9911796707
TMI Blog2003 (2) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... en after the withdrawal of the exemption. Hence a case was registered by the department for the lapses committed and a show cause notice was issued for Rs. 1,54,41,755/- being the duty involved on the past clearances and also the department had invoked penal provisions. The then Collector in his Order-in-Original No. 39/93, dt. 9-9-93 had confirmed the said demand and also imposed penalty of Rs.15,00,000/- under Rule 173Q of the Central Excise Rules, 1944. Aggrieved by the above said order the appellant preferred an appeal before Hon ble Tribunal. As per directions of the Hon ble Tribunal the assessees had paid Rs. 40,00,000/- as pre-deposit. The Hon ble Tribunal in its final order no. 712, dt. 8-5-96 had upheld the Collector s order for full amount of demand of duty but reduced penalty to Rs. one lakh. Consequently, the assessees had paid the difference amount of Rs. 1,15,41,755/- (inclusive of penalty of Rs. 1,00,000/-). Subsequently, the appellant filed a Rectification of Mistake (ROM) before the said Tribunal and the same was heard on 23-1-98 on the grounds that the proviso to Section 11A(1) would not be attracted in their instant case. The Hon ble Tribunal in its Order ROM No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t incidence of duty was not passed on to the customers by the respondent company; that the company merely said in their reply to show cause notice dt. 20-5-98 that they have not collected any amount towards duty from the customers; that on perusal of the clearance documents like invoice-cum-delivery notes for the relevant period that no duty amount was collected from the buyers; but all the invoices are marked as provisional; that since the duty liability is there on the impugned goods under above documents it is not known whether any supplementary invoices have been raised by the company to collect the duty portion from the customers; that to this effect, no recording has been done by the lower authority; that since it is found from the invoices that the customers are only two (i.e.) MRL and IOC, the lower authority could have easily verified this fact from the other end accordingly, directed the lower authority to verify this aspect after hearing the party and with the above observations the appeal was remanded to the lower authority for fresh considerations. 4. The lower authority after due process of law vide Order-in-Original No. 42/01, dated 19-12-01 sanctioned a sum of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly provides the exclusion of excise duty while valuing the clearances. The Commissioner however collected duty on the invoice price treating the entire value as price exclusive on excise duty. It is therefore erroneous for the lower authority to now overrule a fact confirmed by the Commissioner, that the excise duty was not a part of the excise invoice price. (6) The lower authority was directed in the remand only to examine whether supplementary invoices had been raised to the buyers and whether the assessments were provisional. The lower authorities however exceeded all the scope of jurisdiction and erroneously re-examined the grant of refund afresh, which was not within his jurisdiction. (7) In addition to the refund the department is also due to pay interest to the company as provided under Central Excise Act, 1944, from 25-5-1999, till the date of grant of refund. (8) The issue of refund should be decided at the earliest, in view of the huge amount paid by the company to the department which is causing serious financial hardship, and also the department should be aware that the interest burden payable by the department has also reached huge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty, by the deptt. nor the CEGAT. The department has also not filed any appeal against the order of the CEGAT and therefore the order of the CEGAT has become final, with the consequential relief for suo motu grant of refund. (b) The amounts which have been deposited with the deptt. pending adjudication, the same are not attracted by the provisions of Section 11B, and automatic refund has to be granted as per the decision of the Supreme Court in the Mafatalal Industries case 1997 (89) E.L.T. 247 (S.C.). The provisions of unjust enrichment are not attracted and the deptt. cannot see to deny the refunds for such reasons, and they have to suo motu refund the amount deposited. The Supreme Court has again in Sinkhai Synthetics Chemicals Pvt. Ltd v. CCE - 2002 (143) E.L.T. 17 (S.C.) that the refund amount paid under protest was not to be governed by Sec. 11B and therefore the question of unjust enrichment cannot be sought by the deptt. (c) The Gujarat High Court in the case of Parle International Ltd. v. Union of India has held that amounts deposited pending adjudication, the doctrine of unjust enrichment was not applicable to such refund claims. (d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efund amount as Rs. 1,05,62,417/- by deducting Rs. 7,55,954/- as interest for Rs. 41,23,384/- and he further failed to consider the interest claims of the appellant, on interest for delayed payment of refund, to the appellant. 7. The chain of events spread over a time span of a decade are not disputed. Facts pertinent to the issue at hand commences with the Hon ble CEGAT Stay Order No. 48/1994, operative portion reproduced hereunder :- We further note from the Director s report that the Company s production is gradually picking up compared to the previous years and this position has not been contested by the learned Counsel. Taking note of the fact that the duty liability is not contested and also the financial position of the petitioner Co. and also the proceedings drawn by the BIFR, we direct the petitioner Co. to make a pre-deposit of Rs. 40,00,000/- (Rupees forty lakhs) on or before 30th June, 1994 and report compliance subject to which pre-deposit of the balance of duty and the entire penalty would stand dispensed with pending appeal. The matter will be called on 30th June, 94 for reporting compliance In pursuance of this the Appellants deposited Rupees forty lakhs in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and the amendment was not barred by time was erroneous on the face of the record. Consequently it follows that any action taken in pursuance of CEGAT Final Order No. 712 of 1996, dated 8-5-96 would not be legal and correct. But it was in pursuance to this Order that the Appellant paid Rs. 1,54,41,755/- on 23-7-1996. However vide ROM Order No. 11/98A, dated 23-1-1998 an error apparent on the face of the record was rectified which substantially altered the liability of the Appellant. Logical inference will enlighten that if there is a defect in an order and it is acknowledged and rectified then any action taken on the defective portion would also stand affected by the defect and becomes automatically liable for correction for otherwise the legality of the rectification would stand nullified. When the Hon ble CEGAT issued the ROM order with the consent of the Appellant and Respondent and the acceptance of that order stands confirmed by the fact that neither side challenged the ROM order before any other higher appellate forum, the inescapable conclusion is that any action taken in pursuance of the defective portion would also stand corrected so that the ROM order does not become ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT order consequent to which the deposit made becomes returnable and an attested Xerox copy of the Challan in Form TR6 evidencing the payment of the amount of such deposit, addressed to the concerned Assistant/Deputy Commissioner of Central Excise or Customs as the case may be, will suffice for the purpose. All pending refund applications already made under the relevant provisions of the Indirect Tax Enactment for return of such deposits and which are pending with the authorities will also be treated as simple letters asking for return of the deposits, and will be processed as such. Similarly, bank guarantees executed in lieu of cash deposits shall also be returned. 4. The above instructions may be brought to the notice of the field formations with a request to comply with the directions and settle all the claims without any further delay. Any deviation and resultant liability to interest on delayed refunds shall be viewed strictly. 5. All the trade associations may be requested to bring the contents of this circular to the knowledge of their members and trade in general. Para 3 of the above is very relevant to the issue at hand. 9. However the department issued a show c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific direction given by Tribunal - Order of Deputy Commissioner to be treated as an attempt to flout the decision of Tribunal s. - Order passed by Deputy Commissioner (Refunds) rejecting the appellant s claim for refund of Rs. 15 lakhs is an attempt to defy the order of Tribunal and to over reach this decision which was confirmed by the Supreme Court. This Tribunal order dated 21-1-1999 was not implemented in spite of specific directions given by this Tribunal, inasmuch as the amounts remitted by the appellant were not refunded. The department was trying to make out a situation to defeat the appellant from getting the fruits of the order passed by this Tribunal. The order has to be treated as an attempt to flout the decision of this Tribunal. The authority which passed that order did not consider all relevant aspects. It has only to be ignored . In the case of Konark Cement Asbestus Ltd. v. Commissioner of C. Excise, Bhubaneswar - 2000 (120) E.L.T. 634 (Tribunal) the Hon ble Tribunal has held that :- Strictures against the department - Assessee having succeeded in appeal before the Tribunal, the department should have refunded the amount of pre-deposit suo motu - Failu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ras in the case of CCE v. Calcutta Chemicals Co. Ltd. - 2001 (133) E.L.T. 278 (Mad.), has held as follows :- Pre-deposit made by assessee - Appeal decided by CEGAT in favour of assessee - Repayment of pre-deposit having been delayed by Department without any cause assessee entitled to get 15% interest on pre-deposit from the date of the order of the CEGAT. - The respondent-company has paid the pre-deposit of Rs. 30 lakhs as directed by the CEGAT. Ultimately, the appeal was allowed in favour of the respondent-company on 2-9-1999 and the demand was set aside. In spite of the repeated request by the respondent-company the pre-deposit amount was not re-paid by the Department. The order of the CEGAT was passed on 2-9-1999 whereas, the deposit amount was repaid on 14-9-2000. The Counsel for the Department has not been able to show whether it is necessary for them to get audit clearance as the amount involved is more than 5 Iakh rupees. In the absence of any material that there is no delay on the part of the department, it cannot be presumed that the delay is on account of non-clearance from the Audit Department. Thus, the Department is liable to pay interest. The respondent-company is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Counsel intended to divert the attention of the department in order to derail the issue. Simply because there were no clearances of the impugned goods after 29-12-92 till February, 93 for the reasons best known to the assessee, it cannot be concluded that there was no fluctuation in the price. In the present context it would not be out of place to mention that the assessee had retained the amount so collected and the assessee after the pronouncement of the judgment by the CEGAT had paid the amount that they are liable to pay to the exchequer. This in my opinion was depositing the amount in the guise of excise duty. The subsequent ROM passed by the CEGAT holding that the proviso to Sec. 11A cannot be invoked and that the assessee were not liable to pay the duty beyond six months would not empower the assessee to claim refund for the reasons discussed above, thereby, rendering the claim to merit justification under the doctrine of unjust enrichment. The refund claim in my opinion is liable for sanctioning and the same would be ripe for transferring to Consumer Welfare Fund in accordance to Sec. 12C of the Central Excise Act, 1944, as the same is not due to the assessee . Against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l wisdom tells that the Bench comprising of the Hon ble CEGAT President and the Hon ble Technical Member gracefully accepted an error in their order, acknowledged it by rectifying it only to uphold the majesty of the law. Their Hon ble intention cannot be sought to be put in jeopardy by recourse to another show cause notice on the specious plea of unjust enrichment . True that the vanquished always has an excuse but that is precisely what the Hon ble Apex Court sought to countenance in CCE v. Flock India (P) Ltd., reported in 2000 (120) E.L.T. 285 (S.C.), wherein it has been held that Order - Appealable order - Finality - Non-challenge of an appealable order - Effect - Where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing his order- Sections 35, 35A and 35C of the Central Excise Act, 1944 - Rules 1 and 173B of the Central Excise Rules, 1944. - If this position is accepted then the provisions for adjudication in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
