COMMISSIONER OF C. EX. Vs. ELGI ULTRA INDUSTRIES

JUDGEMENT

(1.) THIS is Revenue's appeal challenging the grant of refund of an amount of duty of Rs. 41,58,566/ - by the lower appellate authority to the respondents.

(2.) THE Respondents are manufacturers of Drip Irrigation System falling under Central Excise Tariff Heading No. 84.24. The various components of this product include plastic (HDPE/LDPE) tubes. The respondents manufacture these plastic tubes and consume the same captively for the purpose of manufacture of Drip Irrigation Systems. A dispute had arisen in the past, as to whether the plastic tubes/pipes as parts of Drip Irrigation System could also be classified under CET Heading 84.24 as claimed by the assessee and whether the benefit of exemption under Notification No. 56/95 -C.E., dated 16 -3 -95 was available to the plastic tubes cleared for captive consumption. That dispute ultimately came up before this Tribunal and, by Final Order No. 1885/99, dated 30 -7 -99, this Tribunal decided the issue in favour of the assessee. However, by that time, the assessee had already deposited 'under protest' a total amount of duty of Rs. 92,02,446/ - on plastic tubes for the period October '95 to August '99 (period of dispute in this case). Out of that amount, an amount of Rs. 50,43,880/ - was paid by way of availment and utilization of Modvat credit on the inputs used in the manufacture of the plastic tubes, and the balance amount of Rs. 41,58,566/ - was paid from PLA. Pursuant to the Tribunal's Final Order ibid, the assessee filed a refund claim in respect of the latter amount of Rs. 41,58,566/ -. Again, the question arose as to whether the refund claim was hit by the bar of unjust enrichment or not. The original authority applied the bar of unjust enrichment to the refund claim and ordered the amount to be credited to the Consumer Welfare Fund under Section 11B(2) of the Central Excise Act. The aggrieved assessee preferred appeal to the Commissioner (Appeals), who set aside the order of the lower authority and directed refund of the duty. Hence the present appeal of the Revenue.

(3.) EXAMINED the records and heard both sides.