JURISDICTION OF APPELLATE TRIBUNAL FOR IMPLEMENTATION OF ITS OWN ORDER FOR REFUND

[Mr. M. GOVINDARAJAN]

            Section 86 of the Finance Act, 1994 provides Appellate Tribunal as the second level of forum of making an appeal against an order passed for escaped service tax under section 73 of the Act, or for adjudicating penalty under section 83A or against the order of Commissioner of Central Excise (Appeals) under section 85 of the Finance Act, 1994 that can be field either by the assessee or by the Department within three months of the receipt of the order sought to be appealed against.    Section 86 (7) of the Finance Act, 1994  provides that in hearing the appeals and making orders under this section, the Appellate tribunal shall exercise the same powers and follow the same procedure as it exercises and follows in hearing the appeals and making orders under the Central Excise Act, 1944.

            Section 35-B of Central Excise Act, 1944 provides appeal before Appellate Tribunal. Any person aggrieved by any of the following order may appeal to Appellate tribunal against such order-

            >>> a decision or order passed by the Commissioner of Central Excise as an adjudicating authority;

            >>> an order passed by the Commissioner (Appeals) under Section 35A

within three months from the date on which the order sought to be appealed against is communicated to the Commissioner of Central Excise, or, as the case may be, the other party preferring the appeal along with the requisite fe.

            Section 35 C (1) of Central Excise Act, 1944 provides that the Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such order thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such direction as to Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidences if necessary. Similarly Customs Act also provides appeal before the Appellate Tribunal.

            Rule 41 of Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 provides that the Appellate Tribunal may make such orders or give such directions as may be necessary or expedient to give effect or in relation to its orders or to prevent abuse of its process or to secure the ends of justice. If any direction is given by the Appellate Tribunal, in their order, the lower Authority has to comply with the directions of the Appellate Tribunal. If such authority fails to do so, the question arised is whether the aggrieved party is entitled to file a misc. application before the Appellate Tribunal for implementation of the directions of the Appellate Tribunal.

            One interesting case came before the Ahamedabad tribunal. In 'Shreeji Concast Ltd., V. Commissioner of Central Excise, Bhavnagar' - [2008 -TMI - 3644 - CESTAT AHMEDABAD] the assessee filed the present misc application for implementation of the tribunal's order. The tribunal found that as a consequence of allowing the appeal by the tribunal, the appellant became entitled to certain amount of refund, for which they approached the jurisdictional Central Excise Authority.   The Assistant Commissioner held that the amount of refund claimed by the appellant is liable to be sanction in terms of tribunal's order. However the Assistant Commissioner credit the amount to Consumer Welfare Fund on the ground that the burden of duty stands passed on by the appellant to their buyers. 

            The assessee instead of filing appeal before Commissioner of Central Excise (Appeals) against the above said order of Assistant Commissioner has chosen to file the present misc. application for the implementation of the tribunal's order.

            The tribunal held that if the consequential relief has entitled the applicant to claim the refund of some excess duty paid, such refund has to pass through the test of unjust enrichment. The Assistant Commissioner, the Tribunal held, while dealing with the refund claim, has implemented the order and has held that refund claim is sanctionable in terms of tribunal's order but such refund claim has to be examined in terms of Section 11B of Central Excise Act, 1944 as regard unjust enrichment. The tribunal found that unjust enrichment was never an issue before the tribunal and said issue were examined by the Assistant Commissioner for the time while passing the present order.

            The tribunal rejected the contention of the assessee that the unjust enrichment is not applicable to the refund of duty deposited under the compounded levy of scheme and held that it is a question relatable to the declaration of law. The applicant was at liberty to raise the same before the Commissioner (Appeals) in his appeal against the said order.

            The assessee relied upon the tribunal's order in [GMMCO Ltd. V. Commissioner of Customs, Chennai' - 2007 -TMI - 1876 - CESTAT, CHENNAI] in support of his submission that the Assistant Commissioner's order can be directly set aside by the Tribunal. The tribunal found that the facts and circumstances in the case relied are entirely different than the facts and circumstances of the present case. In that case the tribunal remanded the matter to the Adjudicating Authority which was not followed by the Adjudicating Authority while deciding the matter. Instead of carrying out the directions of the tribunal he has chosen to enter into the enquiry as to whether the refund claim in question is hit by bar of unjust enrichment. In the said case the tribunal held that the Assistant Commissioner found fault in the order of tribunal and chose to sit in judgment over it. 

            The tribunal in this case further held that in the present case that there was no arguments or issue over unjust enrichment angle and as per the provisions of Section 11B such refund claim were to be examined on the point of unjust enrichment. As such it cannot be said that the Assistant Commissioner has not implemented the tribunal's order.

                        The tribunal held that the tribunal cannot deal with the orders passed by the Assistant Commissioner, unless the same are in defiance to the directions of the tribunal's order. As such the tribunal found no jurisdiction in setting aside the order of the Assistant Commissioner, while dealing with the present misc. application and the proper course for the applicant is to approach the appellate forum under the law.