NEOLI SUGAR FACTORY, Vs. CCE, NEW DELHI

JUDGEMENT

(1.) This appeal filed by M/s Neoli Sugar Factory is against the orders of the lower authorities rejecting a refund claim of the appellants on the grounds of time -bar and unjust enrichment.

(2.) The appellants are engaged in the manufacture of cane sugar. During the period 1978 -79 and 1979 -80, they had paid duty and valorem on the levy sugar on the basis of the price fixed by the Central Government as per orders issued under Section 3(3)(c) of the Essential Commodities Act, 1955. They, along with many other sugar manufacturers, challenged the price fixation before the Allahabad High Court in writ petitions and the High Court, by interim order dated 21.01.1980, fixed the prices for different grades of levy sugar. The appellants paid duty on the levy sugar for the aforesaid period on the basis of the price so fixed by the High Court. The High Court's decision was taken up in appeal before the Supreme Court. The apex court, by its judgement dated 22.09.1993, directed the Central Government to refix the price of levy sugar for the above periods. Accordingly, the Central Government issued orders dated 22.02.1995 fixing the prices of various grades of levy sugar for the periods 1978 -79 and 197 -80. Since the prices fixed under these orders were lower than the prices fixed by the High Court on the basis of which the appellants had paid duty for the aforesaid periods, there was an excess payment to the tune of Rs. 3,53,502.47. The appellants claimed refund of this amount by filing application in the prescribed format on 16.10.1995. The Department, by show -cause notice (SCN), asked the party to show cause why the refund claim should not be rejected on the grounds of time -bar and unjust enrichment. The appellants contested the notice. The jurisdictional Assistant Commissioner rejected the refund claim on both the grounds. The appeal preferred by the aggrieved party to the Commissioner (Appeals) against the Assistant Commissioner's order was also rejected. Hence the appeal before the Tribunal.

(3.) Heard both sides. Ld. Advocate Shri M.P. Devnath for the appellants submitted that, as the excess duty had been paid pursuant to the High Court's order, the payment ought to have been considered as one made under protest, in which case there was no question of applying the time limit prescribed under Section 11B(1) of the Central Excise Act to the appellants' refund claim. He drew support to this contention from the Supreme Court's decision in the case of Mafatlal Industries Ltd. Vs Union of India [1999 (89) E.L.T. 247 (SC)]. Ld. Counsel further argued that the assessment of duty on levy sugar for the aforesaid period should be considered as provisional assessment, having regard to the fact that the question of fixing the price of levy sugar was sub judice. The provisions of unjust enrichment under Section 11B(2) were not applicable to a case of provisional assessment, Counsel submitted. In this connection, he relied on the Tribunal's decisions in the cases of CCE, Chennai Vs T.V.S. Suzuki Ltd [1999 (34) RLT 668] and G.K.N. Invel Transmissions Ltd. Vs Commissioner of Customs [2001 (42) RLT 711]. Therefore, according to ld. Advocate, the refund claim of the appellants was not to be rejected on either of the two grounds.