Full Judgment
Following Gujarat HC decision in CCE v. Medico Labs -2004 (173) E.L.T. 117, we find no merits in this appeal & it is to be rejected.
We also find that subsequent to the remand in this case, the lower authority vide order dated 16-8-2004 has passed an order classifying the tapes manufactured by the assessee under Chapter 39.
(b) Appeal E/1198/05 & E/S/998/05 therein are filed by the Revenue against an order dated 18-1-2005 by CCE(A) in an appeal filed by the assessee against the order dated 16-8-2004 of Asstt. Commissioner vide the remand, as mentioned in E/1596/03 supra. Revenue has taken the grounds - (i) HDPE sacks are exempt & tapes used in the manufacture of such sacks have to discharge duty under Chapter 39 and since duty of Rs. 25,12,218 originally paid on HDPE tapes could be granted as refund, subject to unjust enrichment bar. This amount cannot be enhanced due to remand on the Tribunal dated 29-6-2000 which was only on order of unjust enrichment. Therefore, reworking the duty on the basis of duty payable on the exempted goods is not proper.
(ii) Duty on tapes of Rs. 25,12,218/- was not refundable as they were captivity consumed.
(iii) Considering the sale price of HDPE sacks as cum-duty is not correct & if so, then duty is deemed to have been collected.
(iv) Allowing duty at Tape Stage for 1-4-91 to 25-5-92 is not proper as once this duty is paid this credit would not be available as HDPE sacks are exempt only if made and of Chapter 3901 to 3915 goods if credit on them was not availed.
(vi) Order on interest not called for as there was no proviso during the clearance period (1989-90 to 25-5-92) of interest under Section 11BB (c) On considering that tapes are an intermediate goods & credit on raw material which go to make tape would be available, if tapes are to discharge duty at tape stage & then, such tape duty, if not taken credit, would entitle benefit of Notification 53/88 to sacks. The duty demands on sacks would be upheld if tapes do not discharge duty. The refund of duty on sacks would therefore be dependent upon the position of duty discharge on tapes. The entire issues is now to be reworked, since the classification of tapes under 39 is now not open & not to be disturbed. For this purpose, the appeal is allowed as remand to the original authority to redetermine the refunds on sacks, if any & the unjust enrichment bar, after working out the demands & actual discharge of duty on tapes. The issue of claim of in-test to be determined after that. Needless to add the assessee has to be heard on these issues.