Supreme Court set aside the Tribunal’s order

1. International conveyors Ltd manufactured PVC Coal Conveyor Belting made from imported Nylon Yarn.

2. There was some issue with regard to imposition of duty on import of Nylon Yarn, which was later resolved in favour of the appellant.

3. The appellant filed a refund claim.

4. The High Court allowed appellant’s writ petition directing the Revenue to make refund along with the interest.

5. Subsequently, ACCE issued a show cause notice as to why the application claiming refund should not be rejected on the ground of unjust enrichment as the amount of tax was alleged to have been recovered by the appellant from two companies to whom the goods had been supplied by the appellant.

6. Deputy Collector, CEC, passed a refund order subject to the appellant giving an undertaking to pay the money back, if the Supreme Court decided in the Department’s favour in another pending matter.

7. The appellant gave an undertaking.

8. The Supreme Court decided in the department’s favour in the pending matter.

On appeal, the Supreme Court held as under:

9. In our opinion, the aforestated judgment is not at all relevant so far as the appellants case is concerned.

10. The amount of duty paid by the appellant had never been passed over to the purchasers and the said fact has been duly recorded by the Deputy Collector, Central Excise and Customs, Aurangabad in his order dated 5th April, 1995

11. We fail to understand as to how the judgment delivered in U.O.I. Vs. M/s. Solar Pesticides Pvt. Ltd. (supra) is applicable to the case of the appellant.

12. Neither this is a case of captive consumption nor is a case of unjust enrichment.

13. For the aforesaid reasons, we quash and set aside the impugned order passed by the Tribunal dated 6th September, 2004.

Case Reference - International Conveyors Ltd vs Commnr. Of Central Excise & Customs.

Supreme Court of India