Vardhman Spinning & General Mills vs C.C.E., Ludhiana

(Arising out of OIA No.419/CE/CHD/06 dt.19.5.2006 passed by Commissioner of Central Excise (Appeals) Chandigarh)

Vardhman Spinning & General Mills Appellants

Vs.

C.C.E., Ludhiana Respondent

Appearance:

Present for the Appellant: Shri Rupender Singh, Advocate

Present for the Respondent: Shri V.P.Batra, AR

Honble Mr.P.K.Das, Member (Judicial)

Honble Mr.P.S.Pruthi, Member (Technical)

1.

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

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No

3. Whether their Lordships wish to see the fair copy of the order?

seen

4. Whether order is to be circulated to the Department Authorities?

Yes

Coram: Honble Mr. P.K.Das, Member (Judicial)

Honble Mr.P.S.Pruthi, Member(Technical)

Date of Hearing/decision: 19.01.2015

FINAL ORDER NO.50209/2015

PER: P.S.PRUTHI

This appeal is directed against the Order of the Commissioner (Appeals), who allowed refund claim of the appellant but ordered amount to be credited to the Consumer Welfare Fund under Section 11B(2) of Central Excise Act, 1944.

2. The facts of the case are summarized briefly in the order of the Commissioner (Appeals) as below:

I observe that the Dyed Yarn (Daffodil) was cleared on payment of Central Excise duty amounting to Rs.27,02,644/- at the specific rate. Out of the total duty of Rs.2,39,24,444/-payable by the noticee Rs.27,02,644/-was paid in cash and Rs.2,12,21,800/- was adjusted against the cenvat credit of Rs.2,23,23,143/-available to them as per orders of the Commissioner of Central Excise Commissionerate. Ludhiana vide his Order-in-Original No.283/Ldh/03 dated 23.12.03. The noticee in reply to the Show Cause Notice has submitted at para13 that We are claiming refund of duty amounting to Rs.11,01,343/- out of this unavailed cenvat credit only and not from the duty passed on to the Customers at the time of clearance of daffodil yarn.  I observe that the cenvat credit has been allowed by the Commissioner, Central Excise, Ludhiana vide the above referred Order-in-Original. The noticee is free to avail the credit of duty amounting to Rs.11,01,343/-. I therefore, do not interfere with the orders passed by the Commissioner and allow the noticee an amount of Rs.11,01,343/- through cenvat credit.

3. In their appeal, the appellants relied on the various judgements such as Gujarat State Fertilizers & Chem. Ltd. Vs. CCE, Vadodara-2005 (186) ELT 607 (Tri.-Mum.) to justify that when the duty is paid subsequently on clearance of goods, principle of unjust enrichment is not applicable.

4. Heard both sides.

5. Learned AR appearing on behalf of the Revenue reiterated the findings of the Commissioner (Appeals). He also stated that subsequent judgments have held that, even in case of utilization of cenvat credit after clearance of disputed goods, unjust enrichment principle will apply.

6. We have considered the rival contentions. We find in this case that cenvat credit which was adjusted against the confirmed duty demand was in excess of the amount which was required to be adjusted towards payment of duty. We further find that the appellant is simply seeking restoration of credit which had been adjusted in excess. In the facts and circumstances of the case, we are of the view that restoration of cenvat credit in the account of the appellant will only restore the position to the extent of credit which was not required to be adjusted. Thus, when viewed from the angle of continuous utilization of credit, we find that unjust enrichment is not invokable. We hold that the appellant is entitled to the restoration of credit of Rs. 11,01,343/- in its account.

7. The appeal is disposed in the above terms.

(Pronounced in the court)

(P.S.PRUTHI) (P.K.DAS)

MEMBER (TECHNICAL) MEMBER(JUDICIAL)

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