S.N. Busi, Member (T)

1. This appeal is directed against the Order-in-Appeal No. 02/Cal-III/97, dated 19-1-1998 of Commissioner of Central Excise (Appeals), Calcutta which upheld the Order-in-Original No. 109(A) of 95, dated 14-11-1995 of Assistant Commissioner of Central Excise, Barrackpore Division.

2. A question arose whether M/s. Hindustan Lever Limited could avail the benefit of Notification Nos. 24/65-C.E., dated 28-2-1965 and 259/83-C.E., dated 15-10-1983 simultaneously in respect of "Vegetable Product" falling under Item No. 13 of the erstwhile Central Excise Tariff. When the issue travelled upto the Tribunal, vide its order No. 38/89-C, dated 7-2-1989 it came to the finding that the appellants could avail of the benefit of both the said Notifications simultaneously and observed that "the correct interpretation of Notification No. 259/83 would be to calculate the deduction and give effect thereto with reference to the effective rate of duty. Such exemption would, however, be subject to the satisfaction of the conditions laid down in Notification No. 259/83". The Tribunal, accordingly, directed the Assistant Collector to examine the matter afresh and pass appropriate orders after giving the appellants an opportunity of being heard keeping in mind the legal position as recorded by the Tribunal. Pursuant to the said order of the Tribunal, the appellants filed two separate refund claims for a total amount of Rs. 6,00,132.45 covering the period 1-12-83 to 28-2-1984 (Rs. 56,328.30 for the period 1-12-1983 to 31-12-1983 and Rs. 5,43,804.15 for the period 1-1-1984 to 29-2-1984). The aforementioned two refund claims were rejected by the Assistant Commissioner vide his Order-in-Original No. 109(A) of 1995, dated 14-11-1995 on the ground of "unjust enrichment". While admitting that the refund claims appeared to be justified and were not time barred, the Assistant Commissioner observed: "Now, if the said exemption under Notification No. 259/83 be granted to them, it will cause unjust enrichment on the part of the assessee, since such benefit could not be extended to the respective customers." Accordingly, he ordered that the amounts involved in both the refund claims be credited to the Consumer Welfare Fund. Being aggrieved by the said order, the appellants preferred an appeal with Commissioner of Central Excise (Appeals), Calcutta which was rejected. Hence, this appeal before us.

3. Shri Anoop Bose, learned Advocate appearing for the appellants, assails the impugned order on the ground that Commissioner (Appeals) has failed to appreciate that Assistant Commissioner had rejected the refund claims solely on the ground of "unjust enrichment" which was not raised at the time of personal hearing but only after the personal hearing had taken place and as such Commisioner (Appeals) failed to take cognizance of the fact that the adjudicating authority had committed a manifest error of law by introducing a ground which the appellants had no opportunity whatsoever of rebutting at the time of personal hearing and no Show Cause Notice in that behalf was issued to the appellants before such personal hearing. The learned Advocate argues that it is well settled that an order passed in violation of the principles of natural justice is a nullity and the null and void character of such order continues and follows upto the end of appeal. In this connection, he relies upon the judgments in the case of Ridge v. Baldwin - (1964) Appeal Cases 40 (House of Lords); Maneka Gandhi v. Union of India - : AIR 1978 SC 597 ; Mohinder Singh Gill v. Chief Election Commisioner - : AIR 1978 SC 851 ; Union Carbide Corporation v. Union of India - : AIR 1992 SC 248 ; N.M. Wood Private Limited v. Superintendent of Central Excise - 1981 (8) E.L.T. 184 (Mad.); Rungta Sons (P) Ltd. v. Collector of Customs, Visakhapatnam -1986 (23) E.L.T. 14 (Cal.); Mahindra & Mahindra Ltd. v. U.O.I. -1991 (51) E.L.T. 219 (Bom.); Kiran Spinning Mills v. C.C.E. -1987 (30) E.L.T. 550 (CEGAT); and Asapcs (India) Pvt. Ltd. v. C.C.E - 1984 (18) E.L.T. 3 (CEGAT). The learned Advocate further argues that it is well settled that an assessee cannot be denied the benefit of an exemption Notification once the assessee has complied with the mandatory condition of such notification. He contends that the rebate allowed to manufacturers in terms of the second Notification is in the nature of an incentive for use of more oils such as Rice bran oil and accordingly, the refund claims could not have been denied on the mere plea of "unjust enrichment". He further contends that since differential rebates claimed in terms of the second Notification were not availed of on the goods cleared from the factory, the question of passing on the duty incidence to customers could not have arisen warranting the bar of unjust enrichment. He argues that the second Notification does not stipulate that the benefit of the exemption shall be extended to customers. According to him, the benefit of the rebate has been specifically and exclusively resumed for the manufacturer of such goods as it is in the nature of an incentive to encourage the manufacturer to use the specified oils in the manufacture of the concerned goods. He, therefore, pleads that the interpretation of the Assistant Commiossioner in this regard would defeat the very purpose of the second Notification and would render it nugatory, which is not permissible. In support of this plea, he relies upon the decisions/ judgements in the case of the Central India Spinning & Weaving & Manufacturing Company Ltd., The Empress Mills, Nagpur v. The Municipal Committee, Wardha - : AIR 1958 SC 341 ; C.C.E. v. Park Exports (P) Ltd. -1988 (38) E.L.T.-741 (S.C.); Swadeshi Polytex Ltd. v. C.C.E. - 1989 (44) E.L.T. 794; C.C., Bombay v. United Electrical Industries Ltd. -1999 (108) E.L.T. 609 (S.C.); Mangalore Chemicals & Fertilizers Ltd. v. Deputy Commissioner - 1991 (55) E.L.T. 437 (S.C.); Punjab Rubber & Allied Industries v. Union of India -1983 (12) E.L.T. 54 (P & H); P.K. Nimel v. Assistant Collector of Central Excise -1988 (36) E.L.T. 482 (Kerala); Alembic Glass Industries Ltd. v. U.O.I., 1992 (59) E.L.T. 207 (Guj); Akbar Badruddin Jiwani v. C.C. - 1990 (48) E.L.T. 441 (CEGAT); TTK Pharma Ltd. v. C.C.E. - 1993 (63) E.L.T. 446 (CEGAT) and C.C.E., Calcutta-I & II v. Black Diamond Beverages Ltd. - 1998 (103) E.L.T. 655 (CEGAT). The learned Advocate argues that when any amount of money is paid by an assessee due to mistake of law which is not payable as tax or duty and which amount is not leviable or cannot be collected as tax/duty, the Government has no authority to retain the said amount when the mistake is discovered. He further argues that when the levy and collection of any amount is illegal, the retention of such amount would also be illegal and contrary to the mandatory provisions of Article 265 of the Constitution of India which prohibits levy or collection of any tax except by the authority of law. He, therefore, submits that the Government is duty bound to allow the refund claims and crediting of the said amounts to the Consumer Welfare Fund would be wholly illegal and violative of the provisions of Article 265 of the Constitution of India. In this regard he relies upon the decisions/judgements in D.Cawasji & Co. v. State of Mysore - 1978 (2) E.L.T. (J 155) (S.C.); Madras Port Trust v. Himanshu International - 1979 (4) E.L.T. (J 396) (S.C.); Patel India (Pvt.) Ltd. v. Union of India -1983 (13) E.L.T. 1495 (S.C.); Commisioner of Sales Tax, UP v. Auriaya Chamber of Commerce -1986 (25) E.L.T. 867 (S.C.); Mafatlal Industries Ltd. v. Union of India -1997 (89) E.L.T. 247 (S.C.); Autometers Limited v. Union of India - 1987 (29) E.L.T. 3 (Del.); Ashoka Industries v. UOI -1988 (38) E.L.T. 3 (Cal.); BTX Chemicals Pvt. Ltd. v. C.C.E -1989 (41) E.L.T. 377 (Bom.) and Tube Products of India v. Union of India -1989 (41) E.L.T. 400 (Mad.). The learned Advocate raised another plea to the effect that as the refund claims were filed pursuant to the Tribunals Order dated 7-2-1989, well before Section 11B was amended, the unjust enrichment clause cannot be invoked against the appellants. To substantiate this plea, he takes support from the decisions in Mafatlal Industries Ltd. v. Union of India -1997 (89) E.L.T. 247 (S.C.); Dalmia Cement (Bharat) Ltd. v. Commissioner of Central Excise, Trichy -1998 (101) E.L.T. 699 (CEGAT); and India Cements Ltd. v. C.C.E., Caimbatore - 2000 (124) E.L.T. 221 (Tribunal).

4. Shri R.K. Roy, learned JDR appearing for the Revenue, reiterates the reasoning contained in the impugned order.

5. We have carefully considered the rival contentions. We find that the main grievance of the appellants is that the plea of unjust enrichment has been raised by the Department after conclusion of personal hearing and no opportunity was afforded to them to rebut the said plea in personal hearing and as such they seriously contend that the Adjudicating authority has violated the principles of natural justice. We find that while dealing with this aspect. Commissioner (Appeals) has observed: "This clearly frustrates appellants claim that natural justice was denied to them as I find reasonable/appropriate opportunity was provided to them which also they availed of by giving a detailed reply, more so, when the statute have clearly given retrospective effect." On perusal of the record, we observe that after conclusion of personal hearing on 3-8-1995, Assistant Commissioner vide his letter dated 15-9--1995 requested the appellants to submit documentary evidence to show that the duty incidence was not passed on to the customers/buyers to which the appellants sent as reply on 25-9-1995. They have also given reply on 27-9-1995 to a similar query from Superintendent (Tech.) of Barrackpore Division. On receipt of the said replies, Assistant Commisioner adjudicated the matter without giving an opportunity to the appellants to explain their case in person. We are of the view that the Adjudicating authority has undoubtedly violated the principles of natural justice. We, therefore, disagree with the above-mentioned observation of Commissioner (Appeals) in this regard. Hence, the matter is required to be remitted to the Adjudicating authority for a fresh decision. Accordingly, without expressing our opinion on the other issues raised by the appellants, we set aside the impugned order and remand the matter to the Adjudicating authority to decide the same afresh after granting personal hearing to the appellants. Needless to say that the appellants shall extend their co-operation in the de novo proceedings.

6. In the result, the appeal is allowed by way of remand.