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TMI Blog2024 (7) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... duty in toto in comparison to the appellant who pays an amount equal to 7.5 percent or 10 percent as the case may be. It appears that before 06.08.2014,the payment of total duty demanded, during the pendency of the appeal, to exercise the right to appeal, would not take away the character of being a deposit from the sums deposited during the pendency of the appeal, under Section 35F or for that matter Section 35L as both fall under Chapter VIA. CBEC vide Circular No 984/08/2014-CX, dated 16.09.2014, issued vide F. No.390/Budget/1/2012-JC clarified that any payment made during investigation shall be counted as part of pre-deposit during the filing of appeal in Central Excise Service Tax matters. The issue as to whether the amount of duty deposited during the pendency of appeal amounts to pre-deposit was deliberated by tribunal and Courts in several Cases. Hon ble Supreme Court in the context of the Maharashtra VAT Act, 2002, in the matter of VVF (India) Ltd Vs State of Maharashtra, [ 2021 (12) TMI 477 - SUPREME COURT] , held that amount pre-deposited under protest prior to assessment order was required to be included in computing amount of mandatory pre-deposit. Hon ble High Court o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de only under First proviso to Section 35F. This difference was obliterated by the amendment w.e.f. 06.08.2014 prescribing a uniform pre-deposit, under Section 35F, as percent of duty or penalty confirmed, as a pre-condition for appeal and providing for payment of interest, under Section 35FF, for all deposits made under 35F. Whether the provisions of Section 11B and the doctrine of unjust enrichment are applicable to such payments? - HELD THAT:- In the instant case, the amount was deposited by the appellants consequent upon the order passed by the Commissioner (Appeals); as both CESTAT and Hon ble Apex Court declined to grant stay of the amounts involved, the appellants continued to pay the amount under protest, on the clearances of clinker made by them for captive consumption. Till 2015, the matter was under litigation and therefore, the amount deposited, to exercise the right to appeal, has to be treated as deposits made under Section 35F and Section 35L - The question involved in the instant case is as to whether the refund of pre-deposit is subject to the rigors of unjust enrichment and as to whether the presumption that incidence of duty has been passed on is applicable and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the appellants are eligible for interest on the delayed refund of amounts deposited by them after 06.08.2014. Appeal allowed in part. - MR. S. S. GARG, MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri J.C. Patel, Shri Ankit Awal, Advocate for the Appellant Shri Saurabh Goel (Special Counsel), Shri Siddharth Jaiswal and Shri Aneesh Dewan, Authorised Representatives for the Respondent ORDER These appeals are filed by M/s ACC Ltd. (Appeal No. E/60736/2019) and M/s Ambuja Cement Ltd. (E/60830/2019) against the impugned orders dated 28.03.2019 and 24.04.2019/ 10.05.2019 respectively. As the issue involved in both the cases is identical, the appellants were heard together and taken up for consideration together. 2. Briefly stated the facts of the cases are that the appellants are engaged in the manufacture of clinker which is captively used in the manufacture of cement; the appellants claimed exemption, from payment of excise duty on cement, in terms of Notification No.50/2003-CE dated 10.06.2003; the appellants also claimed exemption, on clinkercaptively consumed in the manufacture of cement, under the Notification No.67/95-CE dated 16.03.1995 (M/s ACC Ltd. from Fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F is not hit by bar of unjust enrichment; when the exemption under Notification No.67/95-CE was denied to the appellant, the appellant preferred appeals before Commissioner(Appeals), CESTAT and the Hon ble Apex Court; as no stay was granted by any authority, the appellant has deposited an amount equivalent to the duty payable, under protest, on the clinker captively consumed; the appellants were required to pay the amount for continuing the hearing/ appeal before Commissioner(Appeals), CESTAT; appellants were also required to deposit the same during the pendency of the appeal before Hon ble Supreme Court in terms of Section 35L of Central Excise Act, 1944. He submits that it was held in C.C. (Preventive) Vs Ghaziabad Ship Breakers Ltd. 2010 (259) ELT 522 (Guj.) that amount deposited during the pendency of an appeal before the Hon ble Supreme Court would squarely fall within the ambit of the Section 129E of the Customs Act, 1962, which is parimateria with the provisions under Central Excise. He also submits that Courts and Tribunals have been continuously holding that amount deposited during the pendency of adjudication proceedings or investigation is in the nature of deposit made u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, that merely charging of the duty paid to the Profit and Loss Account is not a relevant factor for determining unjust enrichment; it is settled law that debit of the amounts to expenses, without corresponding increase in the price, means that the appellant has observed and borne the said amount and it cannot lead to the conclusion that the appellant has passed on the incidence thereof. He relies on the following: CCE v Flow Tech Power-2006 (202) ELT 404 (Mad) Elantas Beck India Ltd v CCE 2016 (339) ELT 325 Birla Corporation Ltd v CCE 2008 (231) ELT 482 Bharat Kumar Indrasen Trading P. Ltd v CC-2018 (2) TMI 1574: Shyam Coach Engineers v CCE - 2024 (1) TMI 245. 6. Learned Counsel submits further that even if it is assumed that the amounts deposited by the appellant takes the colour of Duty , still the appellants satisfied the test of unjust enrichment; it is evident from the C.A. certificate dated 12.05.2017, the sale price of cement are market-driven in various States and the appellants do not have ability to control the sale price or the marginby passing on the duty to the customers; the pre-deposit pertains to only one plant whereas cement is manufactured by the appellants in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en though,Section 35FF was introduced w.e.f. 10.05.2008, the appellant is entitled to interest,@ 12%, even for the period before 10.05.2008 as held by the Hon ble Apex Court in the case of CCE Vs ITC Ltd. 2005 (179) ELT 15 (SC). The above decision of the Hon ble Supreme Court was followed by the following cases: Bharat Petroleum Corporation Ltd. 2018-TIOL-1217-CESTAT-Bang. Madura Coats P. Ltd v CCE-2012 (285) ELT 188 (Cal) Sony Pictures Networks India P. Ltd v UOI: 2017 (353) ELT 179 (Ker) Shree wood Products P. Ltd v CCE-2016 (340) ELT 79 (P H) 9. Shri Sourabh Goyal, Senior Standing counsel CBIC, special counsel for the Revenue, takes the bench through the provisions of Section 35F of Central Excise Act, 1944 and submits that the appellants have not made deposit in terms of Section 35F but have paid the duty on manufacture of clinker as per the order dated 24.06.2005, after dismissal of their appeal by the Hon ble Tribunal; the amount was paid in terms of Section 35N ibid; amount paid under Section 35 N is not a pre-deposit but is payment of duty; the appellant has availed the Cenvat credit on the inputs used in manufacture of Clinker (Cenvat Credit can be claimed only on the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit on the inputs used in manufacture of Clinker (Cenvat credit can be claimed only when duty is paid) and on the other claimed that the amount was being deposited under protest; the stand taken by the appellants is self-contradictory. He submits that further, the appellants in their balance sheets have shown the clinker captively consumed under the heading manufacturing expenses other expenses which includes the amount claimed as refund in their profit loss account for the relevant periods i.e. the appellants have accounted the amount of duty paid as an expenditure in their profit loss account for year 2005 to 2013 and not as the amounts as receivable in the financial statements. 11. Learned Special Counsel submits in addition that as per Section 12B read with Section 11B of the Central Excise Act, 1944, the burden of proof is on the appellant to prove that the incidence has not been passed on to the consumers; as per Section 12B, the presumption is that if the excise duty is paid it shall be deemed that the incidence of duty has been passed on to the consumer, unless it is proved that the burden of duty has not been passed on to the ultimate consumers; the appellant failed to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 35F gives an understanding that the amount deposited pending appeal before Hon ble Supreme Court is also a pre-deposit under Section 35F; it is settled law that the scope of main provision/ section is governed by the plain language of the main provision/ section and proviso cannot control the main provision/ section; there is no necessity for the proviso to confer power on the Hon ble Supreme Court to dispense with pre-deposit and to grant stay as the power already vests with the Hon ble Supreme Court under Order XX(1) of the Supreme Court Rules, 1966 and Order XVII (2) of the Supreme Court Rules, 2013 which provide that in any case under appeal to the Hon ble Supreme Court, the Court may subject to such terms and conditions as it may think fit to impose grant stay. 14. Learned Counsel for the appellants submits further that the contention of the Special Counsel that Section 35FF provides for interest only on refunds of amounts deposited pursuant to orders of the Commissioner (Appeals) and Tribunal under First Proviso and not on amounts deposited pending appeal before Hon ble Supreme Court is incorrect; even the amount deposited during the appeal before Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manded as per the order of the first appellate authority; for exercising their right of appeal before Supreme Court, under Section 35L, which also falls under Chapter VIA, the appellants had to continue pre-deposit the duty as the as Hon ble Supreme Court did not grant any stay. Therefore, the amount paid by them, under protest, during the pendency of the appeal at tribunal and the Apex Court is a deposit for the purposes of Section 35Fof Central Excise Act,1944 and therefore, not hit by bar of unjust enrichment. The appellant further submits that the original authority held that once the commissioner (appeals) dismissed the appeal, the amounts pre-deposited lost the character of pre-deposit and acquired the character of duty and hence refund was subject to bar of unjust enrichment; the first appellate authority has not examined the appellants plea that the duty paid by them is in the nature of deposit and hence not subject to the rigors of unjust enrichment; he has proceeded on the premise that unjust enrichment is applicable; as the appellants debited the amounts to profit and loss account and thus, the appellants have passed on the incidence of duty to their customers. 16. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 12B read with Section 11B of the Central Excise Act, 1944. We find that the learned Commissioner (Appeals) has not appreciated the submission of the appellants that the impugned case is of refund of amount deposited under Section 35F and hence, is not hit by the provisions of Section 11B. 18. The following is the gist of the arguments on behalf of the department. the appellants have not made deposit in terms of Section 35F but have paid the duty on manufacture of clinker as per the order dated 24.06.2005; after dismissal of their appeal by the Hon ble Tribunal; the amount was paid in terms of Section 35N ibid; amount paid under Section 35 N is not a pre-deposit but is payment of duty; the appellants have availed the Cenvat credit on the inputs used in manufacture of Clinker (Cenvat Credit can be claimed only on the duty incidence on final products) and on the other hand have claimed that the amount was being deposited under protest; the stand taken by the appellant is self-contradictory; Order in Original rejecting the claim for refund was passed on 16.09.2016, whereas the appellant had procured CA certificate on 12.05.2017 i.e. after the date of order in original; it clearly sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequently, there can be no rational basis to deny interest under Section 35FF; if the contention of the department is accepted, interest @ 12% Per Annum requires to be paid as per the judgment of the Hon ble Supreme Court in the case of ITC Ltd. which was followed by Tribunal in the case of Parle Agro Pvt. Ltd.-20222 (380) ELT 219, for the period post 10.05.2008, the appellant is entitled to interest under Section 35FF. 20. On going through the records of the case and the rival contentions, we find that the following are the issues that require our consideration in the instant case. (i) Whether the duty continued to be paid by the appellants, under protest, during the pendency of the appeal qualifies to be pre-deposit for the purposes of Section 35F of Central Excise, Act, 1944? (ii) Whether the provisions of Section 11B and the doctrine of unjust enrichment are applicable to such payments? (iii) Whether the appellants are eligible to claim interest on the amount duty paid or deposited? and if so, at which rate? 21.. We find that it will be beneficial to have a look at the provisions of Section 35F of the Central Excise Act, 1944. Section 35F, as it existed prior to 06.08.2014,is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against; (iii) against the decision or order referred to in clause (b) of sub-section (1) of section 35B, unless the appellant has deposited ten per cent. of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against: Provided that the amount required to be deposited under this section shall not exceed rupees ten crores: Provided further that the provisions of this section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No.2) Act, 2014. Explanation. - For the purposes of this section duty demanded shall include, - (i) Amount determined under Section 110; (ii) Amount of erroneous CENVAT credit taken; (iii) Amount payable under Rule 6 of the CENVAT Credit Rules, 2001 or the Cenvat Credit Rules, 2002 or the CENVAT Credit Rules, 2004 22. It appears from the above, that prior to 06.08.2014, a person who desires to prefer any appeal, against the order of any adjudicating authority, had to dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of Rs 10 crores, can be considered to be deposit made towards fulfilment of stipulation under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962. Any shortfall from the amount stipulated under these sections shall have to be paid before filing of appeal before the appellate authority. As a corollary, amounts paid over and above the amounts stipulated under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962, shall not be treated as deposit under the said sections. 3.2 Since the amount paid during investigation/audit takes the colour of deposit under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962 only when the appeal is filed, the date of filing of appeal shall be deemed to be the date of deposit made in terms of the said sections. 3.3 In case of any short-payment or non-payment of the amount stipulated under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962, the appeal filed by the appellant is liable for rejection. 24. We find that during the impugned period i.e. 2005-2015, the appellants continued to pay duty under Protest and indicated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proper officer. Under the section such amount has to be paid by such person on his own and does not require any order to be passed before making such deposit. Deposit of the said amount is a pre-condition for entertaining the appeal. What is important to note is that the amount to be deposited before the appeal can be entertained on merits is nothing else but the amount of duty and/or interest, or penalty demanded in consequence of an order-in-original. In principle the deposit is of duty or interest or penalty. The term pre-deposit is conveniently used to denote payment before entertaining the appeal. It is only a mode of payment prescribed by legislature with an intention to protect interest of Revenue. 7. However, if the person desirous of preferring appeal seeks waiver of the pre-deposit on the ground of undue hardship as contemplated under sub-section (2) of Section 129E, he is required to file an application seeking dispensation of such deposit, in which case he is required to make the pre-deposit in terms of the order that may be passed by the Commissioner (Appeals) or the Appellate Tribunal. Thus, the contention that it is only the payment made pursuant to any order of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Department long after the completion of assessment and clearance of the imported goods pending its appeals before the Hon ble Supreme Court cannot be said to be a duty for the purpose of Section 27 of the Customs Act, 1962. Therefore, presumption under section 28D of the Customs Act, 1962 that the incidence of duty paid has been passed on to the buyer cannot be inferred. 90. Amounts paid pursuant to an adverse order passed under Section 28 of the Customs Act, 1962 whether under Section 129E or under Section 131 of the Customs Act, 1962 are not duty for the purpose of Section 27 of the Customs Act, 1962. 91. In Union of India v. Suvidhe Ltd., (2016) 11 SCC 808, the Hon ble Supreme Court held that provisions of Section 11B can never be applicable for refund of the amount deposited by way of pre-deposit under Section 35F for availing the remedy of an appeal. It must be recalled that Section 11B of the Central Excise Act, 1944 is parimateria with Section 27 of the Customs Act, 1962. 92. The Court further held that a deposit under Section 35F (which is parimateria with Section 129E of the Customs Act, 1962) is not a payment of duty but only a pre-deposit for availing the rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not evoke resonance from us. It would not be wrong to posit that pre-deposit is contingent not upon orders of the Tribunal but on carrying disputes to the Tribunal. 13. It is consistent with this provision that, while an aggrieved person may have the right impugn the order causing grievance, the sanctity of the order remains unimpaired unless stayed by the appellate authority. The purpose of the proviso in Section 129E of Customs Act, 1962 is to forestall initiation of recovery proceedings during the pendency of appeal and for pre-deposit to be restricted as designating only those that are in compliance with such conditions, as may be prescribed for grant of stay, would that inconsistent with the intent. This has been articulated by a Larger Bench of the Tribunal in Haldiram India Pvt. Ltd. v. Commissioner of Central Excise, Delhi [2014 (309) ELT 81 (Tri. - LB)] thus 6 . As a consequence of the amendment (substitution) of Section 35F w.e.f. 6-8-2014 the earlier requirement under provision (of having to deposit the entirety of the adjudicated liability subject of waiver, either wholly or pro tanto of the pre-deposit by the Tribunal on exercise of discretion) was repealed and a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of payment prescribed by legislature with an intention to protect interest of Revenue. However, if the person desirous of 7. preferring appeal seeks waiver of the pre-deposit on the ground of undue hardship as contemplated under sub-section (2) of Section 129E, he is required to file an application seeking dispensation of such deposit, in which case he is required to make the pre-deposit in terms of the order that may be passed by the Commissioner (Appeals) or the Appellate Tribunal. Thus, the contention that it is only the payment made pursuant to any order of any appellate authority or judicial forum under Section 129E or section 131 of the Act would fall within the ambit of pre-deposit under the said provision is fallacious and contrary to the provisions of the section itself and as such does not merit acceptance 16. In view of the specific provision of Section 129E of Customs Act, 1962, as elaborated by us, and the several decisions cited supra, the position adopted in the impugned order that the original authority was, in discarding the claim of the appellant that the payment of differential duty was pre-deposit, is not incorrect cannot be affirmed by us as legal and proper. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be raised by the Revenue at this stage and this issue has also answered in favour of the assessee. 30. Madras High Court in the case of CCE, Coimbatore vs. Pricol Ltd (Supra) held that 7. The first question of law, which is raised, relates to the plea of unjust enrichment and much emphasis is laid on the decision of the Supreme Court in Mafatlal Industries case [1997 (89) ELT 247 (SC)]. Relevant portion of the order passed by the Supreme Court in Mafatlal Industries case (supra) has been extracted in the grounds (b) and (c). There is no dispute with regard to the proposition of law as laid down by the Supreme Court. In the present case, as is evident from the records, it is not a case of refund of duty. It is a pre-deposit made under protest at the time of investigation, as has been recorded in the original proceedings itself. In this regard, it has to be noticed that it has been the consistent view taken by the Courts that any amount, that is deposited during the pendency of adjudication proceedings or investigation is in the nature of deposit made under protest and, therefore, the principles of unjust enrichment does not apply. The above said view has been reiterated by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny other person, refund cannot be allowed. Court held it is not a case of refund of duty but return of pre-deposit made by assessee at the time of investigation under protest . Court has said as under: There are also very many judgments of various Courts, which have also reiterated the same principles that in case any amount is deposited during the pendency of adjudication proceedings or investigation, the said amount would be in the nature of deposit under protest and, therefore, the principles of unjust enrichment would not apply. In view of the catena of decisions, available on this issue, this Court answers the first substantial question of law against the Revenue and in favour of the assessee. 5 . Madras High Court in Commissioner of Central Excise v. Pricol Ltd. (supra) relied on a Bombay High Court judgment in Suvidhe Ltd. v. Union of India - 1996 (82) ELT 177 (Bom.); Gujarat High Court judgments in Commissioner of Customs v. Mahalaxmi Exports - 2010 (258) ELT 217; Parle International Ltd. v. Union of India - 2001 (127) ELT 329 (Guj.) and this Court s judgment in Summerking Electricals (P) Ltd. v. CEGAT - 1998 (102) ELT 522 (All.). 6 . Against the judgment of Bombay High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , both the appellants have deposited the amount as confirmed by the order of the original authority and continued to deposit the amount equivalent to duty under protest during the pendency of their appeal before Commissioner(appeals); tribunal and Hon ble Supreme Court, who were not inclined to grant a stay. The appellants had no choice but to deposit the amount of duty in order to exercise their right to appeal. It was held by Hon ble Bombay High Court in the case of Suvidhe (Supra) that the amount is deposited by the Petitioners is not towards Excise Duty but by way of deposit under Section 35F for availing the remedy of an appeal. This decision was affirmed by Supreme Court also (supra). In the instant case, Hon ble apex Court has finally decided the issue in favour of the appellants, vide their order dated 21.08.2015, holding that appellants are not required to pay duty on the clinker manufactured by them and captively consumed. We find that the original authority and the first appellate authority have not considered the submissions of the appellants that the amounts paid/deposited, during the pendency of the appeal, are in the nature of pre-deposit, for the purposes of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to pay duty, have considered the refund claim, filed in 2015, for amounts deposited during 2005-2015, to have been filed within the time limit prescribed under Section 11B. If the lower authorities held the amounts paid by the appellants, during 2005-2015, to be duty, in no way, the refund claims, filed by the appellants in 2015, could have been considered to have been filed in time. 35. In view of the judicial pronouncements on the issue, as discussed above, we are of the considered opinion that the amounts, deposited/paid by the appellants, during the pendency of the appeals, have to be considered as a mandatory pre-deposit made under Section 35F. We find that the submissions of the learned special counsel for the revenue that only the deposits made pursuant to the orders of Commissioner (Appeal) and CESTAT, under first proviso, have to be considered as deposits for the purposes of Section 35F, are not legally tenable. We find that prior to 06.08.2014 paying entire duty demanded was the rule and grant of stay subject to certain conditions or payment certain amount was an exception. As Section 35L falls under Chapter VI A of Central Excise Act, amounts deposited, under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sits should be returned in the event the appellant succeeds in appeal. The said clarification was reiterated in Circular No.802/35/2004-CE dated 08.12.2004; Hon ble Apex Court has approved both the circulars in their decision CC Vs Fina cord Chemicals Pvt. Ltd. 2015 (319) ELT 616 (SC) while reaffirming their decision in the case of Suvidhe Ltd (supra). 38. Hon ble Madras High Court, in the case of CCE, Coimbatore Vs Pricol Ltd, held that: 7. The first question of law, which is raised, relates to the plea of unjust enrichment and much emphasis is laid on the decision of the Supreme Court in Mafatlal Industries case [1997 (89) ELT 247 (SC)]. Relevant portion of the order passed by the Supreme Court in Mafatlal Industries case (supra) has been extracted in the grounds (b) and (c). There is no dispute with regard to the proposition of law as laid down by the Supreme Court. In the present case, as is evident from the records, it is not a case of refund of duty. It is a pre-deposit made under protest at the time of investigation, as has been recorded in the original proceedings itself. In this regard, it has to be noticed that it has been the consistent view taken by the Courts that any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid decisions that any amount deposited during the pendency of adjudication or investigation is in the nature of a deposit and, therefore, cannot be towards payment of service tax or excise duty. The principles of unjust enrichment, therefore, would not apply if a refund is claimed for refund of this amount. 41. However, in the case of Sahakari Khand Udyog Mandal Ltd 2005 (181) ELT 328 (SC) observed in the facts and circumstances of that case that unjust enrichment is applicable even in the case of refund of pre-deposit on the principles of equity. However, in a few subsequent judgments in Apex Court has held that in the case of refund of deposits made under Section 35F are not hit by the provisions of Section 11B while affirming the decision of Bombay High Court in the case of Suvidhe (Supra). We find that Hon ble Bombay High Court in the case of Sandvik Asia Ltd.-2015 (323) E.L.T. 431 (Bom.) held that repeatedly the Hon ble Supreme Court has clarified that section 11B, which deals with the claims of refund of duty, will not apply to a case where the amount in question was deposited in compliance with the interim order. If the amount is directed to be deposited not toward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Plas Pack Industries (supra) wherein it was held that bar of unjust enrichment is not attracted. So far the amount of Rs. 4 lakhs deposited as pre-deposit under Section 35F of the Act following the Hon ble Bombay High Court s decision in the case of Suvidhe Ltd. (supra), I hold that the doctrine of unjust enrichment is not attracted on the said amount. 43. Tribunal in the case of National Organic Chemical Industries Ltd2021 (378) ELT 314 (Tri. Mumbai), also discussed the decision of Hon ble Apex Court in the case of Sahakari Khand Udyog Mandal Ltd and held that in the particular facts of the case the ratio is not applicable. We find that the unmissable conclusion, of the above discussion, is that the refund of amounts deposited during the pendency of appeal are not subjected to the provisions of Section 11B; however, the bar of unjust enrichment is applicable as principal of equity and that the application of the same depends on the facts and circumstances of each case. Hon ble Supreme Court in Mafatlal Industries Ltd[1997 (89) ELT 247 (SC)], in every statutory determination of eligibility for refund, by the proper officer under Section 27 of Customs Act, 1962, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the appellants notwithstanding the fact that the procedure of provisional assessments are not followed. Hon ble Supreme Court in the case of Allied Photo graphics India Ltd 2004 (166) ELT 3 (SC) held that: 14 . As stated above, Para 104 of the judgment in the case Mafatlal Industries Ltd. (supra) states that if refund arises upon finalisation of provisional assessment, Section 11B will not apply. Para 104 of the said judgment does not deal with payment under protest. In the light of what is stated herein, we may now consider the judgment of this Court in the case Sinkhai Synthetics Chemicals Pvt. Ltd. (supra). In that matter, the assessee was a manufacturer. The assessee claimed exemption which was denied by the Department. The assessee went in appeal to CEGAT. Pending appeal, assessee paid excise duty under protest. The assessee succeeded before the CEGAT and claimed refund on 17-1-1991. Refund was denied by the Department. Therefore, it was a case of payment of duty under protest. However, in the said decision, this Court applied Para 104 of the judgment of the Constitution Bench in the case of Mafatlal Industries Ltd. (supra), which with respect, had no application. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... protest, during the pendency of appeal, is a pre-deposit for the purposes of Section 35F and thus, provisions of Section 11B are not attracted, in view of a catena of judgments and the CBEC/CBIC Circulars No.275/37/2K-CX A dated 02.01.2002;No.802/35/2004-CE dated 08.12.2004 and No. 984/8/2014-CX, dated 16th September, 2014.Thus, the second question under consideration is answered in the negative. 47. Without prejudice to the above averments, learned Counsel for the appellants submits that even on the issue of unjust enrichment, learned Commissioner (Appeals) was not correct in rejecting the refund claim of the appellants; merely because the amounts were debited to expenses in Profit Loss Account, it does not necessarily follow that the incidence of duty was passed on to the buyers; the Chartered Accountant certificate has clearly established that the price of cement was market-driven and the appellant had not ability to increase the price as per the amounts the appellants deposited; the amounts had been absorbed and borne by the appellants. He submits that as analyzed by the Chartered Accountant, the sale of cement at a given point of time in a particular area would be at the mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stomers. We find that the impugned order has not controverted the said certificate. It is not open for Revenue to arrive at a conclusion in disregard of the certificate without challenging or controverting the same with cogent evidence and reasoning. 50. Hon ble Delhi High Court in the case of Hero Motor Corp. Ltd. 2014 (302) ELT 501 (Del.) held that: 17. While examining the question whether or not burden of duty has been discharged by the assessee, one has to be practical and adopt a realistic approach and not be oblivious as to nature and character of proof which will be available. When the assessee is able to show that the burden of duty has not been passed on, he asserts and submits affidavits and certificate of a chartered accountant along with copy of the balance sheet, indicates and shows sales invoices for pre and post-period and when there is no other negative factor or evidence to the contrary to disbelieve, the contention should be accepted. To deny what was paid and has to be refunded by law to the said person is not fair, just and equitable. 51. Tribunal in the case of Allied Chemicals Ltd. (supra) held that: 24. The certificates given by the Chartered Accountant to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artered Accountant. The Chartered Accountant has given the Certificate after verifying the books of accounts produced and information furnished to them. The Revenue has to controvert the Certificate by adducing material or evidence based on records. It can not simply brush aside the Certificate by observing that the details of overheads were not furnished. The Revenue can not arbitrarily fix the percentage of overhead. The learned Advocate has also produced a copy of the audited balance sheet along with schedules and notes of 31-3-1996 according to which the amount of refund claimed by them has been shown as Customs Deposits under the Head Loans and Advances and has contended that this goes to show that the incidence of duty was not passed on to their customers. In the case of Jaipur Syntex Ltd. v. CCE, Jaipur, supra, the Tribunal has held that the Appellants are entitled to receive the refund amount for having not passed on the incidence of duty to the customers as the Appellants have produced all the balance sheets . Wherein the disputed amount has been shown as claim receivable, and all the figures had been duly certified by the Chartered Accountant. Following the said decision, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same but also refused to provide the same. If a Chartered Accountant s certificate needs to be rejected then there has to be some concrete basis for rejection of the same. Similarly, if any amount needs to be included in assessable value that revenue has to be some concrete basis for quantification of such amount. The same also needs to be communicated to the appellant to enable them to defend their case. In the instant case, revenue has failed to do so. In the absence of any reasonable ground for rejection of the Chartered Accountant s certificate, the same cannot be rejected. 55. Tribunal in the case of Shyam Coach Engineers- 2024 (1) TMI 245-CESTAT New Delhi held that: 5.8 Department has relied upon the decision of this Tribunal, Mumbai Bench, in the case of Mahindra Engg. (supra), where it has been held, relying upon the other decisions mentioned in the said decision, that since the refund has been shown on the expenditure side in Profit and Loss Account of the appellant, the same would have definitely been recovered from the customers. We are of the opinion that this is a presumptive outcome. All amounts shown under expenses cannot always be the amount of duty. The burden wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate was issued after going through the accounts of the appellants and after satisfying himself about the truthfulness of the same. A certificate given by a professional cannot be dis-regarded unless it is proved to be blatantly wrong and contrary to the facts and evidence available on the hand. Thus, the certificate given by the Cost/Chartered Accountant has an evidentiary value and cannot be rejected in a half-handed manner. The impugned order having been issued without giving reasons as to why the same has not been taken into account cannot be held to be legally sustainable. 57. Learned Special Counsel for the Revenue submits that the appellants have availed Cenvat Credit on one hand and on the other hand have claimed that the amount paid by them was a deposit and the same be refunded after the Hon ble Supreme Court decided the issue in their favour is contradictory. We fail to understand this argument. Hon ble Supreme Court in the final order cited above, while deciding the case in favour of the appellants on merits, held that taking of CENVAT credit is not an issue raised in these cases. We find that neither the original authority nor the first appellate authority have denied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted evidence and argument in their favour. To that extent, we find that the presumption has been rebutted by the appellants. As a result, it is for the Department to negate the evidence submitted by the appellants. We find that while doing so, the Revenue, instead of analysing the rebuttal submitted by the appellants and instead of discarding the Chartered Accountant certificate with tangible evidence and cogent arguments, continued to entertain the opinion that the appellants have passed on the duty, paid on clinker cleared for captive consumption, to the customers, on the basis of their accounting practice. Revenue has not taken into consideration that the appellants have cement plants all over the country and are not in a position to alter the prices of cement just because in one of the many plants, duty has been paid or deposited on the clinker cleared for captive consumption in the manufacture of cement. We find that the appellants are manufacturing cement at various plants spread across the country; in respect of all other plants, clinker is exempt by virtue of Notification No 67/95; the same was disputed by the Revenue in respect of unit in Himachal Pradesh and the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e further submits that even if it is held that the refund is subject to the provisions of Section 11B, interest is payable in terms of Section 11BB. On the other hand, learned Special Counsel for the Department submits that interest under Section 35FF is payable only when the deposit is made, underfirst proviso to Section 35F, for the period 10.5.2008 to 06.08.2014; as the deposits are not made under first proviso to Section 35F, but as payment of duty on the clearance of clinker for captive consumption, which is not the pre-deposit, interest is not payable. 61. Provisions relating to payment of interest on delayed payment of refund of pre-deposit were introduced vide Section 85 of the Finance Act, 2008 w.e.f. 10.05.2008. The new Section 35FF introduced provides as follows: Section 35FF : Interest on delayed refund of amount deposited under the proviso to Section 35F. Where an amount deposited by the appellant in pursuance of an order passed by the Commissioner (Appeals) or the Appellate Tribunal (hereinafter referred to as the appellate authority), under the first proviso to section 35F, is required to be refunded consequent upon the order of the appellate authority and such amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 35F, whereas w.e.f. 06.08.2014, it is provided that interest shall be granted on the delayed refund of amounts deposited under Section 35F, irrespective of the fact as to whether such deposit was under main clause or under First Proviso. When the provision of the statute or law is very clear, there is no scope for any interpretation. However, we find that the amendment carried out in 2014, clearly establishes the legislative intent that amounts deposited as per the main Section 35F, are also to be considered as deposit under Section 35F. This fortifies the argument of the appellants that total duty/ amount deposited under Protest, during the pendency of the proceedings in the Hon ble Supreme Court, should be considered as deposit under Section 35F. However, we are not inclined to accept the submissions of the learned Counsel for the appellants that the appellants are eligible for interest on delayed refund of the sums deposited after 10.05.2008 under the main part of the Section 35F. 61. The legislative intent is very clear, from the wording of Section 35FF, that interest shall be payable on the delayed refund of amounts deposited as per the orders passed under first proviso to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussion in the preceding Paragraphs and the judicial pronouncements on the issue, we hold that amounts paid during the pendency of appeal, continuously at the level of Commissioner (Appeals), CESTAT and the Hon ble Apex Court, are to be considered as deposits for the purpose of Section 35F and the refund of the same is to be made in terms of the CBEC/ CBIC Circulars issued from time to time without application of provisions of Section 11B. We also hold that even if the principle of unjust enrichment is held applicable on the principle of equity, the presumption has been rebutted by the appellants and in the facts and circumstances of the case, the same is not controverted with evidence by the Revenue. The appellants have fairly submitted to the original authority that the amount of Cenvat credit availed by them, on the inputs used in the manufacture of clinker, during the impugned period, may be deducted from the amount the appellants claimed as refund. 63. In view of the above, the appeals are partially allowed and the impugned orders are modified to the extent to say that: (i) Both the appellants are entitled to the refund of amount deposited, during the pendency of litigation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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