KISANVEER SATARA SSK LTD. Vs. CCE

JUDGEMENT

(1.) THE appellants are engaged in the manufacture of sugar and molasses which were being cleared by them on payment of duty. The appellant were having a distillery plant and part of the molasses were being cleared to this distillery plant on the basis of comparable price of some other units which was disputed by the department and consequently demanded duty amounting Rs. 29,68,106/ - for the period January 1995 to September 1996. In the earlier round of proceedings, the matter has gone up to the Commissioner (Appeals) and it was remanded to the original adjudicating authority who confirmed the demand of Rs. 11,77,971/ -. Thereafter the matter again reached up to the Tribunal and the demand was finally reduced to Rs. 8,53,079/ - for the period January 1995 to April 1995. During the intervening period the appellants have paid an Amount of Rs. 11,77,791/ - along with interest of Rs. 6,46,899/ -. As a consequence of the Tribunal's order the appellants have filed a refund claim for an amount of Rs. 9,74,611/ - in respect of certain excess amount of duty and interest paid by them. However, a show cause notice was issued to them stating that they were liable to pay interest on this amount of Rs. 8,53,079/ - upheld by Tribunal and requiring them to pay interest from three months after the date of original order 21.10.97. After adjusting the interest of Rs. 6,46,899/ - already paid, the show cause notice demanded balance interest amounting to Rs. 2,03,345/ -. This amount of Rs. 2,03,345/ - was adjusted against their refund claim of Rs. 3,27,712/ - and consequently the net refund due was determined as Rs. 1,24,367/ - which was proposed to be transferred to Consumer welfare fund on account of unjust enrichment. The matter was adjudicated by the Assistant Commissioner who confirmed the interest for entire period and denied the refund of Rs. 1,24,367/ - on grounds of unjust enrichment. The matter was taken up to Commissioner (Appeals) who upheld the demand of interest from the original date of order, as according to him, even though the provisions of interest were introduced from 26.5.95 and the demand relates prior to that period, the show cause notice was issued after the date of amendment. He however agreed with the appellant that the refund of Rs. 1,24,367/ - cannot be denied on the ground of unjust enrichment and accordingly ordered the refund of this amount. It is against this order that the appellants have com up in appeal.

(2.) LD . advocate for the appellants submits that in this case the duty is for the period January 1995 to April 1995 when the provisions relating to interest were not there, as the same were introduced with effect from 26.5.95. He refers to the decision of the Tribunal in the case of Komal Straw Board and Mill Board Inds. v. Commissioner of Central Excise, Ludhiana wherein it has been clearly held that interest under Section 11AA of the Central Excise Act, 1944, cannot be charged in respect of demand pertaining to period when such provisions were not there in the statute book. He also refers to the decision of the Supreme Court in the case of Elgi Equipments , where in respect of provisions of Section 11AB it has been held that interest cannot be upheld for the period prior to the introduction of Section 11AB even though show cause notice may have been issued after the introduction of Section 11AB. In view of this he submits that he is not liable to pay any interest at all and therefore, the entire refund claim should be sanctioned.

(3.) HEARD both sides.