BHARAT BOX FACTORY LTD. Vs. CCE

JUDGEMENT

(1.) All these four appeals are against the common Order -in -Appeal No. 71 -74/CE/Appeal/LDH/2004 dated 28.1.2004 passed by the Commissioner (Appeals). The issue involved in all these cases is the same, therefore all these appeals were taken together for decision.

(2.) The appellants are manufacture of printed corrugated cartons falling under sub -heading 4819 -12 of the Schedule to the Central Excise Tariff. They paid duty under protest for the disputed period on the cartons manufactured by them. The department later accepted their contention of attracting nil rate of duty. On the clarification issued by the department/ they filed four refund claims for the duty paid under protest. All these refund claims were allowed and credit was given to the appellants in their Cenvat credit account equal to the amount of refund claimed by them. Subsequently on the basis of the Audit objection, show cause notices was issued to them for recovery of the refund erroneously sanctioned to them. The Adjudicating Authority confirmed the demands raised for the amount erroneously refunded and the order of the Original Authority was confirmed by the Commissioner (Appeals).

(3.) None appeared for appellants. They have requested to decide the appeals on merit. In their appeals they pleaded that the Commissioner (Appeals) has failed to consider that the refund amount cannot be recovered under Section 11A by issuing show cause notice without reviewing the order allowing refund under Section 35E of the Central Excise Act. They relied on the Tribunal's decisions in the case of Gallooram Gaurishanker v. CCE, Jamshedpur, 2001 (46) RLT 467 and La Opala RG Ltd. v. CCE, 2007 (46) RLT 350. Commissioner (Appeals) took the plea that since no appealable order was passed by refund sanctioning authority so issuance of show cause notice is correct. In this case there was no requirement of appealable order for filing appeal on the letter granting refund as the same was also sent to Commissioner office. They relied on the decision of Bombay High Court in the case of M/s. Austin Engineering Co. Ltd. v. Union of India, 2003 (90) ECC 785 (Bom) : 2003 (157) ELT 254 wherein it was held that nothing in the statute which prevent the revenue from challenging the communication if grant of refund found to be erroneous. The duty was paid under protest, hence Section 11B of the Act was not applicable. They relied on the decision in cases (i) Sinkhai Synthetics and Chemicals v. CCE, 2002 (83) ECC 5 (SC): 2002 (143) ELT 17 and (ii) Tecil Chemicals and Hydropower Ltd. v. CCE, 2003 (151) ELT 136. They also pleaded that on merits of the case, the lower authorities have not correctly interpreted the relevant clause. Clause (d) of provisos to Sub -section (2) of Section 11B at the relevant time provides that refund shall, instead of being credited to the fund, be paid to the appellant if the amount relatable to the duty of excise paid by the manufacturer, if he had not passed on the incidence of such duty to any other person. In the present case, the duty incidence has not been passed on to the buyers. The appellants have paid duty under protest on the directions of the department and recovered the same from the customers as the dispute with the department may take time and recovery of duty afterwards is not possible. However, later they issued credit notes to buyers for this amount. Appellants further pleaded that concept of unjust enrichment under Section 11B of the Act cannot be invoked in the present case. The refund claim has already been sanctioned and paid and so far as the refund is concerned, it is already closed matter. Thus, in respect of the refund already granted, the doctine of unjust enrichment is not applicable and the Order -in -Appeal confirming the demand of duty interest on the ground of unjust enrichment merits to be set aside.