BAJAJ HINDUSTAN LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE facts leading to filing of this appeal are, in brief, as under. The appellant are a sugar mill engaged in manufacture of sugar and molasses. The period of dispute in this case is from 1 -5 -1982 to 30 -9 -1982. During that period, Notification No. 132/82 -C.E., dated 21 -4 -1982 issued under Rule 8(1) of Central Excise Rules, 1944 prescribed certain quantum of exemption on per quintal basis in respect of free sale of sugar and levy sugar produced in a factory during the period from 1 -5 -1982 to 30 -9 -1982, which is in excess of the average production of sugar during the corresponding period of the preceding three sugar years. The appellant towards the end of the sugar season, filed a rebate claim claiming that the excess production during the period from 1 -5 -1982 to September 1982 was 43,875 quintals of sugar. This rebate claim was filed by them on 3 -9 -1982. As per the rebate scheme of this exemption notification, 60% of the rebate claim was required to be sanctioned on provisional basis on presenting the rebate claim and the balance amount was to be given after pre -audit. The rebate was being given as credit entry in the PLA and this credit in the PLA could be utilized by the sugar mill for payment of duty on clearances of sugar. In this case 60% of the amount i.e. Rs. 7,57,264/ - was sanctioned by the Assistant Commissioner on 7 -6 -1983. However, after pre -deposit of the claim, the Assistant Commissioner, instead of sanctioning the balance amount, issued a show cause notice for rejecting the claim as time barred and subsequently passed an order dated 18 -8 -1987 rejecting the entire claim as time barred and also confirmed the demand for recovery of the amount sanctioned earlier on provisional basis. On appeal being filed to Commissioner (Appeals) against this order, the same was dismissed by the Commissioner (Appeals). The appellant filed an appeal to Tribunal, which disposed of the matter vide final order No. 672/96, dated 5 -11 -1996 by which the Tribunal held that the rebate claim is not time barred and remanded the matter back to Assistant Commissioner with direction to process the claim on merit and issue an appropriate order. No appeal was filed by the Department against this order of the Tribunal and, as such, the same was accepted. However, at this stage, another show cause notice dated 21 -10 -1997 was issued by the Assistant Commissioner to the appellant proposing to reject the entire claim on the ground of unjust enrichment on the ground that the appellant had collected the normal amount of excise duty from their customers and, as such, had not borne the incidence of the duty whose refund is being claimed. The Assistant Commissioner accordingly rejected the rebate claim. On appeal being filed to Commissioner (Appeals) against this order, the Commissioner (Appeals) dismissed the appeal for non -compliance of the provisions of Rule 213 of the Central Excise Rules, 1944. On further appeal to the Tribunal, the Tribunal vide final order dated 19 -10 -2001 held that the appellant should have been given an opportunity to remove the defects in filing of the appeal, which were curable and remanded the matter to get the defects rectified and decide the appeal as per the law. In de novo proceedings, the Commissioner (Appeals) vide order -in -appeal dated 27 -5 -2005 held that the rebate claim filed by the appellant is hit by the principle of unjust enrichment and in this regard she relied upon the Apex Court judgment in the case of Sahakari Khand Udyog Mandal Ltd. v. CCE & CUS reported in : 2005 (181) E.L.T. 328 (S.C.). Against this order of the Commissioner (Appeals), the present appeal has been filed.

(2.) HEARD both the sides.

(3.) SHRI Yashpal Sharma, the learned DR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and relied upon the Apex court judgment in the case of Sahakari Khand Udyog Mandal Ltd. v. CCE & CUS reported in : 2005 (181) E.L.T. 328 (S.C.), wherein with regard similar exemption Notification No. 108/78 -CE providing for partial exemption from duty in form of rebate in respect of excess production of sugar, the Apex court held that the same would be subject to the principle of unjust enrichment. Shri Sharma also cited a recent judgment of the Tribunal in the case of CCE, Meerut -II v. Kisan Sahkari Chini Mills Ltd. (Final order No. A/1186/2012 -EX (BR), dated 26 -9 - : 2012) (2013 (287) E.L.T. 327 (Tri.)), wherein with regard to rebate claims in respect of excess production of sugar under Notification No. 132/82 -C.E., it was held that such rebate claims are subject to principle of unjust enrichment. He, therefore, pleaded that there is no infirmity in the impugned order.