CIMMCO LTD. Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appeal is directed against the appeal dated 18 -6 -1993 passed by the Collector of Central Excise (Appeals), New Delhi confirming the Order -in -Original dated 25 -1 -1993 passed by the Assistant Collector of Central Excise, Alwar sanctioning refund amount of Rs. 3,37,078.50 but ordering the credit of the same to the account of National Consumer Welfare Fund established under Section 12C of Central Excise Act, 1944.

(2.) ARGUING the case of the appellant, Shri D.G. Chaturvedi, learned Counsel stated that the appellant had entered into a contract with M/s. Indian Oil Corporation (IOC) for "supply, fabrication and mounting of heating coils inside tank wagons for LSHS service". The contract covered 150 tank wagons. They applied for permission under Rule 173H of Central Excise Rules for bringing duty paid wagons and other duty paid materials for such fabrication job. After obtaining necessary permission from the department they executed the work and cleared the tank wagons on payment of duty, as demanded by the department, under protest. Thereafter, they claimed refund. When this was rejected they filed appeal to the Collector (Appeals) who, vide her order dated 27 -2 -1990, held that the processes carried out by the appellant did not amount to manufacture and that since the Assistant Collector had concluded that the goods are covered by Rule 173 -H he should have allowed clearance without payment of duty. Armed with this order appellant filed refund claim for the consequential refund amount. The claim was rejected by the Assistant Collector vide his order dated 15/17 -6 -1991 on the ground of unjust enrichment. This led to a second round of appeal before the Appellate Collector and that authority vide order dated 30 -12 -1991 held that refund was available and the same should be sanctioned as per the provisions of Central Excise & Customs Laws (Amendment) Act, 1991. The appellant thereupon applied for refund before the Assistant Collector and the Assistant Collector passed order dated 25 -1 -1993 on the ground that schedule of rate of work order dated 28 -1 -1988 were inclusive of all duties, taxes and to and fro handling charges and hence concluded that appellant had passed on the duty burden to the customer and hence if refund is allowed to the appellant it will result in unjust enrichment. This order of the Assistant Collector having been upheld by the Collector (Appeals) vide Order -in -Appeal dated 18 -6 -1993 has led to the present appeal.

(3.) RESISTING the arguments of the learned Counsel, Shri M. Ali, JDR supported the findings of the lower authority. He referred to the findings of the Assistant Collector in his order dated 25 -1 -1993 that the schedule rates for the work of Rs. 54,770/ - per tank wagon included the excise duty also for which he had relied upon the schedule of rates of the work order dated 28 -1 -1988 which referred to the rates being inclusive of all duties, taxes and to and fro handling charges. Shri Ali referred to the certificate dated 29 -10 -1992 issued by the customer, M/s. IOC stating that in respect of the particular work order dated 28 -1 -1988 they confirmed that no separate excise duty had been paid to the appellant. The said certificate goes on to state that as the work order in question had been placed on a lump sum price of Rs. 54,396/ - per tank wagon as per the provisions of the work order. The fact that the customer had certified that no separate excise duty was paid by them would clearly imply that the amount mentioned in the work order included the excise duty and that was why they were not paying excise duty separately. Shri Ali also pointed that when the appellant had applied for permission under Rule 173H, the Assistant Collector had given such permission subject to the condition that they should pay the duty. Since the question of dutiability had been raised by the Assistant Collector and the appellant had in acquiescence of such a permission carried the fabrication work and quoted a lump sum amount for such activity, it has to be taken that the contract amount would include the excise duty element also which is also clear from the language of the annexure to the work order referred to already. For these reasons, he pleaded that as the Assistant Collector had correctly decided the matter holding that appellant had recovered the amount of duty in question from the customer by including it in the lump sum amount and the Collector (Appeals) had correctly upheld the same, the order may be upheld and the appeal dismissed.