M/S. S.K.M. Fabrics vs Commissioner Of Central Excise, ...

[Arising out of Order-in- Appeal No. PD/74/M-I/2014 dtd. 28/5/2014 passed by the Commissioner (Appeals-I) Central Excise, Mumbai Zone-I]

For approval and signature:

Honble Mr Ramesh Nair, Member(Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

M/s. S.K.M. Fabrics : Appellants

VS

Commissioner of Central Excise, Mumbai-I : Respondent

Appearance

Shri. Sachin Chitnis, Advocate for the Appellants Shri. H.M. Dixit, Asstt. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 27/5/2015 Date of decision: 27/5/2015

ORDER NO.

Per : Ramesh Nair

This appeal and stay application are directed against Order-in- Appeal No. PD/74/M-I/2014 dtd. 28/5/2014 passed by the Commissioner (Appeals-I) Central Excise, Mumbai Zone-I, wherein Ld. Commissioner(Appeals) allowed the Revenues appeal setting aside the order-in-original No. K-II/01/2013-14(Refund) dated 13/8/2013.

2. The fact of the case is that the appellant had paid excise duty under protest under compound levy scheme and claimed the refund for an amount of Rs. 1,18,727/-. The original authority vide its order dated 13/8/2013 sanctioned the refund claim of Rs. 1,18,727/- alongwith interest of Rs. 67,411/-for delayed sanctioned of refund. Being aggrieved by the said order-in-original dated 13/8/2013 revenue filed appeal before the Commissioner(Appeals) only on the issue of unjust enrichment, which was allowed by the Commissioner(Appeals). Aggrieved by the Commissioner (Appeals) order, the appellant is before me.

3. Shri. Sachin Chitnis, Ld. Counsel for the appellant submits that unjust enrichment is not applicable in the present case as their refund arises due to the excess payment of duty under compound levy scheme. He relied upon the decision in the case of Hans Steel Rolling Mills Vs. Commissioner of C. Ex. Chandigarh [2011(265) E.L.T.321(S.C.)] He submits that compound levy scheme being comprehensive scheme Honble High Court held that provisions of Section 11A is not applicable. It is his submission that following the ratio of the Honble High Court judgments, provisions of unjust enrichment as provided under Section 11B also not applicable therefore original authority has rightly held that refund of duty was under compound levy scheme, provisions of unjust enrichment is not applicable. He further submits that three opportunities for personal hearing was granted as per the Commissioner(Appeals) order however letter/notice for personal hearing dated 18/3/2014 was not received by the appellant and the hearing notice 9/4/2014 and 5/5/2014 for the date of hearing 28/4/2014 and 12/5/2014 were received to the appellant on 7/5/2014 and 17/5/2014 respectively thereafter the date of hearing therefore appellant could not represent their defence before the Commissioner (Appeals), order was passed exparte. He submits that if matter is remanded, if at all unjust enrichment is applicable they will submit the evidence to prove that incidence of refund amount has not been passed on to any other person.

4. On the other hand, Shri. H.M. Dixit, Ld. Asstt. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that issue whether unjust enrichment is applicable in case of refund of duty paid under compound levy scheme has been settled by the Larger Bench of this Tribunal in the case of Shivagrico Implements Ltd. Vs. CCE, Jaipur[2006(199) ELT 44(Tri-LB)].

5. I have carefully considered the submissions made by both the sides and perused the record.

6. As regard the applicability of unjust enrichment following the ratio of the Larger Bench decision in the case of Shivagrico Implements Ltd.(supra) , I am of the considered view that unjust enrichment is applicable even in case of refund of duty paid under compound levy scheme. From Section 11B also it can be seen that Section 11B covers refund of any duty of excise therefore duty paid under compound levy scheme is also governed by the Section 11B of Central Excise Act, 1944. As regard Ld. Counsels submission that the order was passed exparte, I find force in his argument and found that either hearing notice was not received by the appellant or it was delivered after the date of hearing. In view of this position, it is fit case for remand. I therefore remand the matter to the original adjudicating authority who shall disposed of the matter within a period of three months from the date of receipt of this order. Appellant has to produce necessary documents/evidence to prove that incidence of refund amount has not been passed on to any other person. Needless to say that adjudicating authority shall grant personal hearing with sufficient advance notice to the appellant. The appeal is remanded in above terms. Stay application is also disposed of.

(Operative part pronounced in court)

Ramesh Nair Member (Judicial)

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