2023 (12) TMI 250 - AT - Central Excise

Principles of natural justice - opportunity had not been accorded to the appellant by the first appellate authority for being heard - refund of duty paid under protest - HELD THAT - It is found from the impugned order that the issue of limitation has been dealt with in terms of rule 233B of Central Excise Rules, 1944 which came into force only from 11th May 1981. Consequently, and in the absence of any mechanism prescribing for protest , the presumption in the adjudication order of failure to protest is not tenable. The appellant claims that protest had been filed with the department by mail, under certificate of posting ; that has not been denied. The first appellate authority has taken upon itself to infer that, with certain eventualities not occurring, presumption of not paid duty under protest was to be operated as default - it is found from the decision of the Hon ble Supreme Court, in BHOR INDUSTRIES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE 1989 (1) TMI 128 - SUPREME COURT , that classification list came to be filed for the first time in November 1975. At the same time, in the same judgment, it has been noted that the classification list had been approved by the competent authority in December 1977 before which, in a separate dispute, the first appellate authority in order of June 1974 had held the goods not liable to excise duty. Notwithstanding the lapse of time since the dispute on excisability was taken up and concluded and its appearance before the the Tribunal for the third time, a fresh decision cannot be directed after taking the submission on facts, as well as certificate of the Chartered Accountant, into account - matter remanded back to the first appellate authority on the terms and conditions directed by the Tribunal formerly and subject to the law as judicially determined.

Summary

Issues Involved:
1. Violation of principles of natural justice.
2. Examination of Chartered Accountant's certificate and factum of 'no sale'.
3. Adherence to the terms of remand.
4. Applicability of 'unjust enrichment' and statutory presumption.
5. Limitation and 'protest' under rule 233B of Central Excise Rules, 1944.

Summary:

1. Violation of Principles of Natural Justice:
The Tribunal observed that the previous remand order dated 7th June 2012 was based on the ground that the first appellate authority did not provide an opportunity for the appellant to be heard, which violated the principles of natural justice. Consequently, the impugned order was set aside and the matter was remanded to the Commissioner (Appeals) for fresh adjudication.

2. Examination of Chartered Accountant's Certificate and Factum of 'No Sale':
The Tribunal noted that the lower appellate authority had wrongly rejected the appellant's refund claims on the presumption that the duty burden was passed on to customers, without considering the Chartered Accountant's certificate. The Tribunal remanded the case, directing the Commissioner (Appeals) to consider the certificate and the fact that no sale had occurred, thereby questioning the shifting of the incidence of duty.

3. Adherence to the Terms of Remand:
The Tribunal emphasized that the Commissioner of Central Excise (Appeals) must adhere to the terms of the remand, which included examining the Chartered Accountant's certificate and the factual position regarding the non-occurrence of sales. The Tribunal found that the lower authorities had failed to comply with these directions.

4. Applicability of 'Unjust Enrichment' and Statutory Presumption:
The Tribunal discussed the statutory presumption under section 11B of the Central Excise Act, 1944, and the concept of 'unjust enrichment'. The Tribunal referred to various judicial precedents, including decisions of the Hon'ble Supreme Court and High Courts, which clarified that the principle of unjust enrichment would not apply to refunds pertaining to periods before specific amendments and rules came into effect.

5. Limitation and 'Protest' under Rule 233B of Central Excise Rules, 1944:
The Tribunal found that the first appellate authority's reliance on rule 233B, which came into force from 11th May 1981, to reject the refund claim was not tenable. The Tribunal noted that the appellant's claim of having filed a 'protest' with the department by mail had not been denied. The Tribunal also highlighted the need to ascertain the context in which the appellant paid duties for the period prior to December 1975, despite favorable rulings.

Conclusion:
The Tribunal set aside the impugned order and remanded the matter back to the first appellate authority for a fresh decision, taking into account the submissions on facts and the Chartered Accountant's certificate, in accordance with the terms and conditions directed by the Tribunal and subject to the law as judicially determined.