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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 ..... by principles of unjust enrichment or not ? 2. Whether in the given facts and circumstances of the case, the Tribunal is right in law in holding that the assessments of M/s GAIL were provisional whereas infact M/s GAIL had never applied for provisional assessment nor any speaking order for provisional assessment was issued by the revenue and in the absence of any formal order there cannot be any provisional assessment and in the absence of any provisional assessment, the claim filed on 04.04.2011 beyond the period of limitation by the respondent service receiver for the period from 15.03.2009 to 15.06.2010 is time barred ? 3. Whether the Tribunal has committed an error of law in holding that the respondent is entitled for refund as there was no unjust enrichment since credit note has been issued by ignoring the law laid down by the Supreme Court in the case of M/s MRF Ltd. Vs. Commissioner of Central Excise, Madras - [1997 (92) ELT 309 (SC)] wherein it was held that the duty was chargeable on the price prevailing on the date of actual removal of goods and the subsequent reduction in the price could not create a right in favour of the assessee ?" 2. The substantial question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore CESTAT, the order passed by Adjudicating Authority and the Appellate Authority were set-aside by relying on its earlier decision in Chambal Fertilizers and Chemical Ltd. vs. CCE, Indore observing : "3. After hearing both the parties and on perusal of record, it appears that the appellant is engaged in the manufacture of fertilizer which is exempted from the duty. The appellant paid the service tax to the GAIL who authorised the appellant to receive the refund. Hence, no element of unjust enrichment. ... 5. By following our earlier decision (supra), we setaside the impugned order and remand the matter to the adjudicating authority for denovo adjudication in the light of the above observations but by providing a reasonable opportunity to the assessee to present their case with liberty to file additional evidence, if necessary, as per law." 5. Identical issue came up for consideration before the Gwalior Bench of this Court in CEA No.96/2018, wherein, while relying on the decision in Commissioner of Central Exicse, Mumbai-II vs. Allied Photographics India Ltd. (2004) 4 SCC 34 and Steel Authority of India vs. Commissioner of Central Excise, Raipur; Civil Appeal No.2562/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substituted by that Act: Provided further that the limitation of six months shall not apply where any duty has been paid under protest. (2) If, on receipt of any such application, the Assistant Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund: Provided that the amount of duty of excise as determined by the Assistant Commissioner of Central Excise under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to (a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (b) unspent advance deposits lying in balance in the applicant's account current maintained with the Commissioner of Central Excise; (c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act; (d) the duty of excise paid by the manufacturer, if he had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refunds where the burden was on the applicant to apply within time and prove that the incidence of duty has not been passed on whereas Rule 9-B covered cases of ordering of refund/making of refund, where on satisfaction of the conditions, the concerned officer was duty bound to make the order of refund and in which case question of limitation did not arise and, therefore, there was no requirement on the part of the assessee to apply under Section 11-B. Lastly, Rule 9-B referred to payment of duty on provisional basis by the assessee on his own account and, therefore, in cases where the manufacturer has been allowed to invoke this rule and refund accrues on adjustment under Rule 9-B(5) that refund is on the account of the manufacturer and not on the account of the buyer. If one reads Section 11 on one hand and Rule 9-B on the other hand, both indicate payment by the assessee on his own account and refund becomes due on that account alone. 10. In the light of what is stated above, we now quote hereinbelow para 104 of the judgment of this Court in the case of Mafatlal Industries Ltd. (supra): "104. Rule 9-B provides for provisional assessment in situations specified in clauses ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has not to comply with Section 11-B. Therefore, Section 11-B and Rule 9-B operate in different spheres and, consequently, in para 104 of the said judgment, it has been held that in cases where duty is paid under Rule 9-B and refund arises on adjustment under Rule 9-B, then such refund will not be governed by Section 11-B. In the said para, it has been clarified that if an independent refund claim is made after adjustment on final assessment under Rule 9-B(5), agitating the same issues, then such claim would attract Section 11-B. This is because when the assessee makes an independent refund claim after final orders under Rule 9-B(5), such application represents a claim for refund and, it would not come in the category of making of refund and therefore, the bar of unjust enrichment would apply. Hence, there is no merit in the contention of the respondent M/s APIL that although in this case duty was paid under protest, there was no difference between such payment and duty paid under provisional assessment under the said Act. This argument was obviously advanced because unless the two payments are equated as contended, the respondent M/s APIL was required to comply with Section 11-B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turer claims refund is different from the basis on which a buyer claims refund. The cost of purchase to the buyer consists of purchase price including taxes and duties payable on the date of purchase (other than the refund which is subsequently recoverable by the buyer from the Department). Consequently, it is not open to the buyer to include the refund amount in the cost of purchase on the date when he buys the goods as the right to refund accrues to him at a date after completion of the purchase depending upon his success in the assessment. Lastly, as stated above, Section 11-B dealt with claim for refund of duty. It did not deal with making of refund. 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 protest or under prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not on the price reduced at a subsequent date is unexceptionable. Besides as rightly observed by the Tribunal the subsequent fluctuation in the prices of the commodity can have no relevance whatsoever so far as the liability to pay excise duty is concerned. That being so, even if we assume that the roll back in the price of tyres manufactured by the appellant Company was occasioned on account of the directive issued by the Central Government, that by itself, without anything more, would not entitle the appellant to claim a refund on the price differential unless it is shown that there was some agreement in this behalf with the Government and the latter had agreed to refund the excise duty to the extent of the reduced price. That being so, we see no merit in this appeal brought by the assessee and dismiss the same with no order as to costs." 36. We have noticed that in this case admittedly that at the time goods were removed the price was not fixed. The Assessee was fully conscious of the fact that it was subject to variation. Assessee must be imputed with knowledge that the value it was declaring was amenable to upward revision. The circumstances were indeed clearly both apposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n an assessee in similar circumstances resorts to provisional assessment upon a final determination of the value consequently, the duty and interest dates back to the month "for which" the duty is determined. Duty and interest is not paid with reference to the month in which final assessment is made. In fact, any other interpretation placed on Rule 8 would not only be opposed to the plain meaning of the words used but also defeat the clear object underlining the provisions. It may be true that the differential duty becomes crystalised only after the escalation is finalized under the escalation clause but it is not a case where escalation is to have only prospective operation. It is to have retrospective operation admittedly. This means the value of the goods which was only admittedly provisional at the time of clearing the goods is finally determined and it is on the said differential value that admittedly that differential duty is paid. We would think that while the principle that the value of the goods at the time of removal is to reign supreme, in a case where the price is provisional and subject to variation and when it is varied retrospectively it will be the price even at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was on his own account. The accounts of the manufacturer are different from the accounts of a buyer (distributor). Consequently, there is no merit in the argument advanced on behalf of the respondent that the distributor was entitled to claim refund of "on-account" payment made under protest by the manufacturer without complying with Section 11-B of the Act." It was further held as under:-- "Having come to the conclusion that the respondent was bound to comply with Section11B of the Act and having come to the conclusion that the refund application dated 11-2-1997 was time-barred in terms of Section 11B of the Act, we are not required to go into the merits of the claim for refund by the respondent who has alleged that it has not passed on the burden of duty to its dealers." [25] When the findings, rather conclusions only, in paragraph 6 of the impugned judgment are tested on the anvil of above analysis, it leaves no iota of doubt that 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. [2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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