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TMI Blog2021 (4) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Tribunal - Appeal dismissed and the substantial questions of law framed are answered against the assessee. - Civil Miscellaneous Appeal No.2898 of 2014 - - - Dated:- 18-3-2021 - Honourable Mr.Justice T.S.Sivagnanam And Honourable Ms.Justice R.N.Manjula For the Appellant : Mr.T.Ramesh For the Respondent-2 : Mr.T.Pramod Kumar Chopda, SSC JUDGMENT T.S.SIVAGNANAM,J. This appeal filed, by the assessee under Section 35G of the Central Excise Act, 1944 (for short, the Act), is directed against the order dated 03.1.2014 in Final Order No.40163/2014 passed by the first respondent namely the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai (for brevity, the Tribunal). 2. We have elaborately heard Mr.T.Ramesh, learned counsel appearing for the appellant and Mr.T.Pramod Kumar Chopda, learned Senior Standing Counsel appearing for the second respondent. 3. This appeal is admitted to decide the following substantial questions of law : i. When Second Proviso to Section 11B(1) has not at all barred the applicability of the protest lodged by the manufacturer to the refund claim made by the buyer and it simply states t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd filed their claim on 22.7.2003 for refund of central excise duty to the tune of ₹ 23,14,715/-. The assessee also stated that they had not passed on the duty liability to its customers, as the goods involved were capital goods and no duty was payable on the final product, for which, such goods were used. 6. Thereafter, the Adjudicating Authority namely the Assistant Commissioner of Central Excise, Madurai-II Division issued a show cause notice dated 20.10.2003 proposing to disallow the refund claim on three grounds namely (i) that the assessee had not produced the original duty paid document; (ii) that the assessee did not produce the original letter of protest made by the supplier namely the said M/s.Fenner India Ltd.; and (iii) that the assessee did not produce any evidence to show that the duty burden was not passed on to the customer. 7. The assessee, vide letter dated 28.10.2003, sought time to file their reply. However, the reasons assigned therein were appeared to have been not acceded to and an ex parte Order-in-Original No.47/2003 (Refund) came to be passed on 20.11.2003 by the Deputy Commissioner of Central Excise, Madurai II Division, Madurai disallowing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt by judgment dated 16.12.2006 by applying the decision of the Three Judges Bench of the Hon ble Supreme Court in the case of Commissioner of Central Excise Vs. Allied Photographics India Ltd. [reported in (2004) 166 ELT 3]. A review application was filed by the said assessee namely South Eastern Coalfields Ltd., in R.P.(C).No.333 of 2006, which was allowed on 23.7.2007 setting aside the earlier order dated 16.12.2006 and restoring Civil Appeal No.7625 of 2005 to its original number and after admitting the appeal, it was directed to be tagged along with Civil Appeal No.807 of 2006, which was filed by the said M/s.Western Coalfields Ltd. 11. It is submitted by the learned counsel for the appellant that the review application was allowed after considering the submission of the assessee that the decision of the Hon ble Supreme Court in the case of Allied Photographics India Ltd., would not apply to the facts and circumstances of the case. It is further submitted that ultimately, Civil Appeal No.807 of 2006 filed by M/s.Western Coalfields Ltd., and Civil Appeal No.7625 of 2005 filed by M/s.South Eastern Coalfields Ltd., and other similarly placed assessees were di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was held that if duty was paid by a manufacturer under protest, then the limitation of six months would not apply even to a claim for refund by the purchaser. This decision was rendered by referring to the First Proviso to Section 11B of the Act, which was worded in a manner covering all claims for refund either by the manufacturer or the purchaser. In this regard, Rule 233B of the erstwhile Central Excise Rules, 1944 was also referred to. Therefore, it is submitted that this decision has to be applied to the case of the appellant assessee. 16. We have given our anxious consideration to the above submissions. But, we are not inclined to accept the same for several reasons. 17. Firstly, the decision of the Hon ble Supreme Court in the case of Allied Photographics India Ltd., arose out of a reference to a Larger Bench on account of an inconsistency between two decisions of the Three Judges Bench of the Hon ble Supreme Court in the cases of of Sinkhai Synthetics and Chemicals Pvt. Ltd. Vs. Collector of Central Excise [reported in 2002 (143) ELT 17] and Collector of Central Excise, Chennai Vs. T.V.S. Suzuki Ltd. [reported in 2003 (156) ELT 161] on the one hand and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of National Winder. It was further submitted that Section 11B of the Act was not at all attracted and that during the relevant period, the Department insisted upon the said M/s.New India Industries Ltd., for paying excess duty on the footing that M/s.Allied Photographics India Ltd., was related to M/s.New India Industries Ltd. In the facts and circumstances of that case, the said M/s.New India Industries Ltd., paid duty under protest and ultimately after finalization of the assessment, the duty paid became refundable. It was also submitted that if any amount was found to be repayable by the Department to the assessee therein, then the amount had to be refunded without going through Section 11B of the Act. In this regard, reliance was placed on the decision of the Hon ble Supreme Court in the case of Commissioner of Central Excise Vs. National Tobacco Co. of India Ltd. [reported in 1978 (2) ELT J146]. It was also submitted that the same principle was applicable in cases where the Department had to refund monies to the assessee on finalization of the assessment, which principle had been reiterated in the decision of the Hon ble Supreme Court in the case of M/s.Mafa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 11B. Therefore, Section 11B and Rule 9B 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 9B and refund arises on adjustment under Rule 9B(5), then such refund will not be governed by Section 11B. In the said para, it has been clarified that if an independent refund claim is made after adjustment on final assessment under Rule 9B(5), agitating the same issues, then such claim would attract Section 11B. This is because when the assessee makes an independent refund claim after final orders under Rule 9B(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 11B. In this matter, duty has been pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferent 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 11B dealt with claim for refund of duty. It did not deal with making of refund. Therefore, Section 11B(3) stated that no refund shall be made except in terms of Section 11B(2). Section 11B(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 11B 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 provisional assessment was on h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as to why the refund claim should not be rejected for non-compliance of Section 11B. By order dated 17.7.1996, the refund claim was rejected on the ground that it was 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. Mr. Ganesh, learned senior counsel appearing on behalf of the respondent vehemently urged that the issue arising in the present matter is squarely covered by the decision of Division Bench of this Court in the case of National Winder Vs. Commissioner of Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of National Winder was held to be per incuriam in the light of the reasons assigned in the decision of the Hon ble Supreme Court in the case of Allied Photographics India Ltd and in this regard, we may point out that paragraphs 12 and 14 are a clear answer to the argument, which has been placed before us by referring to the decision of the Hon ble Supreme Court in the case of National Winder, which was held to be a judgment in per incuriam. 22. The above aspect was taken note of by the Hon ble Supreme Court while deciding the case of Western Coalfields Ltd. It is a case identical to that of the assessee herein. In fact, the Tribunal, in the impugned order, followed its earlier decision in the case of Western Coalfields Ltd. The Hon ble Supreme Court, after noting the facts of the case, held that the period for which, the refund of excise duty has been claimed, differed, but in all cases, applications had been filed by the buyer (assessee herein) much after the period of limitation, which was six months from the date of purchase of goods at the time of filing of the application to claim refund under Section 11B of the Act. Thereafter, the Supreme Court pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 11B of the Act. It was further held as under: Having come to the conclusion that the respondent was bound to comply with Section 11B 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. 13. It may be appropriate to notice that the view earlier expressed by the twoJudge Bench of this Court in National Winder Vs. Commissioner of Central Excise, Allahabad 2003 (11) SCC 361 was held to be per incuriam in Commissioner of Central Excise, MumbaiII Vs. Allied Photographics India Ltd. case(supra). 14. In the instant case, indisputedly the application was filed by the appellant as a buyer of the goods(conveyor belts) from M/s. Fenner (India) Ltd. who paid the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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