MERCURY MANUFACTURING COMPANY Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS application is for early disposal of the appeal on the ground that the issue arising in the case is squarely covered in favour of the appellants by a Larger Bench decision of this Tribunal. After perusal of the cited decision and hearing both sides, we are of the view that the appeal can be disposed of forthwith. Accordingly, after allowing the application, we proceed to deal with the appeal.

(2.) THE appellants are a 100% EOU discharging duty liability in terms of the proviso to Section 3(1) of the Central Excise Act. Their duty liability, for the material period, was to be determined in quantitative terms under Notification No. 2/95 -CE. The parent provision (Section 3 of the Central Excise Act) was amended retrospectively by the Finance Act, 2000 affecting the duty liability of EOUs. But Notification No. 2/95 -CE was amended only with effect from 1.3.2002. After such amendment, a new method of calculation of the duty of excise payable by EOUs was in place. The lower authorities adopted this method and demanded differential duty from the appellants for the period September 1999 to February 2001. In the present appeal, the case of the appellants is that the amount of duty to be paid for the said period should be quantified in terms of pre -amended Notification. In other words, the appellants are canvassing prospective operation of the amended Notification. The quantification of duty done in the impugned order is based on the amended provisions of Section 3 of the Act read with amended provisions of the Notification. Divergent views on the issue arising out of these facts were expressed by co -ordinate Benches of this Tribunal and, consequently, a Larger Bench of this Tribunal was called upon to resolve the conflict. In the case of Indoworth India Limited v. CCE, Nagpur , the Larger Bench held that the Board could not alter the scope of the method of calculation of the duty under Notification No. 2/95 -CE through a Circular without amendment of the Notification itself. Accordingly it was held that the Board's Circular No. 7/01 -Cus dated 6.2.2001 had effect only from 1.3.02, the date on which the Notification was amended. Consequent to this decision of the Larger Bench, it was open to the appellants to pay duty, for the above period, in terms of the method of calculation provided under the pre -amended Notification. It appears that they paid duty as quantified by the lower authorities under the amended Notification. They are claiming refund of the differential amount of Rs. 1,26,711/ -

(3.) AFTER hearing both sides and considering their submissions, we set aside the impugned order in the light of the Larger Bench decision and hold that the appellants are entitled to claim refund of the above amount subject, (Sic) of course, to the test of unjust enrichment, which aspect shall be looked into by the original authority. The appeal stands allowed.