that refund claims are subject to the provisions relating to limitation and relied on the Tribunal decision in Miles India v. CCE, 1987 (30) E.L.T. 341. 6. In rejoinder, the ld. Counsel submitted that the limitation point could not be taken up at this stage since it had been proposed neither in the SCN nor argued before the Assistant Commissioner. As regards the aspect relating to unjust enrichment, Assistant Commissioner had himself held that the said question will not apply in the case of the appellants. He also relied on two decisions of the Tribunal in support, namely, Electronic Research Ltd. v C.C.E., 1998 (101) E.L.T. 97 (Tribunal) = 1998 (26) RLT 305 and East India Plastic v. C.C.E. - 1995 (74) E.L.T. 29. Ld. Counsel submitted that the decision of the Tribunal in Electronic Research case, supra, was clearly applicable in the facts of the present appeals. Further, he also submitted that there was no question of limitation being made applicable when the duty was paid under protest. He also draw attention to the fact that the approval of the classification list filed by the manufacturers took over two years because of the classif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether such adjustments can be made without issue of a proper demand to the manufacturer under Section 11A for the recovery of duty not levied or short levied. In this connection, appellants had relied on the Delhi High Court judgment in Bharat Commerce and Industries v. Union of India [1979 (4) E.L.T. (J 527) (Del.)]. In that case it was held that if levy and assessment of goods under one particular Tariff item is held to be illegal, the Department cannot refuse to refund the amount on the ground that duty could have been levied under some other Tariff item. The Hon ble High Court held that it was not permissible to do so without a proper demand in terms of Rule 10. We find that the said ratio has been followed in Indian Plywood Mfg. Co. Ltd. v. CCE [1985 (22) E.L.T. 144 (T)]. Further, the Tribunal had, in Indian Oil Corporation v. CCE [1991 (54) E.L.T. 110] held that duty paid under a particular heading is not to be adjusted towards duty payable under a different tariff heading and also that procedures required under law have to be initiated before making any such adjustment. 10. The further issues relate to whether a duty even if recoverable, can be recovered from the refund cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tic (India) Ltd. v. CCE, [1994 (74) E.L.T. 29 (Cal.)] wherein it was held that there will be no bar of unjust enrichment where the goods are used in the manufacture of other products and where there is nothing on record to show that the assessee had passed on the incidence of duty to other persons. Reliance in this connection had also been made on the Bombay High Court judgment in Solar Pesticides Limited v. Union of India - 1992 (57) E.L.T. 201. The Hon ble High Court, Calcutta had also following the Apex Court decision in Salonah Tea Co. Ltd. v. Supdt. of Taxes [1988 (33) E.L.T. 249] and Shri Ballabh Glass Works Ltd. v. Union of India [1984 (16) E.L.T. 171] held that in cases where refund is claimed on a tax collected without authority of law, the State is liable to refund the said amount and the statutory provision relating to limitation under any special law providing for refund is not applicable. 11. As regards the claim for interest for delayed refunds under Section 11BB, we find that the said provision applies to duty ordered to be refunded under Section 11B(2). In the instant case there is no order passed by the Assistant Commissioner under Section 11B(2). The question of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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