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TMI Blog2024 (12) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... XCISE, COIMBATORE VERSUS M/S. PRICOL LTD., THE CUSTOMS, EXCISE SERVICE TAX APPELLATE TRIBUNAL [ 2015 (3) TMI 735 - MADRAS HIGH COURT] which was subsequently followed by the Allahabad High Court in THE COMMISSIONER OF CENTRAL EXCISE, COIMBATORE VERSUS M/S. PRICOL LTD., THE CUSTOMS, EXCISE SERVICE TAX APPELLATE TRIBUNAL [ 2015 (3) TMI 735 - MADRAS HIGH COURT] . In all these decisions, the main principle laid down is that any amount deposited during the pendency of adjudication or investigation is in the nature of deposit and therefore, cannot be considered to be towards payment of duty and consequently the principles of unjust enrichment would not apply in the event of claiming refund of such deposit. Deposit of the duty amount 'under protest' by the appellant during the period April 2016 to June 2017 - no show cause notice itself was issued by the department - HELD THAT:- The deposit made by the appellant cannot be characterised as 'duty' in terms of section 11B of the Act. The amount deposited by the appellant during this period was only by way of abundant caution as the very basis of initiating any proceedings is by issuing the show cause notice itself, however, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rasad, Authorised Representative for the Department. ORDER Barmer Lignite Mining Company [the appellant] has challenged the Order-in-Appeal 17(SM)/CE/JPR/2021 dated 29.01.2021 whereby the refund claim of the amount deposited 'under protest' during the pendency of the adjudication proceedings and investigation was rejected on the ground of unjust enrichment in terms of section 11B of the Central Excise Act, 1994 [the Act]. 2. FACTS: The appellant is engaged in lignite mining activities at Kapurdi and Jalipa at Barmer District, Rajasthan. For the purpose of mining and lignite the appellant has entered into a Joint Venture Agreement with the Government of Rajasthan having 51% stake. The entire lignite mined by appellant was supplied exclusively to Raj West Power Ltd., presently known as JSW Energy (Barmer) Limited [JSWEBL] to be used in generation of electricity, in terms of Fuel Supply Agreement dated 19.01.2011. The Government of Rajasthan had entered into an Implementation Agreement (IA) dated 29.05.2006 with JSWEBL. The price of the mined lignite to be supplied by the appellant to JSWEBL was to be fixed by the Rajasthan Electricity Regulatory Commission [RERC], a State Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex Court in Commissioner vs. Barmer Lignite Mining Company [2019 (368) E.L.T.-A54(SC)] . 6. In view of the final order passed by the Tribunal, the appellant filed the refund claim on 15.03.2019 seeking to refund the amount of Rs.107,56,07,953/- which was deposited by the appellant 'under protest'. Initially on verification of the claim, the department returned the papers on the ground that no documentary evidences were submitted so as to comply with the principle of unjust enrichment. The appellant resubmitted the refund claim along with the supporting documents, 'Balance sheet, Profit Loss Account and Schedules for the financial year 2011-2012 to 2017-18, ER-I Returns, Affidavit on behalf of the company etc., to establish that there was no unjust enrichment. 7. The adjudicating authority passed the sanctioned order dated 04.09.2019 in favour of the appellant observing that the principle of unjust enrichment is not applicable. The department preferred an appeal before the Commissioner (Appeals) and the appellant filed the cross-objection to the appeal. By the impugned order, the Commissioner (Appeals) rejected the refund claim on the ground that the same is hit by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with AS-29 could not have recognised the excise duty paid as a 'Contingent Asset'. The learned counsel has also relied on the Accounting Standard-9 and Accounting Standard Interpretation-14 and submitted that mere accounting treatment in the books of accounts does not prove that the incidence of duty was actually passed on to the customers by the appellant. The learned Counsel referred to series of decisions in this regard which are as under: i. Allied Chemicals Pharamceuticals Private Limited vs. CCE ST, Jaipur-I, Final Order Nos. 50146-50163/2019 dated 01.02.2019(CESTAT, New Delhi); ii. Chambal Fertilizers and Chemicals Limited ; iii. Commissioner of Customs, ACC Import Commissionerate, New Customs House, New Delhi vs. UT Electronics Private Limited, Final Order Nos. 51730-51732/2019 dated 24.12.2019 (CESTAT New Delhi); iv. Shyam Coach Engineers vs. Commissioner of Central Excise CGST, Jaipur Final Order No.50011/2024 dated 04.01.2024; v. Commissioner of Central Excise, Pune vs. Sandvik Asia Limited, 2015(323) ELT 431-Bombay High Court; vi. Man Trucks Bus India Private Limited vs. Commissioner of Customs, GST, Central Excise, Indore, 2021 (375) ELT 590 (Tribunal-Delhi) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel referred to the following decisions: i. Principal Commissioner Of Customs ACC (Import) Commissionerate, New Delhi v. Telecare Network (India) Pvt. Ltd., Final Order No. 50390/2023 Dated 24.03.2024 - (CESTAT New Delhi) ii. Business Overseas Corporation v. CC (Import General, 2015 (317) E.L.T.637 (Tri. - Del.) iii. Tirumala Bearings (P) Ltd. v. CCE C, Visakhapatnam, 2016 (335) ELT 145 (Tri. - Bang.) iv. Hero Motocorp Ltd. v. CC (Import and General), 2014 (302) E.L.T. 501 (Del.) v. Suvee Impex Pvt. Ltd. v. CC ST, Bangalore, 2016 (344) ELT 241 (Tri.-Bang.) vii. For the period April 2016 to June 2017, the appellant had deposited the amount of Rs.40,27,76,906/- 'under protest' in the absence of any show cause notice and hence is only a deposit which does not partake the character of duty in terms of the provisions of section 11B. Submissions of the Revenue 9. The learned Special Counsel for the revenue reiterated the findings as arrived in the impugned order and submitted that each refund claim filed before the authority shall have to pass the test of unjust enrichment and relied on the decision of the Tribunal in Mahindra Engineering and Chemical Products Ltd. vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Goods and Service Tax, Udaipur [Final order No.50085/2023 dated 30.01.2023 in ST/52983/2018] where the Bench had dealt with similar contentions as raised by the appellant herein referring to the earlier decisions of the Madras High Court in Commissioner of Central Excise, Coimbatore vs. Pricol Ltd which was subsequently followed by the Allahabad High Court in Ebiz.com vs. Commissioner of Central Excise , Customs and Service Tax and ors . and subsequently in Commissioner of Central Excise, Lucknow vs. Eveready India Ltd . In all these decisions, the main principle laid down is that any amount deposited during the pendency of adjudication or investigation is in the nature of deposit and therefore, cannot be considered to be towards payment of duty and consequently the principles of unjust enrichment would not apply in the event of claiming refund of such deposit. The decision in Chambal Fertilizers being rendered by Principal Bench and being latest in point of time is binding on us and we, therefore, hold the issue on merits in favour of the appellant. 12. The appellant has raised other contentions in support of his arguments on merits which we have referred to in the earlier parag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertificate given by the Chartered Accountant could not have been ignored as the Certificates are issued on the basis of detailed scrutiny of the Books of Account and could not have been ignored in the absence of any evidence to disprove it. Reliance was placed in Tirumala Bearings (P) Ltd. vs. Commissioner of Central Excise and Customs (Appeals), Visakhapatnam [2016(335) ELT 145 (Tri.- Bang.)] , where it has been observed that the Certificate of the Chartered Accountant shifts the burden on the revenue to prove the recovery of extra duty collected from the customers by producing evidence but as the revenue failed to advance any evidence to rebut the Certificate, the allegations of unjust enrichment cannot be upheld. In the circumstances, it was observed that the Certificate given by the Chartered Accountant is good evidence to show that the disputed duty amount had not been collected from the customers and the said Certificate could not have been sidelined without production of any evidence to show that the Certificates were wrong. Similar view has been taken by the Tribunal consisting of the same Members in Principal Commissioner of Customs, New Delhi vs. Telicare Network India Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court] where the Court observed that the undisputed position is that the deposit 'under protest' was made against the anticipated liability and which liability though fructified by the respondent was set aside by the CESTAT and which order attained finality. It is relevant to quote the para from the said decision as under: We may however mention that the Counsel for the petitioner also, perhaps to bring the case of the petitioner within the Circular relied upon, has sought refund of the amount by calling it pre-deposit , when it was not deposited by way of pre-deposit but under protest, even before any demand was raised and while the petitioner was still being investigated against. Such deposits under protest, to ease the rigors which the Tax Authorities otherwise are entitled to impose, are not unknown and judicial notice has been taken thereof. However as long as the amount deposited is under protest and in which protest, as held in Mafatial Industries Ltd. supra no grounds are required to be stated, no right thereto accrues in favour of the depositee till the depositee is held entitled in law thereto. Thus, the wrong nomenclature given by the petitioner to the deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Principal Bench in Chambal Fertiliser Chemicals Ltd which covers all the contentions raised by the appellant herein, the earlier decision in Mahindra Engineering Chemical Products Ltd would not really have any relevance. Moreover, the Tribunal drew the analogy that scheme of section 11B treats the deposits in Personal Ledger Account as central excise duty, relying on the decision of the Apex Court in CIT v M/s Modipon Ltd where the issue involved was whether the assessee is entitled to claim deduction under section 43B of the Income Tax Act, 1961 in respect of the excise duty paid in advance in the Personal Ledger Account and it was concluded that the nature of deposits made in PLA are also central excise duty for the purpose of section 43B. Thereafter, the main thrust of the decision was to distinguish between the payment of pre-deposit as per the direction of the Court and the payment of duty. In fact, the decisions relied on by the learned Counsel for the appellant were not even considered on the ground that they were in relation to refund of pre-deposit. Hence no reliance can be placed on the said decision. 18. The decision in Collector of Central Excise Chandigarh vs. Doaba Co ..... 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