ICI INDIA LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE issue involved in the present appeal is regarding applicability of unjust enrichment in the case of refund of pre -deposit paid during pendency of appeal before the CESTAT. The appellants are engaged in the manufacture of fungicide and there was a dispute regarding its classification. The dispute was ultimately decided in appellant's favour. During the course of appeal, the appellant had pre -deposited Rs. 7 lakhs towards duty.

(2.) THE ld. Advocate for the appellant took us to the order of the Commissioner (Appeals) where he has given conclusive finding that in case of pre -deposit, provisions of unjust enrichment cannot apply. It is for the Revenue to establish that the incidence of duty has been passed on. However, in the last para of his order, he holds that in view of Apex Court decision in the case of Sahakari Khand Udyog v. CCE , the matter needs verification by the original authority to ensure that the pre -deposit amount has not been passed on to any other person before refund can be sanctioned. Commissioner (Appeals) has also referred to Bombay High Court decision in Nelco's case wherein it has been held that pre -deposit is nature of security deposit and the provisions of unjust enrichment do not apply to it. But he has still chosen to remand the matter by holding that as per decision in the case of Sahakari Khand Udyog (cited supra) it needs to be verified, that the deposit is not ultimately passed on to the customers. He invites my attention to the case of Godrej Industries Ltd. v. CC vide order No. A/1334/WZB/2006/C.II dated 15/19.11.2006 wherein the Tribunal has specifically held that the deposit are in the nature of security and unjust enrichment do not apply. This position has been followed by the Tribunal in the specifically held that the deposit are in the nature of security and unjust enrichment do not apply to it. This position has been followed by the Tribunal in the case of Shree Percoated Steels Ltd. v. CCE vide order No. A/1464/C -IV/SMB/2007 dated 15.10.2007. In view of this it was submitted that the Commissioner (Appeals) order be set aside and the refund should be allowed to them.

(3.) I have heard both sides and considered the submissions.