COMMISSIONER OF CENTRAL EXCISE. Vs. ITC LIMITED

JUDGEMENT

(1.) This appeal is by the revenue challenging the order passed by the Tribunal 2010 (262) E.L.T. 949 (Tribunal), which has upheld the order of the appellate authority, which directed for refund of the excess duty paid to the Assessee.

(2.) The Assessee M/s. ITC Limited, Bangalore are manufacturers of cigarettes falling under Chapter 24 of CETA, 1985. A provisional order came to be passed permitting the Assessee to pay duty as per the price lists from time to time under the erstwhile Rule 173C of the Central Excise Rules, 1944. Subsequently, an order-in-original No. 22/2001 dated 26-7-2001 finalized the provisional assessment for the period from 1-10-1975 to 28-2-2003 and demanded a differential duty of Rs. 583.19 crores approximately, from the Assessee. Aggrieved by the said order, the Assessee preferred an appeal to the Commissioner of Central Excise (Appeals). The order-in-original was set aside and the matter was remanded to the Assessing Authority for re-determination of the assessable value of the cigarettes for the period in question after allowing the deductions allowable in law. After such re-determination, the Assessing Authority held that a sum of Rs. 3,76,29,657.53 has been paid in excess by the Assessee for the aforesaid period. In order to refund the aforesaid excess amount, the Assessing Authority called upon the Assessee to produce documents to substantiate the deductions claimed. The documents were produced. However, instead of refunding the said amount, by an order dater" 31-8-2004 after sanctioning of the refund, he credited the same to the Consumer Welfare Fund invoking the provisions of unjust enrichment based on the Hon'ble Supreme Court's judgment in the case of Mafatlal Industries, 1997 89 ELT 247. Aggrieved by the said order, Assessee preferred an appeal to the Commissioner (Appeals), Bangalore. The Commissioner of Appeals set aside the said order and held that the Assessee is eligible for refund and the case is not hit by the provisions of unjust enrichment. However, the Assessee had requested for adjustment of the aforesaid amount which was sanctioned for refund of the amount which are determined to be due by the Assessee to the department. Accordingly, the said adjustment was done and after such adjustment, the amount which was actually due to the Assessee was Rs. 1,26,66,595/- only. The said amount was ordered to be refunded to the Assessee. Aggrieved by the said order, the revenue preferred an appeal to the Tribunal. The Tribunal held that the doctrine of unjust enrichment applies to the facts of the case. It also held that the burden of proving of the liability is not passed on to the customer squarely falls on the Assessee. However, it held that it is for the adjudicating authority to decide finally whether any such burden is passed on to the customer. However, relying on a judgment of the Punjab and Haryana High Court in the case of CEE, Chandigarh v. Modi Oil and General Mills, 2007 210 ELT 342 the Tribunal upheld the order of the Appellate Authority. Aggrieved by the same, the revenue is in appeal before this Court.

(3.) The learned Counsel appearing for the Appellant assailing the impugned order contended that in view of the constitution bench judgment of the Supreme Court in the case of Mafatlal Industries Ltd. v. Union of India, 1997 89 ELT 247 the doctrine of unjust enrichment will not apply to the case on hand. As the burden of showing that the duty is not passed to the customer is not discharged by the Assessee, the Assessing Authority was justified in directing crediting of the amount refundable to the Welfare Fund. The Appellate Authority was in error in interfering with the said order. Even though the tribunal has accepted the case of the revenue in all aspects, while the granting the final relief, it has followed by the judgment of the Punjab and Haryana High Court and upheld the order of the Appellate Authority, which is expressly illegal and calls for interference.