2017 (5) TMI 455 - AT - Central Excise

Refund claim - Higher Education Cess and the Secondary & Higher Secondary Cess paid on tea cess - whether the Education Cess and the Secondary & Higher Education Cess are not to be calculated on cesses which are levied under the acts administered by department/Ministries other than Ministry of Finance, Department of Revenue but only collected by the department of Revenue in terms of those Acts - Circular NO.978/2/2014-CX dated 07.01.2014. Whether the refund claims filed by the appellants of the Higher Education Cess and the Secondary & Higher Secondary Cess paid on tea cess for the period 2004 to 2014 are time barred and hit by the principle of unjust enrichment in terms of Section 11B of the CEA, 1944? Held that - the present case is squarely covered by the decision of the Hon ble Gujarat High Court in the case of Joshi Technologies International v. UOI 2016 (6) TMI 773 - GUJARAT HIGH COURT , where the Adjudication order was challenged, and 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. As a necessary corollary, it follows that the provisions of the Central Excise Act, 1944 would not be applicable for refund of such amount paid by mistake. - the reliefs granted by the Hon ble High Court in the case of Joshi Technologies International on an identical situation would be binding on this Tribunal, when such an order of the Hon ble Court is of consequential nature. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Whether the refund claims for Higher Education Cess and Secondary & Higher Secondary Cess paid on tea cess are time-barred.
2. Whether the refund claims are hit by the principle of unjust enrichment under Section 11B of the Central Excise Act, 1944.

Issue-wise Analysis:

1. Time-barred Refund Claims:
The core issue is whether the refund claims filed by the appellants for the period 2004 to 2014 are time-barred under Section 11B of the Central Excise Act, 1944. The appellants argued that the claims were based on the Central Board of Excise & Customs Circular No. 978/2/2014-CX dated 07.01.2014, which clarified that Education Cess and Secondary & Higher Education Cess should not be calculated on cesses levied under acts administered by departments other than the Ministry of Finance, Department of Revenue. The authorities below rejected the claims as they were filed beyond the one-year time limit specified in Section 11B. The Assistant Commissioner sanctioned part of the refunds but credited them to the Consumer Welfare Fund and rejected the balance as time-barred. The Commissioner (Appeals) upheld this decision.

2. Unjust Enrichment:
The second issue is whether the refund claims are hit by the principle of unjust enrichment. The authorities below observed that the refund claims were also rejected on the ground of unjust enrichment. The appellants relied on the Gujarat High Court decision in Joshi Technologies International v. UOI, where the court quashed the adjudication order and allowed the refund claim, stating that the amount paid was not a duty of excise but a mistake of law. The court held that Section 11B of the Central Excise Act, 1944, would not apply to such claims, and the limitation prescribed under Section 11B would also not be applicable. The court further stated that the amount paid under a mistake of law should be refunded, and the principle of unjust enrichment would not apply if the burden of the duty was not passed on to any other person.

Judgment Analysis:
The Tribunal, after hearing both sides and perusing the appeal records, found that the facts of the present case are similar to those in Joshi Technologies International v. UOI. The Tribunal noted that the Gujarat High Court decision, which allowed the refund claims despite being filed beyond the one-year limit and without being hit by unjust enrichment, is binding. The Tribunal also referred to other decisions where similar refunds were allowed, even when the claims were filed beyond the statutory period, as the amounts paid were not considered duties of excise but rather amounts paid under a mistake of law.

The Tribunal rejected the Revenue's reliance on the Supreme Court decision in Mafatlal Industries Ltd. v. UOI, stating that the Tribunal has no authority to discard High Court decisions on identical issues. The Tribunal also cited various other cases where refunds were granted despite the claims being filed beyond the limitation period, emphasizing that the amounts in question were not duties of excise but amounts paid erroneously.

Conclusion:
The Tribunal allowed the appeals filed by the appellants, granting the refund claims with consequential relief, and held that the claims were not time-barred and not hit by the principle of unjust enrichment. The Tribunal directed the jurisdictional Commissioner to return the deposited amounts as per law.