TATA TEA LTD. Vs. CCE

JUDGEMENT

(1.) THIS appeal arises from Order -in -Appeal No. 27/98 (CBE) dated 5.6.1998 by which the refund claim of Rs. 3,49,990/ - was rejected by the authorities below on the ground that the refund claim was hit by the provisions of unjust enrichment under Section 11B of the CE Act and that there was a direction to transfer the amount to the consumers Welfare Fund. This amount was claimed as refund under the scheme of Central Excise Duty relief of higher production of tea under the Incentive Rebate Scheme as envisages under Notification No. 198/96 dated 16.6.1996. The appellant had contended that this incentive rebate was not hit by principles of unjust enrichment as it was an incentive given for higher production and it was not an incidence of duty required to be passed on to the consumers. However the authorities below did not consider this plea and hence this appeal. Counsel Shri Thomas Vellapally submits that the issue is no longer res Integra. The Larger Bench in the case of Kesar Enterprises Ltd. v. CCE, Kanpur and Meerut as reported in : 2000 (119) ELT 295 have held that the incentive rebate is not hit by the principles of unjust enrichment and they are required to be refunded to the assessee. It is also been held that exemption under tax is granted to encourage the industrialisation or concession to existing industries for their development and it should not be confused with refund of tax. The incentive was granted to the industry for their development. He also relied on the Larger bench judgment rendered in the case of DSM Sugar (Kashipur) Ltd. v. CCE, Meerut as reported in : 2000 (121) ELT 809. He further relied on the Apex Court judgment rendered in the case of Belapur Sugar & Allied Industries Ltd. v. CCE, Aurangabad as reported in, 1999 (108) ELT 9 (SC) :, 1999 (82) ECR 209 (SC) wherein the Apex Court has interpreted the term incentive rebate for higher production granted to sugar industries under Notification No. 132/82 -CE dated 21.4.1982 as amended by Notification No. 193/82 -CE dated 11.6.1982. The Apex Court held that the refund is not refusable on the ground that the assessee has already paid the excess duty. He therefore submitted that the order is not correct and the same is required to be set aside.

(2.) Heard DR Shri C. Mani, who reiterates the departmental view. I have carefully considered the submission and have perused the judgments cited by the counsel. I notice that the issue is no longer res Integra and the Larger Bench in the case of Kesar Enterprises Ltd. v. CCE, Kanpur & Meerut (supra) has clearly held that the rebate granted as incentive for excess production is not a bar of unjust enrichment and the said provisions of unjust enrichment are not applicable. Likewise the Apex Court has also emphasised the same in the case of Belapur Sugar & Allied Industries Ltd. v. CCE (supra) with regard to the incentive rebate for higher production. Respectfully following the above judgments I set aside the impugned order and allow the appeal with consequential relief, if any.