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TMI Blog2018 (7) TMI 1714X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise duty on processing of fabrics was in dispute on two counts; (i) whether the processing by job workers amounts to manufacture, and (ii) if so, what is the value on which the duty shall be paid. The matter was agitated before the Hon'ble Gujarat High Court and the Hon'ble Apex Court at different times. During this period, the appellants were paying duty on the basis of assessment done by them. The Hon'ble High Court vide order dated 13.03.1979 directed that the excise duty was required to be paid on the activity of processing done on job work basis. However, it was directed that the value for the purpose of excise duty would be the job charges only. The Hon'ble High Court also directed that the amount paid i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b work charges but excluding the trader's profit. At this moment, the Revenue encashed the bank guarantee to the extent of Rs. 17,72,085.75 and also proposed to invoke the bank guarantee of Rs. 12,92,778/- lying with the Registrar of Hon'ble Gujarat High Court. The matter was agitated by the appellant before the Hon'ble High Court and the Hon'ble High Court vide order dated 03.05.1990 directed the excise authorities to re-assess the value of the processed fabrics and workout the amount refundable to the appellant. This order also directed that 75% of the amount secured by bank guarantee can be encashed by the Revenue. The Hon'ble High Court also directed that re-assessment be completed within three months from that date and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pursuance of the order of Hon'ble Gujarat High Court dated 03.05.1990, the Revenue encashed 75% of the said amount of Bank guarantee. The balance amount of 25% of the Bank guarantee of Rs. 12,92,778/- was kept alive. The original adjudicating authority treated this amount, which was already refunded to the appellant and which was secured by bank guarantee as duty not paid. This was adjusted against the total amount refundable and arrived at a figure of Rs. 9,42,015/- as refund admissible to the appellant. The said refund was sanctioned however, it was appropriated towards the Consumer Welfare Fund, on the ground that refund would amount to unjust-enrichment, in terms of Section 11B of the Central Excise Act, 1944 and the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (285) ELT 329 (Del.) 4. Ld. AR relied upon the impugned order. 5. We have gone through the rival submissions. The appellant had originally field a refund claim of Rs. 40,73,077/-. However, they are not disputing the amount calculated by the original adjudicating authority by adopting best judgment method. The original adjudicating authority quantified the amount of refund admissible as Rs. 12,92,778/-. The Adjudicating Authority held that the refund to the appellant is in pursuance of the direction of Hon'ble Apex Court order dated 04.08.1983, to the extent the said amount was not refunded by the appellant to the department in pursuance of the order of the Hon'ble Gujarat High Court order dated 03.05.1990. The Hon'ble High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty payable by the appellants. Therefore the learned Counsel is correct in his submission that the present situation is covered by the decision of the Hon'ble Supreme Court in the case of Oswal Agro Mills Ltd. v. CCE - 1994 (51) ECR 330 (S.C.), holding that bank guarantee furnished by an assessee in compliance with a Court order is in the form of a security or deposit and cannot be held as payment of duty attracting the provisions of unjust enrichment. This decision of the Hon'ble Supreme Court has been followed by the Tribunal in the case of Grasim Industries Ltd. v. CCE - 2001 (94) ECR 222 and in the case of CCE, Rajkot v. Jupiter Cement Industries Ltd. - 1997 (72) ECR 733." Similarly, in the case of UOI vs. Grasim Industries Limited - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be refunded to the appellant and not to be credited in Consumer Welfare Fund. 7. The next issue relates to grant of interest on the refund amount. The appellant contended that interest at the rate of 12% should be granted to them as per directions of Hon'ble Gujarat High Court order dated 13.03.1979 in their own case. It is seen that in 1983, the entire amount deposited by the appellant was refunded to them after the directions of Hon'ble Supreme Court. Thus, the directions of Hon'ble Gujarat High Court dated 13.03.1979 which were applicable to the amount collected at the material time were given effect by refund on the direction of Hon'ble Apex Court vide order dated 04.08.1983. Subsequently, there is no further direct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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