STEEL STRIPS LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants herein filed a refund claim for Rs. 42,07,977/ - in respect of Central Excise duty paid during the period from 19 -2 -1996 to 29 -6 -1996 in respect of cold rolled steel strips made from hot rolled strips on the ground that as per the judgment in their own case reported in 1995 (77) E.L.T. 248 (S.C.), the activity of cold rolling out of duty paid hot rolled steel strips does not amount to manufacture. The Department was of the view that the above judgment which related to the period prior to 28 -2 -1986 when all kinds of strips were classifiable under T.I. 26 -AA, was not relevant in the context of the present Central Excise period which contained separate sub -headings for hot rolled strips (7211.51) and cold rolled strips (7211. 52). It also appears that the as -sessee had passed on the duty burden to its buyers and therefore, grant of refund would amount to unjust enrichment which was against the provisions of Section 11 -B of the Central Excise Act as amended in September 1971.

(2.) ACCORDINGLY a show cause notice dated 14 -8 -1996 was issued proposing rejection of the refund claim on both the grounds. The Assistant Commissioner relied upon an earlier order of the Assistant Commissioner, Central Excise, Patiala and rejected the refund claim; the Commissioner (Appeals) upheld the stand that the judgment of the Supreme Court in the case of same assessee cited supra was not relevant in the context of the Tariff as it stood subsequent to 1 -3 -1986 and he also held that the refund could not be sanctioned because of the bar of unjust enrichment. Hence this appeal.

(3.) WE have heard Shri K.K. Anand, learned Advocate and Shri R.K. Sharma, learned DR. We agree with the learned Counsel that it is not sufficient for the Revenue to state that Apex Court judgment in their own case is not relevant in the context of new Tariff. The Department is required to adduce evidence that the process of cold rolling of steel strips from hot rolled strips amounts to manufacture of a new excisable commodity. No evidence has been brought on record to show that such process amounts to manufacture so as to give rise to duty liability. The fact that hot rolled steel strips and cold rolled strips fall under two different sub -headings of the same Chapter heading namely Heading 73.11 is not sufficient to conclude that the process of cold rolling from hot rolled strips amounts to manufacture. The burden cast upon the Revenue to show that manufacture has taken place has not been discharged. Hence we hold that the refund claim is admissible on merits; however, the appellants will have to satisfy the Assistant Commissioner to whom the matter is remanded that they have not passed on the burden of duty to their customers. Upon such satisfaction, the Assistant Commissioner shall sanction refund to the appellants. If, however, they fail to satisfy him, the refund amount shall be credited to the Consumer Welfare Fund.