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TMI BlogREFUNDX X X X Extracts X X X X X X X X Extracts X X X X ..... es for payment of interest on payment of refund. As per Section 11BB, if any duty ordered to be under Section 11B has not been refunded within three months from the date of receipt of the refund application in the prescribed manner and form along with the supporting documentary evidence as laid down in the relevant rules, interest at the rate notified by the Central Government shall have to be-paid on such duty from the date immediately after the expiry of three months from the date of receipt of application till the date of refund of such duty. 2. Presentation of refund claim 2.1 Any person, who deems himself entitled to a refund of any duties or other dues, or has been informed by the department that a refund is due to him shall present a claim in proper Form, along with all the relevant document supporting his claim and also the copies of documents/records supporting his declaration that he has not passed on the duty incidence. 2.2 The claim should be filed with the Deputy/Assistant Commissioner of Central Excise with a copy to the Range Officer. 2.3 The claim is to be presented in duplicate and is to be duly signed by e claimant or by duly authorised person on his be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary proof for this purpose. It is clarified that the question of unjust enrichment has to be looked into on case by case basis. There cannot be a general instruction indicating the documents and/or record, which the claimant should produce as a proof that he has not passed on the duty incidence to any other person. 3.4 Claim for refund of less than Rs.100 shall not entertained in respect of all excisable commodities. For rebate, the minimum should be Rs. 500/- per claim as specified in the Notification No. 40/2001-C.E. (N.T.), dated 26.6. 2001. 4. Unjust enrichment 4.1 Text of the legal provisions relating to unjust enrichment {vide Section 11(B) (2)} is reproduced below (2) "If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund: Provided that the amount of duty of excise as determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise under the foregoing provisions of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst proviso to sub-section (2), including any such notification approved or modified under sub-section(4), may be rescinded by the Central Government at any time by notification in the Official Gazette. 4.2 The Supreme Court in the case of M/s. Mafatlal Industries Ltd. v. Union of India (per majority of 9 Judges Bench) in their judgment dt. 19.12.1996 [1997 (89) E.L.T. 247 (S.C.)] has held: (i) If the person claiming the refund has passed on the burden of duty to another and has not really suffered any loss or prejudice, there is no question of reimbursing him and he cannot successfully sustain an action for restitution, based on Section 72 of Indian Contract Act. (Para 112) (ii) The obligation to prove that duty has not been passed on to another person is always there as a precondition to claim of refund. It cannot also be said that by giving retrospective effect to Section 11B, any vested or substantive rights are being taken away. The manufacturer has already collected the duty from his purchaser and has thus reimbursed itself. A manufacturer had no vested legal right to refund even when he had passed on the burden of duty to others. No law conferred such a right in hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.3 The Hon'ble Supreme Court in the case of Union of India and others v. Solar Pesticides Pvt. Ltd. vide order dt. 4.2.2000 (Civil Appeal No. 921 of 1992) has held that the principle of unjust enrichment would be applicable in respect of cases of refund of duty paid on imported raw materials even if captively consumed in the manufacture of a final product. The Hon'ble Supreme Court has held that even for captive consumption of goods, if certain duties have been paid, whose refund is claimed, the claimant will have to establish that the incidence of duty has not been passed on, directly or indirectly, to any other person. 5. Disposal of claims where application id pending at appellate level 5.1 Cases where it is considered advisable to contest an" adverse" High court judgment, inter alia, involving substantial refund or release of any e goods by filing Special Leave Petition (SLP) including Stay in the Hon'ble Supreme Court. (a) In such cases most speedy action should be taken by concerned Commissioner to submit considered comments, grounds for appeal and all relevant papers to Board for obtaining Law Ministry's advice and if agreed filing SLP Stay Petition against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court should be immediately faxed to the Board, so that even this could be produced to Supreme Court Registry, while seeking out of turn/urgent hearing for stay. (ii) Where no time limit is stipulated by the High Court for implementing its order, but the petitioner files a contempt petition/notice in the High Court, the same should be immediately faxed to the Board, for similar action as mentioned in (i) above for pressing for urgent hearing of our stay. It would be possible for the Board's office to file SLP/Stay Petition with relevant documents showing justification for urgency petition before the Registrar of the Supreme Court (for inclusion of department's application for out of turn hearing in the 'list of cases for urgent of monitoring'), and to get interim stay in time from the Supreme Court when we have a good case, only if Commissioners and the Legal Cells keep very strict personal watch for taking time bound speedy action suggested above. No unilateral decision should be taken by the Commissioners to release the goods/order refund in a case where it is decided in consultation with our Counsels in the field, and Law Ministry, to file SLP/Stay Application before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner to move expeditiously and obtain stay order from Commissioner (Appeals), especially where the orders passed by such Central Excise Officer/Customs Officer suffer from serious infirmities and it involves grant of heavy refunds. 5.5 General In all types of cases mentioned above, processing of refund application should simultaneously start separately from the point of view of unjust enrichment provisions and accordingly the assessee/claimant should be asked to evidence to establish his claim that incidence of duties whose refund is claimed has been borne by him and that the same has not been passed on to Where the claimant is unable to furnish this evidence or otherwise is not entitle to refund, passing of appropriate orders on refund requested be c by competent authority irrespective of the outcome of SLP/Civil Appeals/Stay Petitions pending before Supreme Court or other appeals etc. before lower appellate authorities. In all other cases, not involving any dispute, refund applications should be processed on merits speedily and a decision taken within a period of three months from the date of application to avoid any interest liability- where refund i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -in-Original. A separate series with suffix 'R' for numbering of Orders-in-Original issued for sanction of refund/rebate claims may be used. However, in terms of risk to revenue, a monetary limit of Rs. 50,000/- has been fixed below which O-in-O may not be issued if the rebate is sanctioned in full. This shall also enable the department to focus on the cases where amount sanctioned is higher than Rs. 50,000/-. 8.3 Board has further decided that: (i) All refund/rebate claims involving an amount of Rs. 5 lakhs or above should be subjected to pre-audit at the level of jurisdictional Commissioner. In such cases, a suitable Order-in- Original shall be passed by Deputy/Assistant Commissioner of Central Excise. Since the claim is pre-audited with the concurrence of Commissioner, the usual review proceedings under section 35E may not be necessary in such case. (ii) For the refund/rebate claims involving an amount above Rs. 50,000/- but below Rs. 5 Iakhs, Orders-in-Original should be issued by Deputy/Assistant Commissioner. These 0-1-Os should be subjected to compulsory post-audit at the level of Additional/Joint Commissioner (Audit). The Orders-in-Original shall also be subjecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 (SC)] that in case of consequential refund, bar under section 11A of Central Excise Act, 1944 will not be applicable r very of refunded amount if the issue is finally decided in favour of the department. 11. Refund of Amount earlier credited to Consumer Welfare Fund 11.1 The drawl of amount originally credited to Consumer Welfare usually takes time due to involvement of various agencies resulting in delay in grant of refund to the assessee and the Department has to pay interest delayed refunds. Accordingly, the matter was taken up with Principal Chief Controller of Accounts (CBEC). Pr. Chief Controller of Accounts (CBEC) has informed the Board that in - with the Chief Controller of Accounts, Ministry of Consumer Welfare and Public Distribution who maintains account of Consumer Welfare Fund, the procedure of processing refund claims relating to Consumer Welfare Fund has been strengthened for timely payment of the claims. A system of monitoring has been set in place to ensure timely payment of refund claim within a month of the application. Pr. Chief Controller of Accounts (CBEC)has also desired that in case, refunds are not effected within 45 days of request made to PAO,C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Ministry of External Affairs and an undertaking from the diplomatic mission that they will produce, within a period of 3 months or such extended period, a certificate that the goods have been put to the specified use. There is also a condition that the said goods cannot be disposed of before the expiry of 3 years from the date of clearance of the goods. It may be noted that earlier, exemption was available (through executive instructions and ad-hoc exemption orders) to goods (including cars) meant both for official as well as personal use of the mission or its staff. The general exemption notification limits this benefit only to goods meant for the official use of the mission/consular office. There seems to be no justification, now, for continuing the old Circulars of 1957 and 1970. Refunds to diplomatic missions would be guided by the normal rules/provisions relating to refunds. In view thereof the Circulars of 1957 and of 1970 have been withdrawn. Refunds would therefore be governed entirely by the conditions mentioned in notifn. No. 3/2001 CE dt 1.3.2001 (sl. No. 250) and the time limit for making the refund claim would be one year from the date of purchase of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he user of any input or capital goods on which such exemption has been availed should get the full Cenvat credit including the portion of duty refunded to the manufacturer of such input or capital goods. For this purpose, Cenvat Credit Rules, 2002 have been amended by Notification No. 39/2002-C.E., N.T. dated 14-11-2002. In this context, it may be pointed that the "Refund" envisages in the notifications is not on account of any excess payment of excise duty by the manufacturers, but is basically designed to give effect to the exemption. In other words, the mechanism has been adopted to operationalise the exemption envisaged in these two notifications. In view of this aspect of the matter, the provisions of Section 11B of the Central Excise Act, 1944 would not apply in the case of these notifications. The notifications provide for expeditious refund of duty paid in cash. It is for this reason that a provision has been made for allowing refund even on provisional basis by the 15th of the next month, in case there is likely to be a delay in verification of the refund claims. Any excess or shortfall in case of refund allowed on provisional basis may be adjusted in the subsequent re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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