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TMI Blog2009 (2) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... he following issue:- "Whether, refund of customs duty arising out of finalization of provisional assessment, in terms of provisions of Section 18 of the Customs Act, relatable to the period prior to 13-7-2006, when the provisions of Section 18 were amended, would attract the provisions of unjust enrichment or not". 2. M/s. Hindustan Zinc Ltd. became entitled to a refund of Rs. 14,37,016/- on finalization of provisional assessment of Bill of Entry in respect of imported goods. The refund was credited to the Consumers Welfare Fund on the ground that the appellant could not establish that duty liability has not been passed on to the buyers as required under Section 27 of the Customs Act 1962. The Commissioner (Appeals) allowed the appeal filed by the respondents holding that refund is arising as a consequence of finalization of provisional assessment order passed by the Assistant Commissioner relying upon the decision of the Tribunal in Tecil Chemicals and Hydro Power Ltd. v. CCE, Cochin and in the case of Oriental Exports v. Commr. of Customs New Delhi [2001 (127) E.L.T. 578 (Tri. Del.)] and also the decision of the Apex Court in Mafatlal Industries case. The Revenue filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificatory in nature and hence Rule 9B has to be read in consonance with amended provision of Section 11B (Refer Para 26 27 of the Order). (f) In the case of TVS Suzuki Ltd. refund accrued in 1996 and refund claim on 5-7-96 i.e. prior to amendment of Section 11B. The Apex Court was neither called upon to consider the scope effect of said amendment nor was it relevant in that case. Whereas in this case, the refund has arisen on 11-11-97 (after amendment of Section 27 providing relevant date for provisional assessment cases vide Explanation I upto 1-8-98 and Explanation II w.e.f. 1-8-98). Even in a Central Excise case, TVS case was rightly distinguished in case of Standard Drum by Hon'ble Bombay High Court (Para 29 of order). (g) In Allied Photographic's case also the period considered/examined by Apex Court was 1974-1984 i.e. prior to amendment of Section 11B and Rule 9B and therefore the "making of refund" and "Claiming of refund" were taken differently. (h) Prior to amendment, Section 11B and Rule 9B were not pari materia with Sections 27/18 of Customs, inasmuch as the lacuna found in Central Excise law was not there in Customs law. Hence the decision of Allied Photograph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersal application by its very nature. He relied upon the decision of the Hon'ble Supreme Court in Sahakari Khand Udyog Mandal Ltd. v. CCE reported in 2005 (181) E.L.T. 328 (S.C.). He also relied upon CCE, Mumbai v. Standard Drums and Barrels Mfg. Co. [2006 (199) E.L.T. 590 (Bom.) in support of his contention that refund arising as a result of finalization of provisional assessment is governed by Section 11B. 6. Shri Sridharan, Ld. Advocate arguing for the respondents submitted as under:- (a) Before it was amended on 20-9-1991, Section 11B of the Act had this provision under Section 11B(1)(B)(e) "in the case where duty of excise is paid provisionally under this Act or the rules made there under, the date of adjustment of duty after the final assessment thereof". He submits that Hon'ble Supreme Court in CCE Mumbai v. Allied Photographics India Ltd. case [2004 (166) E.L.T. 3 (S.C.)] after considering the fact that before amendment in 1991, the Proviso related to provisional assessment existed in Section 11B and after considering the provisions of Section 11B and Rule 9B provided for suo motu payment of refund on finalization of assessment by the assessing officer, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this, he submits that the Larger Bench is bound by the decision of the Hon'ble Gujarat High Court. 7. We have considered the submissions made by both the sides in detail. 7.1 Before we proceed further, the relevant provisions under Central Excise and Customs are proposed to be discussed:- Prior to its amendment in 1991, Section 11B did not have any provision for denial of refund on the ground of unjust enrichment. Further the Section also provided that relevant date in a case where duty of excise paid provisionally in the Act or the Rules made there under, shall be the date of adjustment of duty after the final assessment thereof. Rule 9B during the relevant time also provided that the duty provisionally assessed shall be adjusted against the duty finally assessed and if the duty provisionally assessed fell short of, or in excess of duty finally assessed, the assessee shall be required to pay or be entitled to refund as the case may be. When Section 11B was amended in 1991 and provision relating to unjust enrichment was introduced, the clause relating to provisional assessment as regards relevant date in Section 11B was omitted. It was re-introduced in 1-8-1998 in Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of the proviso. However, even in such cases, the person claiming refund had to pay the duty under protest in terms of prescribed rules. A bare reading of Section 11B(1), therefore, shows that it refers to claim for refund as against making of refund by the proper officer under Rule 9B. 7.3 The conclusion that emerges from the decision of the Apex Court in the Allied Photographics case is that even prior to 1991 when Section 11B had the provision relating to provisional assessment, the refund claim arising after final adjustment and was not a part of finalisation wherein the assessing officer was required to make the refund suo motu, there was a need for making a refund claim under Section 11B. Since this decision was not considered by the Hon'ble Bombay High Court in Bussa Overseas case, we see considerable force in the arguments advanced by the Ld. Advocate for the respondents that even when Section 27 had the provisions relating to provisional assessment, prior to the period when Section 18 was not amended i.e. prior to 2006 to incorporate the provisions of unjust enrichment, the provisions relating to unjust enrichment would not apply unless refund arises after the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue that such amendment has to be understood as clarificatory in nature. This is more so, when one reads the amendments made in 1998 and the amendment made in Rule 9B of the Central Excise Rules in 1999 considering the pronouncement of the Apex Court as to the distinction between making of a refund and claiming of a refund; the amendment cannot be considered to be retrospective in nature; and cannot be made applicable to pending proceedings." The Hon'ble High Court observed that amendment is not clarificatory in nature and amendments are to be considered in the light of the pronouncements of the Apex Court as to the distinction between making of the refund and claim of the refund. Therefore, the High Court came to the conclusion that when provisional assessment is finalized, the assessee is entitled to refund and he does not have to make the claim. Therefore, the provisions of Section 27 is not attracted. 7.5 Another point that goes in favour of the respondent is that unlike Rule 9B which is a part of subordinate legislation and therefore cannot be preferred to Section 11B which is part of the main act, Section 18 and Section 27 are part of the Customs Act and neither is subo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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