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TMI Blog2020 (11) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... Impugned order set aside - refund is to be allowed - appeal allowed - decided in favor of appellant. - CEA. No. 25/2017 - - - Dated:- 18-11-2020 - Hon ble Shri Justice Sanjay Yadav, Acting Chief Justice And Hon ble Shri Justice Vijay Kumar Shukla, Judge Shri Himanshu Shrivastava, learned counsel for the appellant Shri G. N. Purohit, learned Senior Counsel with Ms.Uma Parasar, learned counsel for the respondent ORDER Jabalpur, dated : 18.11.2020 Per : Sanjay Yadav, Acting Chief Justice. This Appeal under Section 35-G(1) of the Central Excise Act, 1944 is directed against the Final Order No.ST/A/52049/2017-CU [DB] dated 17.02.2017 passed by the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi, was admitted on 25.09.2017 on the following substantial question of law : 1. Whether in the given facts and circumstances of the case when the actual cost of transportation and material is taken by the party to arrive at the costing of product and same was recovered from their buyers then any refund claimed by the party is hit by principles of unjust enrichment or not ? 2. Whether in the given facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. (b) No documentary proof of payment of Service Tax by the service provider to the Government account had been provided by the respondent. (c) Since the service provider had not opted for provisional assessment, therefore, it is not open for them to reassess the liability of the payment of service tax. Thus neither the reduced value of services can be accepted nor can refund be granted. (d) No documentary proof had been provided by the respondent to show that incidence of tax has not been passed on to any other person. The contention of respondent that they had themselves borne the incidence of tax is not acceptable as it was not supported by documentary evidence, therefore, refund cannot be granted. As such, the claim for refund of Service Tax filed by the respondent on 04.04.2011 for ₹ 1,15,10,089/- appeared to be not admissible to them. 4. Show cause notice dated 06.06.2011 culminated into an order dated 26.09.2011 rejecting refund claim. The order of rejection was affirmed in Appeal on 26.09.2011 by the Commissioner (Appeals), Central Excise, Indore. Whereagainst in an Appeal before CESTAT, the order passed by Adjudicating Authority and the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 shall be dealt with in accordance with the provisions of sub-section (2) substituted by that Act: Provided further that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subclause (e) to explanation B to section 11B(1) by which the original sub- clause (e) was deleted and substituted by new sub-clause (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 subclause (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 deletion of subclause (e) and continuation of Rule 9-B shows that the Section 11- B (as amended) applied to claiming of ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the final decision under Rule 9-B(5) reagitating the issues already decided under Rule 9-Bassuming 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 9- B. That Section 11-B deals with claim for refund whereas Rule 9-B deals with making of refund, in which case th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L 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 in the real value of excisable goods in terms of Section 4 of the said Act. Therefore, it is clear that the basis on whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 (Trib) and it seems to us that the Tribunal s view that the duty is chargeable at the rate and price when the commodity is cleared at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 contemplated by the Bench which referred the matter would result in doing violence to the provisions of the Act and the Rules which we have interpreted. We ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the right of the buyer to claim refund as separate and distinct. Moreover, under Section 4 of the said Act, every payment by the manufacturer whether under pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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