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TMI Blog2010 (4) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... m refund of the same and accordingly they preferred this refund claim on 19-4-2003. Prior to 1-10-1975, also the Department finalized provisional assessment and demanded differential duty to the tune of Rs. 3,00,07,511.57 which pertains to the period from 17-7-1973 to 30-9-1975. Since the appellants contested this demand in an appeal filed to this authority, an order-in-appeal bearing No. 143/2004 dt. 13-8-2004 was passed by this authority directing the Assistant Commissioner, A Division, Bangalore to adjudicate the case De novo and re-quantify the demand keeping in view certain guidelines given to him. The respondents have requested to adjust this re-quantified demand to their refund claim. The refund claim of Rs. 3.76 crores of the respondent was sanctioned by the Asst. Commissioner A Division, Bangalore and ordered for crediting the same to Consumer s Welfare Fund Account as he felt that the claim did not pass through successfully the test of unjust enrichment vide the Order-in-Original. Aggrieved by such an order Revenue came in appeal before this Bench. This Bench vide its Final Order No. 1939/2006, dt. 22-11-2006 [2007 (210) E.L.T. 193 (Tribunal)] had dismissed the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sub-rule (5) are appealed against - or questioned in a writ petition or suit, as the case may be, assuming that such a writ or suit is entertained and is allowed/decreed - then any refund claim arising as a consequence of the decision in such appeal or such other proceedings, as the case may be, would be governed by Section 11B .. (emphasis supplied) (c) The above underlined law laid down by a nine judge Bench still holds good. The Commissioner (Appeals) has palpably failed to take note of the facts of the present case and the above observation of the Supreme Court with regard to applicability of Section 11B to refunds arising out of appellate or other civil proceedings. There is not even a whisper of this landmark judgment in the impugned appellate order. Applying the ratio of the said judgment to facts of the present case it is evident that the refund arose not on finalization of provisional assessment, but as a consequence of an appellate order after the company went in appeal against the order finalizing the assessments. Accordingly applying the ratio of the said judgment, the refund in question was rightly put to the test of unjust enrichment by the Divisional O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court judgment in TVS Suzuki case [2003 (156) E.L.T. 161 (S.C.)] without proper application of mind to the facts of that case which are distinguishable. In that case the refund has arisen at the time of finalisation of provisional assessment under sub - rule (5) of Rule 9B, unlike in the present case where the refund finally arose only as a consequence of the appellate order as pointed out earlier. It is for this reason that the Larger Bench of the Supreme Court in Allied Photographics India Ltd. case [2004 (166) E.L.T. 3 (S.C.)] affirmed the judgment in TVS Suzuki case as the same was found in accordance with the law laid down by the Supreme Court in Mafatlal case. (i) For the aforesaid reasons, the Commissioner s (Appeals) order is liable to be set aside and the matter remanded to the original authority with direction to the respondent to rebut the legal presumption under Section 12B of the Central Excise Act with such evidence as may be necessary. (j) Alternatively, for the sake of argument if the refund is considered as arising while finalizing provisional assessment under Rule 9B (5), in that event also the claim would be hit by the bar of unjust enrichment in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cedure established under sub-section (2) of Section 11B of the Act . (emphasis supplied) He has also failed to appreciate that in TVS Suzuki case the Apex Court particularly took note of the fact that the refund claim in that case was filed prior to the amendment to Rule 9B(5) as against in the present case where the claim for refund was filed well after the said amendment. The Commissioner (Appeals) order is clearly contrary to the said judgment of the Supreme Court and hence the same not sustainable. (n) In effect, therefore, whether the present claim is treated as a claim arising out of an appellate order or on finalisation of provisional assessment, either way the bar of unjust enrichment is attracted. (o) The Commissioner (Appeals) has also erred in holding that the bar of unjust enrichment would not apply as the deposits were made under courts orders/made voluntarily subsequent to clearances of the goods relying on Tribunal decision in VST Inds. case (supra) which is contrary to the law laid down by the Supreme Court in Jain Spinners Ltd., case [1992 (61) E.L.T. 321 (S.C.)] agreed to by the said court in Mafatlal case. (p) In Jain Spinners case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence has been passed on to buyers. If these amounts are charged off to REVENUE and treated as cost, the ITC having made profit all through this disputed period, the fact of passing on the incidence is quite evident. (w) The company as well as the lower appellate authority are under a wrong premise that the amounts deposited post clearance can t be passed on. It has not been appreciated by the lower appellate authority that even if it could not he passed on to the very buyers during period 1975-1983, the company, nevertheless, could still pass on the incidence to other dealers treating these as cost. At the same time getting refund from the Govt. would clearly amount to undue enrichment which is NOT permissible as held by several judicial pronouncements by now. 4.1 Ld. Counsel appearing on behalf of the respondents would submit that the entire case has arisen after the finalization of the provisional assessment done by the authorities. He would rely upon the following chart. Sl. No. Date Events Relevant Aspects 1. 18-3-2005 Impugned order passed in No. 73/2005-C.E. by CCE (A) This is before the Hon ble Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal by the Revenue in the EA3 memorandum filed by them. The refund granted is Rs. 1,26,66,595/- after appropriating Rs. 2,49,63,062/- as mentioned in the OIO dt. 15-12-2005. (ii) Since the subsequent orders passed by the CCE(A) and the Asst. Commissioner have not been appealed against and have a direct connection with the present appeal and the impugned order, the present appeal becomes infructuous and more so because the amount has been refunded by appropriation of dues. (iii) The Department has in a review dt. 2-12-2005 as mentioned by the Asst. Commissioner in his order dt. 15-12-2005 on page 3, accepted the OIA directing refund passed by the CCE(A) on 17-10-2005. This being the position, the present appeal does not survive in law any longer and is liable to be dismissed. (iv) The events following the filing of appeal by the revenue on 16-6-2005, eclipse and overshadow the appeal and render the same abortive/infructuous and the appeal is liable to be dismissed as bereft of merit. (v) The Respondent submits that the following decisions of the S.C. have held that if an order has not been appealed against, it attains finality and judicial discipline requires th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of provisional assessment under Rule 9(B), provisions of Section 11B will not apply. Moreover amendment made to Rule 9(B)(5) by way of inserting a proviso vide Notification No. 45/99(N.T.) dt. 25-6-1999, is prospective and not retrospective. That means to say that if the refund claim which arose consequent upon finalisation of provisional assessment, pertains to the period prior to 25-6-1999, then the bar of unjust enrichment will not apply to such case, though the finalization of provisional assessment took place after 25-6-1999. The appellants quote many citations to this extent, the recent of which is the affirmation of the Hon ble Supreme Court (Larger Bench) of its judgment in the case of T.V.S. Suzuki Ltd. - 2003 (156) E.L.T. 161 (S.C.). According to this judgment of Larger Bench of the Apex court, the bar of unjust enrichment will not apply to the refund cases, which arose due to finalisation of Provisional assessment especially for the cases pertaining to the period prior to the amendment of Rule 9(B)(5) i.e. prior to 25-6-1999. The Board has accepted this stand of the Apex Court as it is the law of the land now. In this connection, my attention was drawn to the latest inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 need not undergo unjust enrichment test and even if it is subjected to such test it succeeds in that attempt as the appellants have apparently not collected it from their customers as these payments are in the nature of deposits made posterior to the clearance of excisable goods. 7. The entire submission of the Revenue in the grounds of appeal and additional grounds of appeal and the written submissions filed by the id. Counsel would urge only on the point that the respondent has to pass the test of unjust enrichment as provided under Section 11B. The various case laws, which have been cited by ld. Counsel for the Revenue, would indicate that the assessee/respondent has to pass the rigors of Section 11B as regards the unjust enrichment. It is now a settled law by the Hon ble Supreme Court in various case laws that the unjust enrichment would apply in the case of the refund claims filed by the assessee subsequent to the provisional assessment being finalized. In view of this, the findings of the ld. Commissioner (Appeals) that the provisions of Section 11B will not be applicable to the refund claims which are filed consequent to the final assessment even if the period involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in favour of the assessee, as they have apparently not collected the amounts so paid from their customers and on the ground that these payments were made post clearances of the goods. As against these categorical finding, the submission of the ld. Counsel for the Revenue seems to be that the respondent could still have passed on the incidence to their customers treating this as cost. We find from the records that for this submission, the ld. Counsel or the Revenue has not adduced any evidence and is in thin air and presumptive. We also find that this is a new stand taken by the Revenue at the time of written submission, again totally unsupported by any evidence. In the absence of any evidence that the appellant could have passed on the duty liability and could be hit by the bar of unjust enrichment, we find that the decision of the Hon ble High Court of P H in the case of CCE, Chandigarh v. Modi Oil General Mills [2007 (210) E.L.T. 342 (P H)] in an identical issue, will cover the issue in favour of the respondent. We may respectfully reproduce the decision in entirety :- The Revenue has approached this Court seeking reference under Section 35G of the Central Excise Act, 1944 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has actually collected the duty from their buyers and has, thus, passed on the incidence of duty to them. It was found that any refund if given to them would lead to unjust enrichment under the provisions of Section 12B of the Act and that the refund amount should be credited under Section 12C of the Act to Consumer Welfare Fund. 2. The assessee filed an appeal before the Commissioner (Appeals) against the Order-in-Original, who accepted the appeal by holding that the assessee had deposited Rs. 10,87,824/- on 25-3-1998 in respect of the period 1997-98 after the goods had been cleared and, therefore, it could not be established that the amount of duty had passed on to the buyer. According to the Commissioner (Appeals) the duty liability amounting to Rs. 10,87,824/- determined by the Commissioner deposited by the assessee on 25-3-1998 was paid by the assessee from its own pocket. Therefore, the refund was held admissible. It was also found that in cases where duty is paid subsequent to the date of clearance, the presumption under Section 12B of the Act stood rebutted. However, in respect of the month of March, 1998 the deposit of Rs. 1,36,870/- was not refundable as it had been pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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