2005 (8) TMI 521 - AT - Central Excise

Tribunal grants refund in plywood manufacturing case under Notifications 225/86 and 338/86, emphasizes unjust enrichment.

The Hon'ble Tribunal favored the appellants in a case involving a refund claim rejection under Notification No. 225/86, amended by Notification No. ... Refund - Unjust enrichment - Precedent - Rule of law Issues:Refund claim rejection based on Notification No. 225/86, unjust enrichment, differing decisions on refund claims, burden of proof on passing duty incidence to buyers, interpretation of set off Notifications.Analysis:The case involved manufacturers of plywood availing proforma credit under Notification No. 201/79 for duty paid veneers used in plywood manufacturing. A refund claim of Rs. 1,08,675.19 was rejected, leading to a series of appeals. The Hon'ble Tribunal, in Order No. 142 to 144/97, favored the appellants, citing entitlement under Notification No. 225/86 amended by Notification No. 338/86, subject to unjust enrichment.Notification No. 225/86 allowed set off for goods of specified chapters, including Chapter 44. A similar refund was granted by Asst. Commissioner of Central Excise, Mangalore, but challenged by Commissioner of Central Excise. The Commissioner (Appeals) upheld the refund, stating both Notifications were set off, not exemptions. The issue of unjust enrichment was raised by the Department, contested by the appellants.A Show Cause Notice questioned the passing of duty incidence to buyers, leading to appeals. The Commissioner (Appeals) dismissed the appeal without detailed reasoning. However, in a similar case, the refund was allowed under Section 11B, sub-section 2, sub-clause (c), supported by Tribunal decisions.The Delhi Tribunal's decision favored refund claims under Notifications, emphasizing unjust enrichment consideration. The appellants' argument on pricing final products based on proforma credit was not fully considered, necessitating a remand for further investigation and review of all issues. The need for adherence to precedents and uniformity in legal interpretation was highlighted.In conclusion, the matter was remanded to the Deputy Commissioner for fresh consideration, emphasizing thorough examination of all aspects and records. The decision aimed at ensuring a comprehensive review of the case based on legal provisions and previous judgments for a just resolution.