GUJARAT STATE FERTILIZERS & CHEMICALS LTD. Vs. CCE

JUDGEMENT

(1.) THIS appeal has been filed by appellant Gujarat State Fertilizers & Chemicals Ltd, Fertilizernagar, Vadodara against OIA No.Commr.(A)/ 12/VDR -I/2008, dt.8.2.2008. Under this OIA, first appellate authority has upheld the OIO No.Refund/111/GSFC/Dn -1/07 -08, dt.16.10.2007 passed by the adjudicating authority rejecting refund claims of Rs.4,16,535/ - and Rs.3,06,887/ - filed by the appellant.

(2.) APPELLANT procured Naptha without payment of duty for the manufacture of fertilizers by following the procedure prescribed under erstwhile Chapter X of the Central Excise Rules 1944. A part of the duty free Naptha was used in the manufacture of Synthesis gas which was further used in the manufacture of Ammonia and Caprolactam instead of fertilizers. Appellant paid the duty on such quantity of Naptha @ 15% used in the manufacture of Ammonia/ Caprolactam 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 J. Nair (AR) appearing on behalf of the Revenue argued that on merits appellant was not entitled to take credit @ 15% before issue of amending Notification No. 60/97 -CE dt.27.11.1997. Ld.A.R. accordingly defended the orders passed by the first appellate authority on merits as well as on unjust enrichment.