2017 (1) TMI 159

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....he manufacture of the finished products. However, in respect of one input, Furnace Oil, they could not maintain separate accounts for the reason that the same was stored in a tank, and was carried to the boiler by way of pipelines and the resultant steam was being used for both dutiable and exempted goods. The Department issued Show Cause Notices demanding that 10% of the amount on the exempted goods has to be paid in terms of Rule 6 (3) of CENVAT Credit Rules 2004, as the appellant failed to maintain separate accounts. After receipt of Show Cause Notices the respondents reversed the entire CENVAT credit of Rs. 13,94,072/- and Rs. 2,13,961/- on 24.11.2007, which according to appellant was attributable to Furnace Oil used both for dutiable a....

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....dismissed, the department appeal vide Final Order No. 26603/2013 dated 20.09.2013. Thus, the issue so far as duty demand is concerned attained finality. 4. Since the respondents reversed the credit even in respect of Furnace Oil used for dutiable goods, at the time of adjudication proceedings Under Protest , they sought refund of Rs. 11,45,571/- and Rs. 1,53,456/-. The Assistant Commissioner after going through the factual evidence and the detailed cost certificates issued by the Cost Accountant, granted the proportionate refund of Rs. 12,34,699/-, but deducted Rs. 60,552- towards interest and granted refund of Rs. 11,74,147/- vide Order-in-Original No. 658/2008-R dated 22.10.2008. Being aggrieved by this Order-in-Original the Department p....

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....the refund claim. That respondent would be eligible to take the credit of the duty paid on Furnace Oil used in manufacture of dutiable goods. He also argued that proviso (c) to Section 11 B (2) of Central Excise Act 1944, clearly states that the refund arising out of credit of duty paid used in the manufacture of exsiable goods will not attract unjust enrichment clause. He relied upon the decision laid in the case of CC & CE Ahmedabad Vs. Dura Syntex Ltd., [2003 (154) E.L.T. 422 (Tri.-Mum.)]. 7. I have heard the rival submissions. The issue is whether the refund is hit by unjust enrichment. The law contained in proviso (c) to Section 11 B (2) of Central Excise Act, 1944, is noteworthy. The proviso to Sub-Section 2 of Section 11B states tha....