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TMI Blog2019 (8) TMI 1592X X X X Extracts X X X X X X X X Extracts X X X X ..... idence of tax is not acceptable as not supported by documentary evidence, therefore, refund cannot be granted to the Noticee. The CESTAT has cryptically decided the appeal which is apparent from paragraphs 6 and 7 of the impugned order. By observing that since tariff is managed by the statutory body to be followed by the gas companies and the service tax payment is provisional and therefore with the determination of final rate, a right accrues in the assessee; therefore, the limitation is to be construed accordingly. Apparently, the Tribunal glossed over the fact that the M/s GAIL had not sought a provisional assessment and it was not its case that on final assessment that there is a determination that the service tax paid is on the higher side and therefore it should revert to the receiver of service. The Tribunal has grossly erred in law in holding that the claim for refund rejected for the reason being time barred, should be treated as within time and the claims are to be processed , which deserves to be and is hereby set aside - Even shifting the burden on the department to find out as to whether the assessee has not passed the burden of tax on the final consumer cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis and vide its order No. TO/01/2010 and To/02/2010 dated 19/04/2010, the Petroleum and Natural Gas Regulatory Board has revised the Transmission Charges w.e.f. 20/11/2008. [6] The refund claimed led to issuance of show cause notice on 08/11.07.2011 observing that: (a) invoice covered in refund claim which were issued prior to 09/05/2010 are hit by time limit of one year prescribed under Section 11B of the Act of 1944. (b) No documentary proof of payment of service tax to Government account, as required under the statute has been provided. The letter dated 31/03/2011 of M/s GAIL enclosing therewith the copy of letter dated 26/11/2010 addressed to the Superintendent, Central Excise Customs Guna, can neither be equated with duty paying documents nor can be accepted as proof of payment of that portion of service tax which has been claimed as refund. Therefore, refund cannot be granted in absence of valid documentary proof of payment of service in Government account. (c) once the service provided i.e. M/s GAIL have themselves assessed their service tax liability and paid the service tax as per statutory provisions, it is not open for the service provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India, for which the appellant are claiming for refund. If the rate of transportation of gas claimed by the appellant was provisional; the Service Tax should have also been paid provisionally by M/s. GAIL. Whereas, in this case M/s. GAIL during the disputed period had paid Service Tax finally to the Govt. of India and assessed their Service Tax liability finally as per their ST-3 Returns submitted by them to the Department. Besides this, neither M/s GAIL requested for provisional assessment nor such order of provisional assessment had been issued to them, therefore, the assessment of M/s. GAIL cannot be treated as provisional. Accordingly, relevant date as provided under Section 11B(b)(d) of the Central Excise Act, 1944 for computation of time limit shall not be applicable to this case. Apart from this, the relevant date as prescribed under Section 11B(b)(d) of the Central Excise Act, 1944 is applicable to such cases where the rate of duty fixed by the Central Government by Notification in their Official Gazette to discharge duty liability for certain period and before the expiry of that period, such rates are reduced, then only the relevant date shall be the date of redu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Service Tax made for which refund had been claimed and rejected by the adjudicating authority, they had simply suggested the way of Service Tax amount for which refund claim can be verified by the Department, which is neither legal nor practical, therefore not acceptable. 6.3 I find that the appellant's contention regarding the issue of unjust enrichment is that they had already produced a Chartered Accountant Certificate attached as part of their refund claim where the factual circumstances had been clearly and fully explained by the Chartered Account and the appellant had also transferred the corresponding amount of refund claim to Service Tax recoverable from Service Tax Department . I find that the burden was on the appellant to discharge that the service tax paid by them had not been passed on to their customer on the basis of the documentary evidence upto the satisfaction of the adjudicating/ departmental authority, which they failed to do. In this context, reference is invited to the judgment of Hon'ble Supreme Court in the case of Solar Pesticides of India, reported in 2000 (116) ELT 401 (SC), wherein the Hon'ble Apex court had decided that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Accountant is to the effect that this amount is shown as receivables from the Government and not passed on to any other person. In such situation, we find that there is no applicability of concept of undue enrichment. The accounts of the appellant can be verified in this regard. [11] The first and foremost question is whether the issue relates to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment as would bar jurisdiction of this Court. It is stressfully submitted by learned counsel for the respondent that the matter related to value of the services, i.e., the respondent had paid service tax on a higher value at which the service provider, M/s GAIL raises bills which got reduced subsequently due to downward revision in the values. Respondent relies on the decision by Division Bench of Allahabad High Court in Commr. of Cus., C. Ex. Service Tax Vs. Jubilant Life Sciences Ltd: 2014 (306) ELT 212 (All.) and Division Bench judgment by High Court of Karnataka in CCE Mangalore Vs. Mangalore Refineries Petrochemicals Ltd : 2011 (270) ELT 49 (Kar.) . These decisions besides re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that it being not an importation for individual sale and profit in India, but an importation under DEEC Scheme whereunder importers are bound to re-export Emetine Hydrochloride, B.P. Grade. [12] Similar was the controversy in Jubilant Life Sciences Ltd. (supra) wherein dispute related to determination of the status of the Unit as to whether it is a EOU or a DTA as on 31/03/2011 when the duty was demanded on finished goods lying in stock. And as to rate of duty whether applicable as per Section 3(1) of the Act of 1944. It is accordance with Central Excise Tariff Act, 1985 or under proviso clause (ii), the determination of rate has to be in accordance with Customs Tariff Act, 1975 and Excise Tariff Act, 1985. And that the determination of valuation for the purposes of assessment under Section 4, read with Rules 4, 5 and 8 at the time of removal of excisable goods. And whether in case of EOU (Export Oriental Undertaking) the valuation of goods has to be done as per Section 14 of the Customs Act, 1962. Whereon it was found that all issues were intrinsically linked and connected to the adjudication of an issue falling within the scope of Section 35L of 1944 Act under which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been passed on to any other person. No such proof has been provided by them. The entry of recoverable amount of Service Tax shown in their Books of Account as per the Chartered Accountant Certificate dated 27/05/2011 of Shri Pawan Rathi does not prove that incidence has not been passed on to the ultimate buyer of their manufactured products. The fact is that the Noticee has been using the gas purchased by M/s NFL, the transportation of which was done by M/s GAIL is subjected to Service Tax and claimed to have paid Service Tax thereon the said gas were used in or in relation to manufacture of fertilizers. The said fertilizers are sold at the subsidized rates as per Government Policy and the differential cost with certain element of profit is paid by the Government to such fertilizer manufacturers. The Noticee have not provided any documentary proof to show that while working out the cost of production of their product and claiming subsidy from Government, they have not added, in the cost of production of their product, the element of Service Tax which sought to be refunded. Hence, the assertion of the Noticee that they have themselves borne the incidence of tax is not accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwent a drastic change vide Central Excises and Customs Laws (Amendment) Act 40 of 1991 (hereinafter referred to as the Amendment Act ). By the Amendment Act, the concept of unjust enrichment as undeserved profit was introduced. We reproduce herein below amended Section 11-B: 11-B. Claim for refund of duty.- (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in Section 12-A) as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty had not been passed on by him to any other person: Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section as amended by the said Act and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enacting the Amendment Act, the Public Accounts Committee recommended introduction of suitable legislation to amend the said Act to deny refunds in cases of unjust enrichment. Under the amended Section 11- B(3) of the said Act, notwithstanding anything to the contrary in any judgment, decree, order or direction of the appellate Tribunal or any Court, no refund was to be made except in accordance with Section 11-B(2) of the said Act. Further, there was substitution of sub-clause (e) to explanation B to section 11B(1) by which the original sub- clause (e) was deleted and substituted by new subclause (e) under which in cases where duty has been passed on by the manufacturer to the buyer, the relevant date for computing the period of limitation would commence from the date of purchase of goods by the buyer. At this stage, it is important to note that although sub-clause (e) as it stood prior to 20.9.1991 dealt with the period of limitation in cases of refund of duty paid under provisional assessment, the substantive provision for provisional assessment of duty was Rule 9-B. Therefore, even with the deletion of old sub-clause (e), Rule 9-B continued during the relevant period. The delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case may be, would be governed by Section 11-B. It is also made clear that if an independent refund claim is filed after the final decision under Rule 9-B(5) reagitating the issues already decided under Rule 9-B- assuming that such a refund claim lies and is allowed, it would obviously be governed by Section 11-B. It follows logically that position would be the same in the converse situation. 11. At the outset it may be pointed out that in para 104 there is nothing to suggest that payment of duty under protest does not attract bar of unjust enrichment. Para 104 only states that if refund arises upon finalization of provisional assessment, Section 11-B will not apply. 12. In the present case, reliance was placed by the respondent M/s APIL on the above para in support of its contention that payment of duty under protest and payment of duty under provisional assessment are both on account payments under the Act. We do not find any merit in this argument. As discussed, there is a basic difference between duty paid under protest and duty paid under Rule 9-B. The duty paid under protest falls under Section 11-B whereas duty paid under provisional assessment falls under Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id the excise duty under protest pending final assessment, which was ultimately decided in favour of NIIL and since NIIL had sold the product to the respondent herein, the respondent was entitled to the benefit of the second proviso to Section 11-B(1) which inter alia stated that limitation of six months shall not apply where duty had been paid under protest. We do not find any merit in this argument. In the case of Bombay Tyre International Ltd. (supra), it has been held by this Court that Section 3 of the said Act is a charging section whereas Section 4 is a computation section which covers assessment and collection of excise duty. That the basis of assessment under Section 4 was the real value of excisable goods which included manufacturing cost and manufacturing profit but excluded selling cost and selling profit. That the price charged by the manufacturer for sale of the goods represented the real value of the goods for assessment of excise duty. In the case of Atic Industries Ltd. v. H. H. Dewa, Asstt. Collector of Central Excise [AIR 1975 SC 960], this Court has held that the resale price charged by a wholesale dealer who buys goods from the manufacturer cannot be included i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see was that the price list was approved on 14.5.1983. Subsequently, there was resistance by the consumers. The Ministry of Commerce, Government of India, thereupon directed the manufacturer- assessee pursuant to a decision taken in a meeting of Manufacturers to bring down the prices to the pre 14.5.1983 level. On the basis of the same a difference in the prices arose. This led to a claim for refund. The Tribunal was of the view that the prices at the time of removal alone mattered. The subsequent reduction in the prices for whatever reason was totally irrelevant. Thereafter, the court proceeded to hold as follows: 2. We have heard the learned counsel for the assessee. Once the assessee has cleared the goods on the classification and price indicated by him at the time of the removal of the goods from the factory gate, the assessee becomes liable to payment of duty on that date and time and subsequent reduction in prices for whatever reason cannot be a matter of concern to the Central Excise Department insofar as the liability to payment of excise duty was concerned. This is the view which was taken by the Tribunal in the case of Indo Hacks Ltd. V. CCE (1986) 25 ELT 69 (T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Manufacturer B in identical facts clears the goods on the basis of self-assessment even though he is fully aware that the value of the goods which is paid is not fixed and is amenable to upward revision. He deliberately chooses not to go in for provisional assessment. Thereafter, he pleads that though he was aware that the value is not fixed and the prices on removal was tentative and was amenable to change since he has paid duty on the tentative value he is not liable to pay interest on the value of the goods on the differential duty which he is admittedly liable to pay. Is it contemplated ? [23] Their Lordships further observed:- 63. We are of the view that the reasoning of this Court in the order referring the cases to us (to this Bench) that for the purpose of Section 11AB, the expression ought to have been paid would mean the time when the price was agreed upon by the seller and the buyer does not square with our understanding of the clear words used in Section 11AB and as the rules proclaim otherwise and it provides for the duty to be paid for every removal of goods on or before the 6th day of the succeeding month. Interpreting the words in the manner contem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation may not apply. Although the buyer can also apply for refund provided the duty of excise is borne by the buyer and he had not passed on the incidence of such duty to any other person as referred to under Section 11B(2)(e) and the application has been moved within the period of six months from the relevant date of purchase of the goods by such person in terms of Section11B(5)(B)(e) of the Act. The scheme of Section 11B makes a distinction between right of the manufacturer to claim refund from right of the buyer to claim refund treating them separate and distinct for making an application for refund exercising their right under Section 11B of the Act and it has been examined by the three-Judge Bench of this Court in Commissioner of Central Excise, Mumbai-II v. Allied Photographics India Ltd. case (supra) as under:-- Therefore, Section 11-B(3) stated that no refund shall be made except in terms of Section 11-B(2). Section 11-B(2)(e) conferred a right on the buyer to claim refund in cases where he proved that he had not passed on the duty to any other person. The entire scheme of Section 11-B showed the difference between the rights of a manufacturer to claim refund and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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