JINDAL STRIPS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The appellants had, on 8.12.90, paid Central Excise duty of Rs. 20,95,845 from Personal Ledger Account, on a reheating furnace which they had made in their factory for captive use for manufacture of their products. In May 1991, they filed a refund claim for this amount with the Assistant Collector on the ground that, as per CBEC's clarification, immovable structures like the reheating furnace were not excisable and the duty had been paid erroneously. The Asst. Collector by a letter dated 3.7.1992 required the party to substantiate the ground raised for claiming refund. In their reply, the appellants contended that the view taken by the Board in respect of fabricated plastic fixtures was equally applicable to a furnace like theirs. The Assistant Collector rejected the refund claim as per order dated 13.9.1992 wherein, apart from holding the reheating furnace to be excisable goods, the adjudicating authority noted that the party had paid the duty as per approved Classification List and Price List. In the appeal preferred by the party against the Asst. Collector's decision, the Collector (Appeals) by order dated 29.1.1993 remanded the case for fresh adjudication. The Collector (Appeals) observed, in his order, that the factum of the duty having been paid as per approved classification/price lists was not relevant for considering the refund claim on merits. The department was not aggrieved by this part of the Collector's order. In the remanded proceedings, the Asst. Commissioner passed order dated 1.12.1995 rejecting the refund claim. He held that the Board's clarification relating to plastic fixtures was not applicable to the reheating furnace of the claimant, that the furnace was dutiable as it was specifically covered under SH 8417.00 of the CETA Schedule, that there was no evidence to show that the furnace was an immovable property and that the refund claim was not maintainable as the duty had been paid on the basis of approved classification/price lists. The party again appealed to the first appellate authority. The Commissioner (Appeals) again remanded the case to the lower authority, after noting that the latter's order was not in terms of the earlier remand order. Pursuant to the second remand order dated 27.12.2000, the Asst. Commissioner passed a detailed order (dated 25.9.2001) wherein he accepted the party's plea of non -excisability of the reheating furnace but held that - - (a) the refund claim was not maintainable as the duty had been paid as per provisional assessment under Rule 173F and the finalisation of assessment under Rule 173 -I on the basis of the approved classification list and the price list was not challenged by the assessee, and (b) the claim was hit by the bar of unjust enrichment. The Ld. Asst. Commissioner relied on the Hon'ble Supreme Court's judgments in the cases of Mafatlal Industries Ltd. v. UOI, 2002 (83) ECC 85 (SC): 1997 (89) ELT 247 (SC); UOI and Ors. v. Solar Pesticides Pvt. Ltd., 2000 (68) ECC 25 (SC) : 2000 (116) ELT 401 (SC) and CCE, v. Flock (India) Pvt. Ltd., 2000 (71) ECC 4 (SC) : 2000 (120) ELT 285 (SC). The appeal preferred by the party against the Assistant Commissioner's order was rejected by the Commissioner (Appeals). Hence, this appeal before us.

(2.) Heard both sides and considered their submissions. The lower appellate authority has considered and decided on two issues which, in the words of that authority, read as under: (i) whether the refund claim is admissible to the appellant inspite of the fact that the approved classification/price list was not challenged by the appellant? (ii) Whether the provisions of unjust enrichment have been properly applied by the original authority while rejecting the refund claim? On the first issue, Ld. Commissioner (Appeals) has held, in view of his predecessor's remand order dated 29.1.1993, that the Assistant Commissioner's decision based on the approved classification/price lists is beyond the scope of the said remand order. The Commissioner (Appeals) has held the refund claim to be maintainable (notwithstanding the undisputed fact that the assessee had not challenged the approval of classification/price lists or the final assessment based on the approved classification/price lists) on the basis of the unchallenged remand order dated 29.1.1993 which had held that the payment of duty as per the approved classification/price lists was irrelevant to the refund claim. This part of the impugned order has not been challenged by the department The department did not appeal against the remand order dated 29.1.1993 either. Therefore, the decision of the Commissioner (Appeals) on the first issue framed by him will stand.

(3.) Before proceeding to deal with the second issue framed by the Commissioner (Appeals), we have got to say that the lower appellate authority admitted to frame yet another basic issue which was involved in the case before it. The original authority had recorded a finding that the duty provisionally paid by the party had been finalised by the department under Rule 173 -I on the basis of the approved classification list and price list and that the assessee did not challenge the final assessment. It was this finding which, in view of the Supreme Court's rulings in Mafatlal Industries (supra) and Flock (India) (supra), formed the basis for the Asst. Commissioner to hold that the refund claim was not maintainable. The Commissioner (Appeal) overlooked the above finding of the lower authority while framing issues in the case. The issue missed by him is whether the refund claim is maintainable notwithstanding the fact that the final assessment of duty on the reheating furnace was not challenged by the appellants.