S. KUMAR LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE above appeal has come up for consideration before Larger Bench by way of reference made by Single Member in Misc. Order No. M/79/02/NB (SM), dt. 16 -4 -2002 [2002 (143) E.L.T. 641 (Tribunal)].

(2.) REFERENCE was necessitated since two co -ordinate Division Benches of this Tribunal have taken divergent views on the question whether post -clearance adjustment like issuance of credit notes or cheques by the assessee who is claiming refund, to buyer of the goods, taking back the burden of duty on the goods would help the assessee to get over the bar of unjust enrichment under Section 11B of the Central Excise Act.

(3.) THE appellants were job workers for M/s. Dhvani Terrifabs Export Pvt. Ltd. (for short M/s. DTE). They received raw material (grey fabrics of cotton) from M/s. DTE and after processing the same, supplied the processed fabrics (falling under Chapter 60 of the Schedule to the Central Excise Tariff Act, 1985) to M/s. DTE. During the period 5 -3 -97 to 30 -8 -97, the appellant cleared processed fabrics to M/s. DTE on payment of Additional Excise Duty (AED) in lieu of sales tax @ 8% ad valorem under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The total duty so paid was Rs. 8,43,041/ -. Later on realizing that under Notification No. 9/96 -C.E., dt. 23 -7 -96, the goods were exempt from such duty, the appellant sent to M/s. DTE a cheque dt. 3 -9 -97 for Rs. 7,08,520/ - which is equivalent to the amount of duty, the appellants had collected from M/s. DTE at the time of clearance of the goods. It is to be noted that the appellant had not collected the differential amount of Rs. 1,34,521/ - from M/s. DTE at the time of clearance of the goods.