TaxTMI 
TaxTMI 
2014 (8) TMI 780
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....pellant paid the duty on such quantity of Naptha @ 15% used in the manufacture of Ammonia/Caprolatum and took CENVAT Credit of the same which according to the Revenue should have been taken @ 10% as per Notification No. 5/94-CE(NT) read with Notification No.14/97-CE(NT), dt.3.5.1997. On being pointed out appellant reduced the credit of duty so paid to 10% and later filed the refund claims of Rs. 4,16,535/- and Rs. 3,06,887/- on the ground that appellant is rightly eligible to 15% credit of duty paid on Naptha. Adjudicating authority after issue of show cause notice rejected the refund claims on merits by holding that credit of duty paid with respect to Naptha was eligible only upto 10% of duty paid as per Notification No.14/97-CE(NT), dt.3.5.1997 issued under Rule 57A of the Central Excise Rules 1944. Adjudicating authority did not touch the point of unjust enrichment but first appellate authority on an appeal filed, not only rejected the refund claims by upholding the order of the adjudicating authority but also held, that unjust enrichment would be attracted in case refunds were admissible on merits, under OIA d.21.01.2008. 3. Shri W. Christian (Advocate) appearing on behalf of ....
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....ew Delhi [2004 (171) ELT 433 (S.C.)] iv) CCE Bhubaneshwar Vs Oripol Industries [2003 (155) ELT 278 (Tri-LB)] v) Tata Consultancy Services Vs UoI [2001 (130) ELT 726 (Kar.)] 3.1 On the issue of unjust enrichment, ld.Advocate argued that they have produced a CA's certificate to the effect that refund sought for has not been passed on to the consumers. He relied upon the following case-laws to support his view point that CA's certificate has been accepted by Courts as an evidence of non-recovery of amounts from the customers unless contrary is indicated by the Revenue:- i) Mangal Textile Mills Pvt.Ltd. Vs UoI [2004 (171) ELT 160 (Guj.)] ii) CCE Vs Binakia Synthetics Ltd [2013 (294) ELT 156 (Tri-Ahmd)] iii) Gopi Krishna Processors Pvt.Ltd. Vs CCE [2007 (78) RLT 593 (CESTAT-DEL)] iv) Paper Products Ltd Vs CC (Imports) Mumbai [2009 (233) ELT 227 (Tri-Mum)] v) Zenith Ltd Vs CCE Mumba....
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.... them within a period of 90 days. 5.1 It is evident from the above trade notice that idea of restricting credit to only 10% was that buyer of the concerned inputs had borne the duty incidence of only 10% and the remaining 5% was absorbed by the Public Sector Refineries. In the present proceedings of the appellant Public Sector Refinery has only borne 'Zero%' of the duty and the entire duty incidence on Naptha is borne by the appellant under Rule 196 of Chapter X of Central Excise Rules 1944 for not using the inputs for the intended purpose for which the inputs were procured. The provisions of Notification No.5/94-CE(NT), d.3.5.97, as amended, thus will not be applicable. The facts of the present case are similar to the facts involved in case of imported goods on which higher CVD was paid, as in the case of Gujarat Paraffins Pvt.Ltd. Vs OiI (supra). Para 37 & 38 of this order passed by jurisdictional High Court is relevant and is reproduced below:- 37. It is a settled legal proposition that if initial action is not in consonance with law, subsequent proceedings would not sanctify the same. In such a fact situation, the legal m....
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....made vide various Trade Notices, the objective of restricting Modvat credit to only 10% right from July 23, 1996 in case of APM products i.e. petroleum products purchased from public sector refineries was clarified by the Government itself. The objective of the amendments so made vide Notification No. 14/97 and Section 87 of the Finance Act, 1997 was to restrict Modvat credit to 10% for inputs produced and manufactured in India is thus an undisputable position. By clubbing non-APM products, i.e. inputs imported on payment of full duty at the rate of 15%, the objective was not achieved and the amendments had no rationale relation with imports of petroleum products at full rate of duty. 5.2 In view of the above observations and the relied upon case-laws appellant was liable to credit of duty paid @ 15% and cannot be restricted to 10% as the provisions of Notification No.5/94-CE (NT), as amended are not applicable to the present facts because the entire duty incidence is borne by appellant as per Rule 196 of Central Excise Rules, 1944 and not the Public Sector Refinery. 6. So far as applicability of unjust enrichment is concerned appellant has relied upon CAs certificates to the ef....