New manufacturing unit gets partial refund under Notification 50/2003-CE despite revenue's unjust enrichment objection

CESTAT Chandigarh allowed appellant's refund claim partially. Appellant established separate manufacturing unit after 07.01.2003 and claimed benefit under Notification No.50/2003-CE. Revenue denied refund citing violation of notification conditions and unjust enrichment. Tribunal held new unit manufacturing different products eligible for notification benefit, following precedent in Tirupati LPG Industries Ltd. On unjust enrichment, accepted chartered accountant certificate showing no recovery from customers for major portion but rejected claim for Rs.32,206/- where duty recovery from customers was established. Appeal partly allowed with refund granted except disputed portion.

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Issues Involved:
1. Eligibility for exemption under Notification No. 50/2003-CE.
2. Requirement of certification by Competent Authority.
3. Unjust enrichment.

Summary:

1. Eligibility for Exemption under Notification No. 50/2003-CE:
The appellants, M/s Savita Industries, claimed exemption under Notification No. 50/2003-CE for machinery fabricated in a new unit they established after 07.01.2003. The Department contended that this unit did not qualify as a new industrial unit under the notification. The Tribunal referenced the case of Tirupati LPG Industries Ltd., where it was established that a new industrial unit includes those set up before 07.01.2003 but commenced commercial production after this date. The Tribunal concluded that the appellant's unit, which started production after 07.01.2003, is eligible for the exemption.

2. Requirement of Certification by Competent Authority:
The Revenue argued that the exemption required certification by the Director of Industries or District Industry Centre, as per the policy of the Government of Himachal Pradesh. The Tribunal disagreed, stating that the notification itself did not stipulate such a requirement. Therefore, the Tribunal ruled that the absence of such a certificate does not disqualify the appellant from claiming the exemption.

3. Unjust Enrichment:
The Tribunal examined the issue of unjust enrichment and found that the appellants provided a Chartered Accountant's certificate confirming no unjust enrichment, which was not contradicted by the Revenue. Additionally, the appellants did not claim Rs. 93,120/- recovered from customers, corroborated by a Revenue Officer's report. However, the Tribunal denied the claim for Rs. 32,206/- on a cum-duty basis, emphasizing that the focus should be on whether the amount was recovered as duty from customers.

Conclusion:
The appeal was partly allowed. The Tribunal concluded that the appellant's separate unit qualifies for the exemption under Notification No. 50/2003-CE, and there was no requirement for certification by the Competent Authority. The claim of Rs. 93,120/- was accepted, but the claim of Rs. 32,206/- on a cum-duty basis was denied.

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