Universal Heat Exchangers Ltd vs Commissioner Of Central Excise

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI

Appeal No.E/1313/2004

[Arising out of Order-in-Appeal No.235/2004-CE dt. 8.7.2004 passed by the Commissioner of Central Excise (Appeals), Coimbatore]

Universal Heat Exchangers Ltd. Appellant

Versus

Commissioner of Central Excise, Coimbatore Respondent

Appearance:

Shri S.Kandaswamy, Consultant For the Appellant

Shri R. Subramaniyan, AC (AR) For the Respondent

CORAM :

Honble Shri R. Periasami, Technical Member Honble Shri P.K. Choudhary, Judicial Member

Date of Hearing/Decision : 26.5.2015

FINAL ORDER No.___________

Per R. Periasami

Appellant filed appeal against the impugned order dt. 8.7.2004 passed by Commissioner (Appeals).

2. The short issue in this appeal is that appellants claimed refund of Rs.80,858/- of amount paid on account of the internal audit objection on the excisable goods cleared to M/s.BEML and M/s.National Aero Space Laboratory (NAL, for short) at NIL rate under Notification No.10/97-CE dt. 1.3.97. The adjudicating authority rejected the refund of Rs.43,737/- claimed by the appellants in respect of goods cleared to M/s.NAL by denying the exemption notification. However, he sanctioned refund of Rs.37,121/- of duty paid on the goods cleared to M/s.BEML but credited to the Consumer Welfare Fund under unjust enrichment clause. The order was upheld by the Commissioner (Appeals).

2. Ld. Consultant submits that they have manufactured and supplied heat exchangers and oil coolers to M/s.BEML, Mysore and M/s.NAL, Bangalore at Nil rate under Exemption Notification No.10/97. He submits that they have correctly claimed the exemption benefit of Notification. For the goods cleared to M/s.NAL, he produced the copy of certificate dt. 8.2.2002, issued by the Senior Deputy Secretary, NAL and they are covered under condition No.8 as NAL is a public funded institution under the direct administrative control of the Department of Space.

3. Regarding bar of unjust enrichment of refund of Rs.37,121/-, he submits that the amount was paid at the instance of audit objection when the Audit Team visited their unit from their own account and it is only a deposit and unjust enrichment clause not applicable. He relied on the following citations :

(i) CCE Pune Vs Rocket Engg. Corporation Ltd. 2014 (306) ELT 33 (Bom.)

(ii) CC Vs mahalaxmi Exports 2010 (258) ELT 217 (Guj.)

(iii) CCE Chandigarh Vs Modi Oil & General Mills 2007 (210) ELT 342 (P&H)

(iv) CCE Visakhapatnam Vs Sagar Cements 2008 (223) ELT 433 (Tri.-Bang.)

4. On the other hand, Ld. AR reiterated the Order-in-Appeal. He particularly refers to para 4.3 of the order wherein it is stated that the certificate produced by appellant is not signed by Head of Institution as required under the notification but it was issued by the Senior Controller of Administration/Sr. Deputy Secretary. He further submits that registration number quoted in the certificate as registered under the Ministry of Science & Technology, Department of Scientific & Industrial Research is not figuring as one of the institution in the notification. He submits that they are not covered under category (a) but under category (b) of the condition of the notification.

5. Heard both sides. We find that the adjudicating authority in his order partly sanctioned the refund and held that they are eligible for the exemption notification No.10/97-CE dt. 1.3.97 in respect of goods cleared to M/s/BEML but credited same to the Consumer Welfare Fund on the ground that appellants have not produced any evidence that incidence of duty was not passed on to M/s.BEML. We find that there is no dispute on the fact that appellants have supplied the goods to BEML under the said notification and the adjudicating authority and the appellate authority have upheld the eligibility of exemption benefit and granted refund. We find that the appellants availed the exemption under the said notification and cleared the goods and it was only during audit verification that the objection was raised on the admissibility of the notification and the appellant had paid the amount. Therefore, the amount deposited on account of audit objection certainly to be considered a deposit only and the question of unjust enrichment does not arise in this case. The Tribunal's decision relied in the case of CCE Pune Vs Rocket Engg. Corporation Ltd. (supra) clearly supports the case. Accordingly, we hold that the appellants are eligible for refund.

6. As regards the denial of refund of amount paid in respect of clearance of goods to M/s.NAL, we find the adjudicating authority has rejected the refund claim by denying the said exemption notification. On perusal of the certificate issued by NAL, it is evident that it is duly signed by the Senior Controller of Administration/Sr. Deputy Secretary and M/s.NAL is directly under the administrative control of Department of Space. Therefore, NAL correctly falls under the public funded research institution under category (a) of the condition of the notification. The certificate is duly signed by an officer at the rank of Senior Deputy Secretary and it clearly confirms that the goods were supplied for R&D purpose. The LAA denied the notification on the ground that said certificate is not signed by the Head of Institution as per category (b) of the condition of notification whereas we find that the appellants are covered under condition (a) of the notification itself as the NAL is a Govt institution and functioning under the Administrative Control of Department of Space and the certificate is duly signed by the Deputy Secretary. Only in the case of category (b), of condition the certificate should be issued by the Head of Institution. Therefore, we hold that the appellants are eligible for full exemption under notification No.10/97 in respect of goods cleared to NAL and the duty deposited during audit is liable to be refunded. We also hold that, as discussed above, the question of unjust enrichment is not applicable. Accordingly, impugned order is set aside and the appeals are allowed with consequential relief.

(Dictated and pronounced in open court)

(P.K. CHOUDHARY) (R. PERIASAMI) JUDICIAL MEMBER TECHNICAL MEMBER gs 2