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2024 (6) TMI 1417 - AT - Central ExcisePrinciples of unjust enrichment - time limitation - Refund of Education Cess (EC) and Secondary and Higher Education Cess (SHEC) paid on Oil Industry Development Cess (OIDC) - appellant has not submitted its financial records such as balance sheet, trial balance etc. to prove that they have borne the burden of EC and SHEC on OID Cess - difference of opinion - matter referred to the Third Member - majority order. Whether a claim for refund of Central Excise Duty paid under a mistake of law by the appellant will have to be filed under section 11B of the Central Excise Act, 1944 and are subject to the provisions including the time limit stated there under as per the law declared by the Hon ble Supreme Court in its judgment of Mafatlal Industries Ltd. Vs. UOL 1996 (12) TMI 50 - SUPREME COURT and the Larger Bench decision of this Tribunal in Veer Overseas Ltd. Vs. CCE, Panchkula 2018 (4) TMI 910 - CESTAT CHANDIGARH , whereby the refund claim filed by the appellant is time barred. HELD THAT - Aanalysis of the relevant provisions of the OIDC Act, 1974, it is clear that the cess has been collected as duties of excise and the provisions of Central Excises and Salt Act, 1944 and the rules made thereunder; particularly the provisions relating to refunds and exemptions from duties have been made applicable. Also, the EC and SHEC levied under the relevant provisions specifically refers to provisions of the Central Excise Act, 1944 relating to refunds, exemptions and imposition of penalty etc. for its administration. The appellant had discharged EC and SHEC on Oil cess, considering it as duties of excise. Subsequently, applying the circular dated 07.01.2014 issued by the Board, wherein it is clarified that EC and SHEC be payable only on the cess which is administered and collected by Ministry of Financs it is realized by the Appellant that OIDC being administered by the Ministry of Petroleum and only collected by the Ministry of Finance; EC and SHEC are accordingly not payable. Thus, admittedly all these years, the EC and SHEC has been assessed and paid on the OIDC, considering the same as an excise duty under the relevant provisions of the CEA, 1944. The viries or its leviability on the said excise duty(Oil cess) has not been challenged by the Appellant nor the same has been declared as ultra vires levy by any High Court or Supreme court. It is noted that to ascertain the correctness of certain decisions of the Apex Court, concept of unjust enrichment, interpretation of Article 265 of the Constitution of India and the provisions of the Central Excises and Salt Act, 1944 and the Customs Act and the reference by a Division Bench doubting the judgment of the correctness of the 5 Judges Bench in the case of Sales Tax Officer, Benaras ors. Vs. Kanhaiyalal Mukundlal Saraf 1958 (9) TMI 57 - SUPREME COURT (LB) , the matters have been placed before the nine Judges Bench. The EC and SHEC paid by the appellant which by way of misinterpretation of its applicability to Oil cess being administered by Ministry of Petroleum and not by Ministry of Finance(Department of Revenue) be considered as a payment of duty collected initially with authorities of law by a mis-interpretation of relevant provisions of Oil Industry (Development)Act, 1974 read with provisions of Central Excises Act, but later discovered to be not a levy authorised by law. Therefore, there are no hesitation to say that the principle laid down by the Hon ble Supreme Court at clause (I) of the para 99 is squarely applicable to the facts of the present case. Applicability of the judgment of the Hon ble Gujarat High Court in the case of Joshi Technologies International INC-India Projects Vs. UOI 2016 (6) TMI 773 - GUJARAT HIGH COURT which has been later followed by the jurisdictional High Court of Madras in the case of 3E Infotech Vs. CESTAT, CCE(Appeals-I) 2018 (7) TMI 276 - MADRAS HIGH COURT - HELD THAT - While laying down the principle of refund of illegal levy, Hon ble Supreme Court categorically held that the necessity of pursuing statutory remedy in filing refund claim under the relevant enactment, will not be applicable when a petition has been filed under Article 226 before the Hon'ble High Court or Article 32 before the Hon'ble Supreme Court. In other words, the High Courts or the Hon'ble Supreme Court can consider refund of an illegal levy beyond the provisions of Section 11B of Central Excise Act, in exercise of its extraordinary jurisdiction conferred under Art. 226 or Art.32 of the Constitution, as the case may be. (i) the refund claim of EC and SHEC paid on OID cess, being an illegal levy is governed by the principle laid down in para 99(i) of the judgment of the Hon'ble Apex Court in Mafatlal Industries Ltd. s case and the Larger Bench judgment in Veer Overseas Ltd. s case; accordingly the claim have to be filed under Section 11B of the Central Excise Act, 1944 and governed by the said provisions prescribed thereunder. (i) On the second question, the judgment delivered by Hon'ble High Courts in Joshi Technologies case in exercise of Jurisdiction under Article 226 followed in 3E Infotec s case cannot be applied by the departmental authorities and Tribunal in case of refund of illegal levy in view of the principle of law laid down by the Larger Bench of Tribunal in Veer Overseas Ltd. s case. Majority order - The Third Member has agreed with the view of Member (Technical) that the refund claim is time barred. In view thereof, the impugned order is upheld. The appeal is dismissed.
Issues Involved:
1. Eligibility for refund of Education Cess (EC) and Secondary and Higher Education Cess (SHEC) paid on Oil Industry Development Cess (OIDC). 2. Applicability of the doctrine of unjust enrichment. 3. Whether the refund claim is barred by limitation under Section 11B of the Central Excise Act, 1944. Issue-wise Analysis: 1. Eligibility for Refund: The appellants, engaged in the exploration and production of crude oil, paid EC and SHEC on OIDC, which was collected as excise duty under the Oil Industry (Development) Act, 1974. They later filed for a refund, arguing that these cesses were not applicable to OIDC as per a CBEC circular dated 07.01.2014, which clarified that EC and SHEC should only be levied on duties both levied and collected by the Department of Revenue. The Tribunal examined whether the payment of EC and SHEC on OIDC was a mistake of law and if the refund claim was valid. 2. Doctrine of Unjust Enrichment: The appellant contended that they had borne the burden of EC and SHEC and had not passed it on to their buyer, CPCL. They provided documentary evidence, including agreements, certificates from CPCL, and chartered accountant certifications, to support their claim. The Tribunal assessed whether these documents sufficiently proved that the burden was not passed on, thus negating the doctrine of unjust enrichment. 3. Limitation under Section 11B: The refund claim was initially rejected on the grounds of being time-barred under Section 11B of the Central Excise Act, 1944. The appellant argued that the limitation should not apply as the payment was made under a mistake of law. They relied on various High Court judgments, including 3E Infotech and Joshi Technologies, which held that when tax is paid under a mistake of law, the limitation under Section 11B does not apply. However, the Tribunal referred to the Supreme Court's decision in Mafatlal Industries, which mandates that all refund claims (except those involving unconstitutional levies) must be filed under the provisions of the respective enactment, adhering to its limitation period. Decisions: - Member (Judicial): Held that the refund claim should not be barred by limitation as it was paid under a mistake of law, following the judgments of the High Courts in 3E Infotech and Joshi Technologies. - Member (Technical): Disagreed, citing the Supreme Court's decision in Mafatlal Industries, asserting that the refund claim must comply with the statutory time limit under Section 11B of the Central Excise Act, 1944. - Third Member (Judicial): Concurred with the Member (Technical), emphasizing that the refund claim, being an 'illegal levy,' must be filed under Section 11B and is subject to its limitation provisions. Conclusion: The majority decision upheld the view that the refund claim is time-barred under Section 11B of the Central Excise Act, 1944. Consequently, the appeal was dismissed, affirming that the statutory time limit is applicable, and the refund cannot be sanctioned outside the provisions of the Act.
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