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TMI Blog2017 (5) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment of Revenue in terms of those Acts. 2. The ld.Advocates appearing on behalf of the appellants argued the matter at length and submitted written submissions with case laws. On the other hand, the ld.AR for Revenue reiterated the findings of the ld.Commissioner (Appeals). 3. Heard both sides and perused the appeal records. 4. I find that both the authorities below rejected the refund claims on the ground of time bar and unjust enrichment. It is observed that the refund claims filed beyond the time limit of one year are hit by section 11B of Central Excise Act, 1944. 5.1 Brief facts of the cases are that the appellants are engaged in the manufacture of tea falling under Chapter 09 to the First Schedule of Central Excise Tariff Act, 1985. In case of M/s Orangajuli Tea Garden, the refund claim of Rs. 98,310/- was submitted and in case of M/s Nonai Para Tea Garden, the refund claim of Rs. 1,42,736/- was submitted as per Board s Circular No.978/2/2014-CX dated 07.01.2014. 5.2 Show-cause notices were issued proposing as to why the refund claims of Rs. 98,310/- & Rs. 1,42,736/- respectively shall not be rejected on the ground that a major portion of the amount is found to be barr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsels appearing on behalf of the appellants strongly relied upon the recent decision of the Hon'ble Gujarat High Court in case of Joshi Technologies International v. UOI [2016 (339) ELT 21(Guj.)]. In that case, the petitioner was paying Cess on the clearance of Petroleum/crude oil under the provisions of OIL Industry (Development) Act, 1974. The petitioner filed a letter dated 17.07.2014 requesting for refund of the amount of Rs. 73,60,061/- paid on Education Cess and Secondary & High Education Cess inadvertently during the period July, 2004 to April, 2014. Refund Claim was filed in terms of the Board s Circular dated 07.01.2014 (which is applicable in the present appeals). By the impugned order dated 24.11.2014, the second respondent rejected the entire refund claim under the provisions of Section 11B of the Central Excise Act, 1944, which was challenged before the Hon'ble High Court. The refund claim was rejected on the ground of limitation as well as unjust enrichment. The Hon'ble High Court quashed the Adjudication order and allowed the Refund claim made vide application dated 17.07.2014. The relevant portions of the said decisions are reproduced below:- "5.2 It was submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le goods as they apply in relation to the levy and collection of the duties of excise on such goods under the Central Excise Act, 1944 or the rules, as the case may be. Secondary 138. And Higher Education Cess on excisable goods. The Secondary and Higher Education - (1) Cess levied under Section 136, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), being goods manufactured or produced, shall be a duty of excise (in this section referred to as the Secondary and Higher Education Cess on excisable goods), at the rate of one per cent calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess chargeable under Section 93 of the Finance (No. 2) Act, 2004 (23 of 2004) and Secondary and Higher Education Cess on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 (1 of 1944) or under any other law for the time being in force. The Secondary (2) and Higher Education Cess on excisable goods shall be in addition to any other duti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viz., (i) that the duty of excise should be levied by the Central Government in the Ministry of Finance (Department of Revenue); and (ii) the duty of excise should be collected by the Central Government in the Ministry of Finance (Department of Revenue). In the present case, since the machinery provisions of the Central Excise Act, 1944 and the rules framed thereunder have been incorporated in the OID Act, the second condition precedent is satisfied, viz. that the cess is collected by the Central Government in the Ministry of Finance (Department of Revenue); however, the first condition with regard to levy of such duty of excise by the Central Government in the Ministry of Finance (Department of Revenue) is not satisfied inasmuch as the oil cess under the OID Act is levied by the Ministry of Petroleum and Natural Gas. In the aforesaid premises, the requirements of Section 93 of the Finance Act, 2004 and Section 138 of the Finance Act, 2007 are not satisfied in the present case, and consequently, the said provisions have no applicability to the facts of the present case. The petitioner, therefore, cannot be said to have been liable to pay Education Cess and Secondary and Higher Seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een made in July, 2014 seeking refund of the amount paid for the period July, 2004 to April, 2014. On behalf of the revenue it has been contended that in view of the provisions of Section 11B of the CE Act, the limitation for filing the refund claim would be before the expiry of one year from the relevant date. The expression relevant date is defined under clause (B) of the Explanation to Section 11B of CE Act and insofar as the present case is concerned would be the date of payment of duty. However, as discussed hereinabove, the provisions of Section 11B of the Act would not apply to the claim of refund made by the petitioner. Consequently, the limitation prescribed under the said provision would also not be applicable. 14.It has been further contended on behalf of the revenue, that in case the limitation prescribed under Section 11B of the CE Act is not applicable, the general principles of limitation would apply and the limitation of three years for filing a suit would apply, whereas on behalf of the petitioner reliance has been placed upon Section 17 of the Limitation Act, 1963 to contend that this case would be governed by the said provision and hence the limitation would no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod of limitation. Moreover, as discussed hereinabove, the retention of the Education Cess and Secondary and Higher Secondary Education Cess by the respondents is without authority of law and hence, in the light of the decision of this court in Swastik Sanitarywares Ltd. v. Union of India (supra), the question of applying the limitation prescribed under Section 11B of the CE Act would not arise. * * * * * * * * * * * * * * 16. The claim of refund made by the petitioner to the extent the same was within the period of limitation has been turned down by the adjudicating authority on the ground of unjust enrichment. The adjudicating authority has held that the petitioner was required to file the refund claim under the provisions of Section 11B of the Central Excise Act, 1944 along with the documentary evidences as provided under Section 12A. According to the adjudicating authority, two basic requirements are to be complied with based on documentary evidences (i) the amount of duty, in relation to which the refund is claimed, is paid by the claimant; and (ii) the incidence of such duty has not been passed by the claimant to any other person. The first requirement is satisfied. As re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * * * * * * * * * * * * * 17.3 In the opinion of this court having regard to the price clause contained in the Crude Offtake and Sales Agreement and the certificate of the Chartered Accountant and the documents referred to hereinabove, more particularly, the certificate dated 29-7-2015 issued by IOCL, the above decision of the Supreme Court would be squarely applicable to the facts of the present case. Thus, from the certificate issued by the IOCL, it is evident that the IOCL which is the sole customer, has certified that it has not paid any Education Cess and/or Secondary and Higher Secondary Education Cess on the OID cess to the petitioner in view of the fact that the price paid for crude purchased by it from the petitioner is fixed solely on the basis of the international price of crude as traded in the international market and the burden of cess and royalty payable to Government of India is on the seller. In the impugned order, the adjudicating authority has brushed aside the certificate dated 20-11-2014 issued by the Senior Finance Manager of IOCL merely on the ground that such certificate was issued at the request of the claimant. As has rightly been stated in the above le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Hon'ble Supreme Court judgement in the Mafatlal case was not cited before the Hon le Gujarat High Court, and for this reason, it has come to a conclusion contrary to the Hon'ble Supreme Court judgment. If the Hon'ble Gujarat High Court s holding is accepted, then its natural consequences have also to be accepted. So, it has to be accepted that when excise duty is not payable, it would cease to be excise duty, and S. 11B would not be applicable for its refund. But this leads to a direct conflict with the mafatlal judgment, which says that in case of illegal levy, the only remedy is provided by Section 11B. Even otherwise, as has been noted hereinabove, some other High Courts, including the Hon'ble Gujarat High Court itself in Bajaj Foods , have taken a different view. * * * * * * * * * * * * * * * 1.26 The appellants have relied upon the Hind Agro judgment where the Hon'ble Delhi High Court held that when cess was erroneously paid on meat problems, refund claim could be filed within three years from the date of discovery of the mistake. The Hon'ble Delhi High Court did not follow the Mafatlal judgement on the ground that it is applicable to Central Excise and Customs du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms except where levy is held to be unconstitutional, is to be preferred and adjudicated upon under Section 11B of the Central Excise Act, 1944 or under Section 27 of the Customs Act, 1962 and subject to claimant establishing that burden of duty has not been passed on to a third party. In such circumstances, it was held, no civil suit for refund of duty is maintainable. It also observes that writ jurisdiction of High Courts under Article 226 and of Supreme Court under Article 32 remains unaffected by the provisions of Section 11B of the Act. It was further held that concerned Court while exercising the jurisdiction under the said articles, will have due regard to the legislative intent manifested by the provisions of the Act and the writ petition would naturally be considered and disposed of in the light of the provisions of Section 11B of the Act. It has been held therein that power under Article 226 has to be exercised to effectuate the regime of law and not for abrogating it, as the power under Article 226 is conceived to serve the ends of law and not to transgress them. At paragraph 113 of the said judgment, they classify the various refund claims into three groups or categories ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merated in paragraph 6 of this judgment is as follows : Where the levy is unconstitutional outside the category (I) provisions of the Act or not contemplated by the Act - In such cases, the jurisdiction of the civil courts is not barred. The aggrieved party can invoke Section 72 of the Contract Act, file a suit or a petition under Article 226 of the Constitution and pray for appropriate relief inclusive of refund within the period of limitation provided by the appropriate law. (Dulabhai s case (supra) para 32 clauses (3) and (4)." * * * * * * * * * * 24. The learned Counsel for the appellant has also contended that when the order of refund was rejected, the respondent could have approached this Court instead of filing the appeal choosing a wrong forum, could not be a deficit coming in the way to claim refund. 25. However, the petitioner has not approached the Tribunal after the order passed by 1st appellate authority and they have approached this Court. Therefore, even the provisions of Section 35B(1)(b) would not be applicable. From the facts of the case as discussed herein above, it emerges that petitioner has approached this Court contending that Section 11B is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) S.T.R. 131 (Tribunal) = 2003 (156) E.L.T. 357 (Tri.-Del.), this Tribunal has held that if any amounts are collected erroneously as representing service tax, which is not in force, there is no bar to return of such amounts. Further, in the case of CCE, Jaipur-I v. Jai Laxmi Finance Co. 2006 (3) S.T.R. 25 (Tri.-Del.), this Tribunal had again held that the amount collected without authority of law, the assessee is eligible for refund. In this case also, prior to 1-5-2006, the provisions of Service Tax were not applicable on the respondents and the amount paid as Service Tax was not payable by them at all. In that situation, the provisions of Section 11B of Central Excise Act, 1944 extended to the Service Tax are not applicable to this case. Hence, the bar of limitation is not applicable to this case. 9. Now, I come to the third issue. I find that in this case the respondent has filed the refund claim for the amount, which they paid the Service Tax to the department, but they have not received the same from their clients. Moreover, this fact has been corroborated by their balance-sheet showing that the amount is receivable from the Central Excise and Chartered Accountant has also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for claiming such refund. 17. Thus, we are of the view that in the instant case, the amount deposited by the assessee-Appellants without any authority of law cannot be considered as Service Tax. As per Article 265 of the Constitution, no tax can be collected without any authority of law. At the relevant time, there was no authority of law to collect Service Tax on the activity carried out by the assessee-Appellants. Hence, Section 11B of the Central Excise Act, 1944 is not applicable. The amount was deposited in the year 2006-07 and the refund was filed on 02nd January, 2008. Hence, the claim has been made within the period of three years prescribed by Hon ble Delhi High Court. Therefore, we are of the view that the assessee-Appellants are entitled to get the refund and the same is not hit by the limitation prescribed under Section 11B of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. 18. Moreover, it may be mentioned that the Department should not take advantage of the ignorance of the assessee-Appellants as per the ratio laid down in the case of Parekh Brothers vs CIT, 150 ITR 105 Kerala; and CIT vs Maha Laxmi Sugar Mills, 160 ITR 920 SC. 19. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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