1997 (1) TMI 107 - SC - Central Excise

Tribunal rules against department in valuation issue appeal, directs refund process, sets interest rate

The Tribunal dismissed the department's appeals on the valuation issue regarding goods manufactured by the appellants. The High Court directed the ... Refund - Bar of unjust enrichment Issues:1. Dispute over valuation of goods manufactured by the appellants.2. Rejection of application for refund of duty by Assistant Collector.3. High Court directing re-deposit of withdrawn amount along with interest.4. Question of refund pending during pendency of writ petitions.5. Justification of awarding interest at 12% per annum.6. Appellants' right to file an appeal against Assistant Collector's order.7. Bank guarantees to be kept alive for a specific period.Analysis:1. The appeals were filed against the High Court of Bombay's orders concerning a dispute over the valuation of goods manufactured by the appellants. The Collector of Appeals had previously upheld the appellants' claim, but the department appealed to the Tribunal. The Tribunal later dismissed the department's appeals on the valuation issue.2. The Assistant Collector rejected the appellants' application for a refund of duty following the Collector of Appeals' orders. Subsequently, the appellants filed writ petitions in the High Court, which directed them to re-deposit the withdrawn amount along with 12% interest within two weeks.3. The High Court justified awarding interest at 12% per annum, which was contested by the appellants. The court directed the appellants to re-deposit the amount and invest it in a Nationalized Bank for consideration of refund by the Assistant Collector under amended provisions of the Central Excise Act.4. The appellants argued that their right to a refund became final after the Tribunal's decision in their favor in 1990, and the department did not question it further. However, the court disagreed, stating that the refund claim was still pending due to the writ petitions filed by the appellants.5. The court allowed the appellants to file an appeal before the Commissioner of Central Excise (Appeals) against the Assistant Collector's order. The order awarding interest at 12% was set aside, and the question of interest was to be decided by the Commissioner (Appeals) according to law.6. The bank guarantees provided by the appellants were to be kept alive for two months, after which the withdrawn amount would need to be repaid to the department. Failure to renew the bank guarantees could result in their encashment by the Revenue.