2017 (8) TMI 891 - AT - Central Excise

Benefit of N/N. 108/95-CE(NT) dated 28/08/1995 - denial on the ground that the seller of HSD i.e. Indian Oil has not made sales to the United Nations project, therefore respondents should not be allowed to avail the benefit - Held that - even though IOCL is not entitled for the refund claim, the ultimate user have been using it for United Nations Project or World Bank Project and was not debarred to take benefit under N/N. 108/95-CE(NT) dated 28/08/1995 as amended - reliance was placed on the ruling of Hon ble High Court of Bombay in the case of Jai Bhagwati Impex Pvt. Ltd. Versus union of India 2002 (6) TMI 46 - HIGH COURT BOMBAY . Further, as regards the availability of refund claim of additional Excise duty paid on the HSD, in case of exemption under Notification No.108/95, no distinction has been made for additional Excise duty on HSD in terms of Section 133 of the Finance Act, 1999. The respondents are entitled to the benefit of refund (including on Additional Excise duty) - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Challenge to refund claim under Notification No.108/95-CE(NT) dated 28/08/1995 by Revenue.
2. Entitlement of respondents to benefit under the notification.
3. Unjust enrichment and burden of proof.
4. Availability of refund claim for additional Excise duty on HSD.

Analysis:
1. The Revenue contested the refund claim allowed to the respondents under Notification No.108/95-CE(NT) dated 28/08/1995 by the Commissioner (Appeals). The main contention was that the seller of High-Speed Diesel (HSD), Indian Oil, did not make sales to the United Nations project, questioning the entitlement of the respondents to the benefit of the notification based on their claim of supplying HSD for the project.

2. The respondents, despite being absent, provided detailed documentation supporting their claim for exemption under the notification. They argued that even though Indian Oil did not qualify for the refund claim, they, as the ultimate users for United Nations and World Bank projects, were eligible. The respondents, PNC Construction Co. Ltd. and NCC-PNC (JV), presented contracts and project certificates to substantiate their usage of HSD for specific projects, complying with the conditions of the notification.

3. The issue of unjust enrichment was raised concerning the burden of proof on the respondents to demonstrate that the duty burden had not been passed on. The Adjudicating Authority highlighted the necessity for the respondents to prove the absence of unjust enrichment, emphasizing the submission of balance-sheets and relevant financial documents. The Commissioner (Appeals) found that the respondents had met this requirement by providing affidavits, certificates from the Managing Director and Chartered Accountant, and evidence of outstanding refund claims in their financial records.

4. Regarding the availability of refund for additional Excise duty on HSD, the Commissioner (Appeals) analyzed the provisions of Notification No.108/95-CE(NT) dated 28/08/1995, which exempted additional Excise duty leviable under the Finance Act. The judgment clarified that no distinction was made for additional Excise duty on HSD under Section 133 of the Finance Act, 1999, ensuring that the respondents were entitled to the benefit of the refund, including on additional Excise duty, as per the notification.

In conclusion, the Tribunal upheld the entitlement of the respondents to the refund claim under Notification No.108/95-CE(NT) dated 28/08/1995, directing the Adjudicating Authority to process the refund within a specified timeline, along with applicable interest.