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TMI Blog2016 (12) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... ith power to recover such tax which has been collected in excess. With that specific empowerment available in the statute, the need to prove that provider has deposited the tax is rendered superfluous. It is sufficient to evince that invoices, incorporating the tax amount, has been honoured in full. The bank statement and invoices furnished do evidence that tax liability has been discharged along with consideration for services received. The impugned order has found that the payments made prior to September 2005 is barred by limitation. We hold that this finding is in accordance with the time-line laid down in section 11B of Finance Act, 1994, Learned Counsel for appellant attempted to forcefully argue that this, being tax not liable to be paid, is not a refund envisaged in section 11B of Central Excise Act, 1944. - it is well-settled that the powers of the Tribunal are circumscribed by the statute. The extraordinary powers vested in High Courts and the Hon'ble Supreme Court cannot be exercised by us. We, therefore, uphold the rejection of the claim for the period prior to September 2005 on grounds of limitation but allow the appeal to the extent of ₹ 1,08,95,273 to be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t with the payments effected for the construction, including the service tax, having been capitalized, the hurdle of 'unjust enrichment' would come in the way of granting refund of the entire amount as the tax amount would have been recovered from the customers as power tariff. The findings in the order impugned before the appellate authority, to the detriment of the appellant on two other grounds, was not alluded to except in the narration of the submission made by appellant. 5. The order of the original authority is explicit that taxability, time-bar and 'unjust enrichment' have not been examined as the proof of tax having been received by the contractor and of further deposit in the Consolidated Fund of India had not been satisfactorily established. The impugned order of first appellate authority confirmed the rejection but on entirely different grounds without rebuttal of the grounds of appeal. Between the two orders the various objections to the claim raised in the show cause notice are exhausted. It would appear that the two lower authorities deigned to entertain the understanding that the various justifications, viz., taxability, collection of the tax, dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant that the cost of construction of the jetty has been capitalized. It being almost well nigh impossible to verify an act not performed, viz., not having passed on the incidence of duty/tax, with claimants for refund suspended between a rock and a hard place to satisfy the refund sanction authority, judicial rulings and administrative instructions have accorded relief by allowing accounting entries and treatment to suffice. Without such allowance, section 11B would be otiose. None of these rulings or instructions was intended to be the sole criterion but indicate the evidences that may pass muster. The primacy accorded in law to the satisfaction of the officer designated in the statute to sanction refunds and release them is not fettered. On the contrary, consequent upon application of mind to the merit of the claim, the statutory provision: 'SECTION 11B. Claim for refund of duty and interest, if any, paid on such duty - xxxx [(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 and interest, if any, paid on such duty] paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at decision, it was held that the expression 'incidence of duty' was not limited to direct passing on the burden of duty but included indirect transference. Relying on the decision of the majority in re mafatlal Industries Ltd [(1997) 5 SCC 536], the Court decided that responsibility for discharge of onus in the refund provision was not dependent on the manner of use of goods and went on to observe that 'Difficulty in proving that the incidence of the duty borne by the importer has not been passed on to the purchaser of the finished product can be no ground for interpreting section 27 differently. It is not possible that in no case will an importer not be able to prove that the incidence of the duty imposed on the raw material has not been passed on to any other person. The judgment in re Solar Pesticides Pvt Ltd is not a licence to transfer sanctioned claims to the Fund but discountenances the presumption that there is no scope for invoking 'unjust enrichment' in refunds pertaining to goods imported for manufacture. The approval rendered by the Hon'ble Supreme Court to the different ways in which evidence of not having passed on the incidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r those found to be ineligible. Accordingly, the rejection of the refund claim in the impugned order is set aside. 12. We proceed to examine the claim on behalf of the appellant that the incidence had not been passed on and that this is evidenced by capitalization which has been discredited in the impugned order. The question that must be answered is whether capitalization suffices as evidence of incidence of duty having been borne by the applicant. The first appellate authority has held that capitalization is a clear indication that incidence has been shifted as that would have been absorbed in the tariff charged from customers. Probably, the meaning of capitalization is not particularly familiar to indirect tax administrators. In accounting terms, capitalization is a management decision that the expense for an item is not to be met from the revenues of the year in which it was acquired. The expense is, thereby, transformed into expenditure to be recovered from future streams of revenue. The annual amortization of this expenditure is charged on the revenues of subsequent years and such charge is termed as depreciation. To the extent that depreciation is not a charge on the proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial relied upon for tariff fixation of each entity in the sector is available in the public domain. Separate tariffs are fixed for producers, transmission and distributor entities in separate processes. From this, it is clear that any refund of duties or taxes would not escape the lynx-eyed Commission or the empowered consumers of each entity during scrutiny in public hearings. Moreover, under the new schema, power producers deal with distributors through power purchase agreements approved by the Commission or by open trading on exchanges. With the former ensuring that enrichment from refund of duty is not possible and the latter being purely market driven, capitalization is surely sufficient evidence that the tax burden was not shifted. 14. The capitalized item is a jetty for landing of coal that is used to generate thermal energy at Trombay. Learned Counsel for appellant informed that the proceedings of the Maharashtra Electricity Regulatory Commission in the matter of Tata Power Company Ltd is available in the public domain as case no. 71 of 2010. We have examined it and find that paragraph 1.29 to 1.43 covers the issue of capitalization. The Commission had approved its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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