2017 (10) TMI 794 - AT - Central Excise

Refund of Higher Education Cess paid on the amount of Cess as leviable under the Beedi s Workers Welfare Cess Act, 1976 - denial on the ground of time limitation and unjust enrichment - section 11B of the CEA, 1944 - Held that - the present case is squarely covered by the decision of the Tribunal in the case of M/s. Itakhuli Tea Estate Versus Commissioner of Central Excise & Service Tax 2017 (5) TMI 143 - CESTAT KOLKATA , where it was held 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. The provisions of the CEA, 1944 would not be applicable for refund of such amount paid by mistake - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Time Barred Refund Claims
2. Principle of Unjust Enrichment
3. Applicability of Section 11B of the Central Excise Act, 1944
4. Relevance of Board’s Circular No. 978/2/2014-CX dated 07.01.2014

Detailed Analysis:

1. Time Barred Refund Claims:
The primary issue was whether the refund claims filed by the appellants for the Higher Education Cess paid from 2004 to 2014 were time-barred according to Section 11B of the Central Excise Act, 1944. The refund claims were filed on 07.01.2015, beyond the one-year limitation period stipulated in Section 11B. The authorities below rejected the claims as time-barred, stating that claims filed beyond the one-year limit from the relevant date are not permissible.

2. Principle of Unjust Enrichment:
The authorities also rejected the refund claims based on the principle of unjust enrichment. The appellants argued that they had not passed the duty burden to the buyers, supported by a Chartered Accountant Certificate. However, the Assistant Commissioner sanctioned only a small portion of the refund (?14,978) for the period from 07.01.2014 to 20.01.2014, directing it to be credited to the consumer welfare fund, and rejected the balance amount as time-barred.

3. Applicability of Section 11B of the Central Excise Act, 1944:
The appellants contended that the refund claims were based on the Board’s Circular dated 07.01.2014, which clarified that the Higher Education Cess and the Secondary and Higher Education Cess should not be collected on cesses levied under acts administered by departments other than the Ministry of Finance. The Tribunal found that Section 11B generally governs the claim for refund of duty and interest paid on such duty. However, in cases where the tax was paid erroneously or without authority of law, Section 11B's limitation period may not apply.

4. Relevance of Board’s Circular No. 978/2/2014-CX dated 07.01.2014:
The appellants filed their refund claims based on the Board’s Circular, which clarified that the Higher Education Cess and the Secondary and Higher Education Cess should not be calculated on cesses levied under acts administered by other departments. The Tribunal noted that the present case is covered by the decision of the Tribunal in the case of M/s. Itakhuli Tea Estate & Others, where similar principles were applied, and the refund claims were allowed despite being filed beyond the one-year limitation period.

Conclusion:
The Tribunal allowed the appeals filed by the appellants, granting consequential relief. It was observed that the refund claims were not hit by the limitation period under Section 11B of the Central Excise Act, 1944, as they were based on an erroneous levy clarified by the Board’s Circular. The Tribunal emphasized that the principle of unjust enrichment was not applicable as the appellants had not passed the duty burden to the buyers. The Tribunal directed the jurisdictional Commissioner to return the deposited amount as per law.