COMMISSIONER OF CENTRAL EXCISE Vs. SOUTHERN AGRIFURANE INDUSTRIES

JUDGEMENT

(1.) This appeal of the Revenue is against an order which was passed by the Commissioner of Central Excise (Appeals) in a second round of litigation. The respondents were manufacturers of 'furfuraldehyde' (hereinafter referred to as furfural) which was an input for bulk drugs. Furfural was exempted from duty of excise under notifications issued from time to time. One of these notifications was Notification No. 147/84 -CE dated 18.6.84, which was withdrawn with effect from 1.9.91 by Notification No. 35/91 -CE. The respondents, however, continued to clear their product without payment of duty. The Department issued a show -cause notice dated 26.2.93 demanding duty from them in respect of the clearances of 'Furfural' for the period 1.9.91 to 29.12.92. The demand was resisted, but confirmed by the original authority as per an order dated 9.9.93. The demand so confirmed was for an amount of Rs. 1,54,41,755. The authority also imposed a penalty of Rs. 15.00 lakhs on the party under Rule 173Q. Aggrieved by this decision of the original authority [Collector of Central Excise], the respondents preferred an appeal to this Tribunal and made therein a pre -deposit of Rs. 40.00 lakhs as directed by the Tribunal. That appeal was disposed of as per order dated 8.5.96, whereby the order of the Collector confirming the demand of duty was upheld but the quantum of penalty was reduced. Thereupon, the respondents paid the balance of amount of duty (Rs. 1,15,41,755) on 23.7.96. The respondents, however, approached the Tribunal with an application seeking rectification of mistake in order dated 8.5.96, which application was partly allowed as per order dated 23.1.98. The order of rectification restricted the demand of duty to the normal period of limitation. Thus, the respondents were held not liable to pay duty for the period beyond the normal period of six months preceding the date of issue of the show -cause notice. Consequentially, the respondents were eligible to apply for a refund of duty. This application, they filed on 25.2.98 with the jurisdiction Assistant Commissioner. Subsequently, a show -cause notice dated 21.5.98 was issued to the respondents asking them to show cause why cash refund should not be denied on the ground of unjust enrichment. This show -cause notice was adjudicated upon by the Assistant Commissioner by order dated 8.12.99 whereby refund of an amount of Rs. 1,05,62,041 was sanctioned to the respondents. The department then preferred an appeal to the Commissioner (Appeals), pursuant to review of the Assistant Commissioner's order by the jurisdictional Commissioner. The Commissioner (Appeals), by order dated 20.10.2000, set aside the order of the lower authority and remanded the case to it with certain specific directions. The terms of this remand are contained in para 14 of the order of the Commissioner (Appeals), which is extracted below:

(2.) Heard both sides. Ld. Consultant Shri Mandal, representing the appellant, has made an attempt to revive the time -bar issue, after referring to a miscellaneous application filed in this appeal by the Department. Miscellaneous application No. E/AG/320/2003 was filed by the appellant for leave of the Bench to introduce an additional limitation -related ground in the appeal. We have perused this application and have considered the arguments thereon. The appellant wants to raise time -bar as (additional ground for challenging the refund order. Ld. Consultant has urged that this additional ground be allowed to be incorporated. This plea has been vehemently opposed by the respondents' counsel, who submits that the question whether the refund claim was time -barred or not had been buried long back. Counsel refers to the order dated 19.12.2001 of the Assistant Commissioner and submits that, in para 3(a) of the findings thereof, the adjudicating authority categorically held that "there cannot be a dispute on the part of time factor in preferring the claim by the assessee in the instant case. So, I do not propose to proceed further on this point". It appears to us from this and further submissions made by both sides that the finding of the Assistant Commissioner has already become final and binding for want of challenge by the Department. The Assistant Commissioner's finding, upon attaining finality, rendered the refund claim immune to challenge on the ground of limitation. Hence, the application seeking to incorporate time -bar cannot be allowed and the same is rejected.

(3.) Ld. Consultant now proceeds to argue on the issue of unjust enrichment. He seeks to distinguish the case law relied on by the Commissioner (Appeals) in the impugned order. On the order hand, Ld. Counsel for the respondents submits that the issue arising in this case stands squarely covered by the case law relied on by Ld. Commissioner (Appeals). Ld. Counsel adds to the case law by citing the Tribunal's decision in CCE, Pune v. Charda Chemicals Ltd., 2003 (56) RLT 929, wherein the above case law was followed. The case law relied on by the Commissioner (Appeals) is the following: