GRASIM INDUSTRIES LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) M /s. Grasim Industries Ltd. have filed this appeal challenging the Order -in -appeal dated 16 -12 -1999 passed by the learned Commissioner (Appeals).

(2.) The facts of the case in brief are that the appellants filed a refund claim for Rs. 88 lakhs on the ground that the Hon'ble Supreme Court has finalised the classification of white cement under sub -heading 2502.20 chargeable to specific rate of duty and hence, the bank guarantee for Rs. 88 lakhs submitted by them for the amount equivalent to the differential duty between Tariff Heading 2502.20 and 2502.90 as per the direction of Rajasthan High Court and subsequently encashed by the Department is liable to be refunded to them. The Department alleged that the claim of the appellants for refund of duty attracts the doctrine of unjust enrichment in terms of provisions of Sections 12A and 12B of the Central Excise Act, 1944. Accordingly, a show cause notice was issued to the appellants asking them to explain as to why the refund claim should not be sanctioned and credited to Consumer Welfare Fund on the ground of unjust enrichment. In reply to the show cause notice, the appellants submitted that reimbursement of Rs. 88 lakhs is not subject to the provisions of Section 11B of the Central Excise Act, 1944 as was ruled by the Apex Court in the case of Oswal Agro Mills Ltd. v. Asstt. Collector of Central Excise, Ludhiana reported in : 1994 (70) E.L.T. 48.

(3.) IT was further contended that the Apex Court has clearly ruled in the case of Oswal Agro Mills Ltd. that the bank guarantee furnished by the assessee was in the nature of security for the Revenue; that in respect of the return of the bank guarantee, the provisions of Section 11B cannot come in play and that the provisions of Section 11B apply only when the appellant claims refund of excise duty. The appellants also submitted that the decision of the Apex Court in the case of Oswal Agro Mills Ltd. was followed by the Tribunal in the case of Jupiter Cement Industries Ltd. v. Collector of Central Excise, Rajkot reported in : 1998 (102) E.L.T. 308. It was also contended that the assessments were provisional during the period and, therefore, the provisions of Section 11B were not attracted. The Commissioner (Appeals) decided the issue as indicated above.