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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 ..... ssued under the power vested with the Commissioner under Section 35E(2) of the Act. The appeal is admitted on the said substantial question of law and was heard finally by consent of the parties. 2. In order to appreciate the question of law involved in the appeal it would be necessary to deal with the chronological events involved in the said appeal. The respondent M/s. CEAT Ltd manufacturer of tyres had cleared the goods under provisional assessment for the Financial Year 19981999 and the same was finalized vide orderinoriginal No.01/0102 dated 04.06.2001 and the duty excess paid was determined at Rs. 91,59,977/. Revenue was aggrieved by the said order and filed an appeal before the Commissioner (Appeals) on the ground that the assessee had incorrectly claimed deductions on the assessable value. The Commissioner (Appeals) of the Revenue allowed the Appeal of the Revenue by order dated 04.08.2003. Being aggrieved by the said order the assessee preferred an appeal before the CESTAT and the Tribunal by order dated 28.04.2004 allowed the appeal filed by the assessee and set aside the order passed by the Commissioner dated 04.08.2003. Needless to mention tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year 9899 vide order dated 04.06.2001 passed by the then Deputy Commissioner Central Excise, Bhandup Division. 4. The Revenue issued a show cause notice dated 04.07.2003 through the Deputy Commissioner Central Excise, asking the respondent to show cause as to why the amount of Rs. 91,59,977/ erroneously refunded to them should not be recovered from them under the provisions of Section 11A(1) of the Central Excise Act, 1944 and interest at appropriate rate should not be levied and recovered from them under the provision of Section 11AB. The said show cause notice was issued on the basis that on scrutiny of records it was found that M/s.CEAT Ltd was not entitled for refund and the same should have been credited to the consumer Welfare Fund as laid down under the provisions of Section 11B(2) as the applicant i.e. M/s.CEAT Ltd has not produced any evidence to prove that they have not passed on the burden of the duty to their customers during the relevant period. The show cause notice further mentions that it appears that the deduction on account of interest on receivables is allowable only in case where the sale is on credit and the payment is realized beyond the normal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound to be prejudicial to the Revenue. According to the assessee there was no direction from the Commissioner of the Central Excise to issue such a notice. In these circumstances it was attempted to canvass that the principles of unjust enrichment are not applicable under Section 9B(5) as the statute has come into effect from 25.06.1999 and the period of assessment ended on 31.03.1999 much prior to the date. 7. The learned Tribunal considered the rival contentions and agreed with the findings recorded by the adjudicating authority in favour of assessee on both law and facts and it held, that the show cause notice being vague and containing the gist of contention, was found to be bad in law and appeal filed by the Revenue came to be dismissed and the impugned order was upheld. 8. Being aggrieved by the same present appeal is filed by the Revenue. The appeal raises the question of law as to whether bar of unjust enrichment is applicable to the provisional assessment caused before amendment in Rule 9B. At this stage it would be necessary to refer to provisions contained in the Central Excise Act, 1944 briefly. Section 11A of the Central Excise Act which is substituted in the year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade applicable where any duty and interest, if any, paid on such duty has been paid under protest. The said section then proceeds to set out in detail the procedure for granting such a refund of duty. Section 11BB which is inserted in this statute with effect from 26.05.1995 entitles an applicant to an interest at such rate not below 5% and not exceeding 30% per annum, where any duty ordered to be refunded under Section 11B is not refunded within three months from the date of application. 10. It is relevant to note that under the provisions of the Customs Act, there is provision for provisional assessment under Section 18 and the proper officer may direct the duty leviable on such goods be assessed provisionally where the importer or exporter is unable to make self assessment and makes a request in writing to proper officer for assessment or where the proper officer deems it necessary to subject any imported goods or exported goods for any chemical or other test or where the importer or exporter has produced all the necessary documents but the proper officer proposes to hold further inquiry. In such a contingency, a provisional assessment is permitted to be made if the importer an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and he would refer to a compilation of judgments, in a chronology, beginning from the judgment of the Hon'ble Apex Court in the case of Commissioner of Central Excise, Chennai V/s. T.V.S. Suzuki Ltd. 2003 (156) ELT 161 (SC). He would also place reliance on the judgment of the Apex Court in the case of CCE V/s. Allied Photographics India Ltd 2004 (166) ELT 3(SC). He also took us through the judgment of the Hon'ble Apex Court in the case of Sahakari Khadi Udyog Mandal Ltd. V/s Commissioner of C.Ex and Cus. 2005(181) E.L.T. 328 (S.C.) 12. The question as to whether the doctrine of unjust enrichment will be applicable to the refund of the duty finalized in the year 1999 but pertaining to period prior to 25.06.1999 when Rule 9B of the Central Excise Rules came to be amended is the moot question involved in the appeal. In the present case it can be seen that the period in question is 19981999 and the amendment in Rule 9B is effect from 25.06.1999. It can thus be seen that the Assistant Commissioner Central Excise on 31032003 had refunded the claim of Rs. 91,59,977/ on finalization of the provisional assessment for the year 199899 by and order dated 04.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said show cause notice is not at all sustainable for more than one reason. Since it is noted that the assessment for the period 9899 and 992000 was finalized by the Commissioner Central Excise, Bhandup on 04.06.2001 and there is no reason for reagitating the same after refund claim has been sanctioned on the provisional assessment. The Commissioner is justified in observing that the issue of unjust enrichment is not applicable to this case on account of the reason that the goods were assessed on the provisional basis and refund claimed is after finalization of the assessment as per provisions of Rule 9B(5) of the Central Excise Rule 1944. The argument of the assessee that the assessment was provisional and the credit notes were issued to the dealers and which were verified by the Range Officer before the finalization of the assessment cannot be termed as post clearance transaction found favour with the tribunal. The event of payment of excise duty is not completed till the finalization of assessment because it is only on the finalization of the assessment it may give rise to recovery of the duty short paid or if paid in excess than makes the assesse entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 104 of the judgment in the case Mafatlal Industries Ltd. (supra) states that if refund arises upon finalization of provisional assessment, section 11B will not apply. Para 104 of the said judgment does not deal with payment under protest. In the light of what is stated herein, we may now consider the judgment of this Court in the case Sinkhai Synthetics & Chemicals Pvt. Ltd. (supra). In that matter, the assessee was a manufacturer. The assessee claimed exemption which was denied by the Department. The assessee went in appeal to CEGAT. Pending appeal, assessee paid excise duty under protest. The assessee succeeded before the CEGAT and claimed refund on 17.1.1991. Refund was denied by the Department. Therefore, it was a case of payment of duty under protest. However, in the said decision, this Court applied para 104 of the judgment of the Constitution Bench in the case of Mafatlal Industries Ltd. (supra), which with respect, had no application. As stated above, para 104 of the judgment in the case of Mafatlal Industries Ltd. (supra) dealt with refund consequent upon finalization of provisional assessment. Para 104 does not deal with refund of duty paid under protest. As stated above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas in the final order of assessment, the Assessing Authority directed the Assessee to pay the differential duty. The said order was challenged before the Appellate Authority. The Appellate Authority set aside the said order and directed for redetermination of the duty payable by the Assessee. After said redetermination of the duty payable, the Assessing Authority found that the duty paid by the Assessee is in excess of what is liable to be paid under the Act. The amount was quantified. The Assessee was called upon to furnish the documents to substantiate his case. The Assessee produced the documents. Refund was sanctioned. Now, the question is whether this amount which is already refunded to the Assessee is liable to be reclaimed and credited to the Welfare Fund account. The Apex Court at Para 104 of the judgment in the case of Mafatlal Industries Ltd. v. Union of India, has clearly laid down under what circumstances a claim for refund arises under the Act, i.e. when the levy is unconstitutional or when the levy is illegal or when on the basis of the calculation made if it is found that an excess amount has been paid. It is only in those circumstances, Section 11A i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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