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2017 (5) TMI 143 - AT - Central ExciseRefund claim - Higher Education Cess and the Secondary & Higher Secondary Cess paid on tea cess for the period 2004 to 2014 - rejection on the ground of Time bar and unjust enrichment - Held that - the present case is squarely covered by the decision of the Hon ble Gujarat High Court in the case of Joshi Technologies International v. UOI 2016 (6) TMI 773 - GUJARAT HIGH COURT , where the the petitioner was paying Cess on the clearance of Petroleum/crude oil under the provisions of OIL Industry (Development) Act, 1974. It was held in the case that Crude Oil Cess is not in the nature of excise duty and consequently, the Education Cess and Secondary and Higher Secondary Education Cess computed thereon, also does not bear the character of a duty of excise, but is merely an amount paid under a mistake of law. As a necessary corollary, it follows that the provisions of the Central Excise Act, 1944 would not be applicable for refund of such amount paid by mistake. Moreover, since there was no liability to pay Education Cess and Secondary and Higher Secondary Education Cess, the provisions of the Central Excise Act as incorporated in the OIC Act would also not apply to the amount paid by mistake. Refund allowed - appeal allowed - decided in favor of assessee.
Issues Involved:
1. Whether the refund claims for Higher Education Cess and Secondary & Higher Secondary Cess paid on tea cess from 2004 to 2014 are time-barred. 2. Whether the refund claims are hit by the principle of unjust enrichment under Section 11B of the Central Excise Act, 1944. Detailed Analysis: 1. Time-Barred Refund Claims: - The appellants filed refund claims based on the Central Board of Excise & Customs Circular No. 978/2/2014-CX dated 07.01.2014, which clarified that Education Cess and Secondary & Higher Education Cess should not be calculated on cesses levied under acts administered by departments other than the Ministry of Finance. - The authorities below rejected the refund claims as time-barred, stating that claims filed beyond one year are hit by Section 11B of the Central Excise Act, 1944. - Specifically, M/s. Addabarie Tea Estate filed a refund claim for ?1,23,882/- for the period from April 2004 to March 2014. A Show Cause Notice was issued proposing rejection of the claim on grounds of time limitation and unjust enrichment. - The Assistant Commissioner sanctioned a partial refund of ?17,394/- for the period from 31.08.2013 to 31.03.2014, crediting it to the Consumer Welfare Fund and rejecting the balance as time-barred. - The Commissioner (Appeals) upheld this decision, despite the appellant’s Chartered Accountant Certificate certifying that the duty element had not been passed on to buyers. 2. Principle of Unjust Enrichment: - The appellants argued that their refund claims should not be affected by the principle of unjust enrichment, supported by the Gujarat High Court decision in Joshi Technologies International v. UOI. - In Joshi Technologies, the court held that the provisions of Section 11B of the Central Excise Act, 1944, do not apply to claims for amounts paid under a mistake of law. The limitation period for such claims begins when the mistake is discovered. - The court also found that the retention of Education Cess and Secondary & Higher Secondary Education Cess without authority of law is unjust. - The Tribunal noted that similar facts and legal provisions applied in the present case, aligning with the Joshi Technologies decision. Relevant Judgments and Legal Precedents: - The Tribunal cited several cases supporting the non-applicability of Section 11B in cases of mistaken payments, including Jubilant Enterprises Pvt. Ltd. v. CCE, Mumbai-I, and CCE, Pune-III v. Shankar Ramchandra Auctioneers. - The Tribunal referenced the Karnataka High Court decision in CCE(Appeals), Bangalore v. KVR Construction, which held that service tax paid mistakenly could not be rejected on limitation grounds under Section 11B. - The Tribunal also mentioned the Division Bench decision in M/s. Monnet International Ltd. & Another vs. CCE, New Delhi, which allowed refunds for amounts deposited without authority of law, emphasizing that Section 11B does not apply to such cases. Conclusion: - The Tribunal concluded that the present case is squarely covered by the Gujarat High Court decision in Joshi Technologies International v. UOI. - The Tribunal found that the refund claims are not time-barred under Section 11B of the Central Excise Act, 1944, as the amounts were paid under a mistake of law. - The Tribunal allowed the appeals filed by the appellants with consequential relief, directing the jurisdictional Commissioner to return the deposited amounts. Order Pronounced: - The appeals filed by the appellants are allowed with consequential relief, as pronounced in the open court on 24.04.2017.
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