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TMI Blog2018 (5) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... ective effect. The doctrine of unjust enrichment therefore would not be attracted to the refunds pertaining to the finalization of the provisional assessment for the period prior to 1999 and sub Rule 5 to Rule 9B of the Central Excise Rule, 1944 will not operate retrospectively. In the present case the period in question is 1998-99 and the assessment was finalized on 04/06/2001. Applying the aforesaid principle, the principle of unjust enrichment could not be made applicable. Appeal dismissed - decided against Revenue. - Central Excise Appeal No. 253 of 2016 - - - Dated:- 3-5-2018 - S.C. DHARMADHIKARI SMT.BHARATI H. DANGRE, JJ. Mr. Swapnil Bangur for the Appellant. ...Respondent Mr. V. Shridharan, Senior Counsel a/w Mr. Jas Sanghavi i/b PDS Legal for the Respondent. JUDGMENT : (Per Smt.Bharati H. Dangre, J) 1. The revenue has filed the present appeal challenging the judgment passed by the CESTAT, West Zonal Bench, Mumbai in Appeal No.E/310/2007 MUM thereby rejecting the appeal filed by the Revenue and holding that the bar of Unjust Enrichment is not applicable to the proceedings of provisional assessment. Resultantly the appeal filed by the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied refund claim filed by them due to finalization of the provisional assessments for the year 98 99. The Assistant Commissioner also observed that verification of records maintained by M/s. CEAT Ltd in their Bombay office revealed that Regional Office has complete data in respect of year wise total sales and the various discounts passed to the dealers and the accounts of each dealer is maintained separately and also of year-wise total discount passed by the Regional Officer maintained and tallied with the figures at the main office at the CEAT Ltd. 3. The Assistant Commissioner also observed that in the year 98 99 the assessment was made provisional as the assessee claimed various discounts from sale price as actual discount was not known to them at the time of the clearance from the factory and moreover assessee was transferring goods to various depots situated in the country and there were dealers/customers. Since, the exact quantum of various deductions claimed by the assessee was not known at the time of the clearance, the assessment for the year 98 99 was made provisional and it was then finalized. Then the Deputy Commissioner, Central Excise vide order dated 04.06.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of duty, in the light of the settled position of law, the show cause notice came to be discharged and the proceeding were dropped. Being aggrieved by the decision by the Commissioner, Appeal came to be preferred an appeal before CESTAT, on the ground that assessee has to clear the bar of unjust enrichment even in case of refund arising out of the provisional assessment. 5. Before the CEASTAT the revenue justified the issuance of the show cause notice and it placed heavy reliance on the judgment of the High Court in the case of Godrej Industries Ltd., V/s. CEE 2015 (315) ELT 192(Bom) wherein it was held that the relevant date for the purposes of limitation under Section 11A is the date of finalization of provisional assessment and since in the present case provisional assessment was on 04.06.2001 and the amendment came into effect under Rule 9A prior to the date, on the provisional assessment unjust enrichment is applicable. The Revenue submitted before the Tribunal that the adjudicating authority granting refund vide order dated 31.03.2003 had not considered issue of unjust enrichment in proper prospective. 6. The assessee supported the impugned order and submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... geable with duty to pay amount of duty along with the interest payable thereon under Section 11AA before service of notice, on the basis of his own ascertainment of such duty or on the basis of duty ascertained by the Central Excise Officer. The bar of period of one year is however not made applicable because of fraud, collusion, any willful mis statement or suppression of facts or contravention of any of the provisions of this act and the show cause notice in such cases could be issued within a period of five years from the relevant date. The relevant date defined in the explanation appended to the said section stipulates the contingencies in which the relevant date would be determined. Section 11AA contains a provision for interest on delayed payment of duty and Section11AC provides penalty for non levy or short levy of duty in certain cases. Section 11B of the Central Excise Act contains the provisions for the claim of refund of duty and any person claiming refund of duty of excise and interest, if any, paid on such duty may make an application for refund to the Assistant Commissioner or the Deputy Commissioner before expiry of period of one year from the relevant duty in the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such value as may be indicated by him, if such assessee executes a bond in the proper form with such surety or sufficient security in such amount, or under such conditions as proper officer deems fit, binding himself for payment of difference between the amount of duty as provisionally assessed and as finally assessed. Sub rule (5) of Rule 9B provides that when the duty leviable on the goods is assessed finally in accordance with the provisions of these rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short of, or is in excess of duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be. A proviso came to be appended to Sub Rule 5 with effect from 25.06.1999 which provides if an assessee is entitled to a refund, such refund shall not be made to him except in accordance with the procedure established under sub section (2) of section 11B of the Act. The issue involved in the present appeal is as to whether the provision contained in Rule 9B would be made applicable to a provisional assessment and whether the assessee will have to clear the test ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder No.CII/3033/03 WZB dated 01.12.2013 in favour of the assessee and it was decided by the CBSC not to challenge the said order and accept the order. As such the issue was finally settled in favour of the assessee and refund relatable to the deduction i.e. deduction on account of the interest receivables was held to be admissible to the assessee. On perusal of the facts it is clear that pursuant to the finalization of the provisional assessment, a claim of refund came to be made which came to be allowed by the Assistant Commissioner of Central Excise on 31.03.2003. However, on the ground that the amount sanctioned should have been credited to the consumer welfare fund as provided and on the ground that the assessee has not produced any evidence to prove that they had not passed on the incidence of duty to the customers a demand notice came to be issued to the assessee and it was alleged that the respondent M/s. CEAT Ltd has in built the element of interest on receivables in the price itself and interest is neither charged nor realized over and above the sale price of the goods. In this background it was alleged that the deduction on account of the interest on receivables claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f adjustment of duty as final assessment. Entitlement to refund would thus be known only when duty was finally adjusted. Sub clause (e) referred to limitation in cases covered by rule 9B which dealt with duty paid under provisional assessment. The said rule started with a non -obstante clause. Rule 9B(1)(a) to (c) indicated the circumstances in which the proper officer would allow provisional assessment. Rule 9B(4) dealt with clearance of goods provisionally assessed whereas rule 9B(5) dealt with adjustment of provisionally assessed duty against finally assessed duty. The said rule 9B was a complete code by itself. On compliance with the conditions therein, the proper officer was duty bound to refund the duty without requiring the assessee to make a separate refund application. The said rule, therefore, provided for making of refund. On the other hand, section 11B(1) dealt with claiming of refund by the person who has paid duty on his own accord. In this connection, section 4 of the said Act is relevant. A bare reading of section 11B(1), therefore, shows that it refers to claim for refund as against making of refund by the proper officer under rule 9B. 14. In the said jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond limitation. On appeal, the Commissioner (Appeals) observed that the bar of unjust enrichment was not applicable as the assessee claimed refund consequent upon final assessment. He allowed the refund claim. CEGAT agreed with the view of Commissioner (Appeals). Before this Court, the Department conceded rightly that in view of para 104 of the judgment of this Court in Mafatlal Industries Ltd. (supra), bar of unjust enrichment was not applicable in cases of refund consequent upon adjustment under rule 9B(5). The judgment of this Court in the case of TVS Suzuki Ltd. (supra), therefore, supports the view which we have taken herein above that refund consequent upon finalization of provisional assessment did not attract the bar of unjust enrichment. 15. The subsequent judgment of the Hon'ble Apex Court in case of Commissioner of C.EX. Banglore II V/s. ITC Limited has also dealt with the similar issue and in peculiar facts of the case their Lordship observed thus : 5. From the aforesaid material on record, it is clear that the Appellate Authority, the Tribunal and the department proceeds on the assumption that this is a case of claim for refund by the Assessee unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The refund is paid in pursuance of the finalization of the provisional assessment order and in fact, the Assessing Authority was right in holding that the doctrine of unjust enrichment does not apply in the facts of the case relying on the judgment of the Constitution Bench as well as subsequent decisions. 16. In view of the settled position of law, it is clear that the entitlement to refund and finalization of the provisional assessment under Rule 9B of the Central Excise Rules, 1944 is independent from the provisions of refund under Section 11B of the Central Excise Act, 1944. Even if the amendment made by the notification 45/99 with effect from 25.06.1999, is noted, only the procedure established under sub section 2 of Section 11B of the Central Excise Act has been made applicable to the refund arising out of the finalization of the provisional assessment under Rule 9B of the Central Excise Rules, 1944. The procedure regarding unjust enrichment of finalization of provisional assessment will be applicable to the provisional assessment made after 1999 and not before that date as the proviso to Rule 9B in the form of sub Rule 5 did not have a retrospective effect. The doctr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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