2018 (3) TMI 345 - AT - Central Excise

Refund claim - whether refund could be rejected based on the Education Cess and Secondary & Higher Education Cess has already been collected from their customers - time limitation - unjust enrichment - Held that - if the amounts which is required to be paid as reversal for the exempted goods cleared is in itself has not a duty but an amount, the question of levy of Education Cess would not arise. The undisputed fact is the amount paid by respondent being an amount and does not amount to duty, the provisions of Section 11B of the Central Excise Act, 1944, would not get attracted to such refund claims, and the bar of unjust enrichment will not apply, as the said provisions of Section 11B of Central Excise Act, will apply to refund is a duty. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Reversal/payment of 6% amount as duty of excise
2. Liability of Education Cess/Secondary Higher Education Cess on 6% amount
3. Applicability of time limit under Section 11B for refund of Education Cess/SHE Cess
4. Doctrine of unjust enrichment

Analysis:

Reversal/payment of 6% amount as duty of excise:
The appellant filed a refund claim contending that they paid Education Cess and Secondary & Higher Education Cess inadvertently on the 6% amount paid for non-excisable goods. The jurisdictional Range Officer reported that the appellant did not adopt the correct method for exempted clearances of certain goods, leading to the rejection of the refund claim. The First Appellate Authority allowed the appeal, emphasizing that the 6% amount paid cannot be considered as duty of excise. The appellate tribunal concurred, stating that the payment under Rule 6 of CENVAT Credit Rules 2004 is not a duty of excise, and the department should not treat it as such for Education Cess purposes.

Liability of Education Cess/Secondary Higher Education Cess on 6% amount:
The tribunal held that since the 6% amount paid for exempted goods is not considered excise duty, the Education Cess and Secondary Education Cess are not applicable on this amount. Referring to specific provisions, it was concluded that these Cesses are not liable to be paid on amounts paid under Rule 6 of CCR, 2004.

Applicability of time limit under Section 11B for refund of Education Cess/SHE Cess:
The tribunal determined that since the amount paid was not a duty but an amount, the provisions of Section 11B of the Central Excise Act, 1944, would not apply to such refund claims. It was held that the bar of unjust enrichment does not apply in this case.

Doctrine of unjust enrichment:
Regarding the doctrine of unjust enrichment, the First Appellate Authority found that the appellant did not collect any amount from customers as Education Cesses, leading to the conclusion that the bar of unjust enrichment is not applicable. The tribunal agreed with this finding, stating that the Revenue Authorities failed to dispute the detailed findings of the First Appellate Authority. The tribunal upheld the impugned order, rejecting the appeal.

In conclusion, the tribunal upheld the decision of the First Appellate Authority, ruling in favor of the appellant and rejecting the Revenue's appeal against the refund claim. The judgment clarified the non-applicability of certain duties and Cesses on the 6% amount paid for exempted goods, emphasizing the correct interpretation of relevant rules and provisions.