2023 (8) TMI 1042 - AT - Central Excise

Tribunal affirms refund entitlement under Section 11D(2) - Revenue appeal dismissed

Commissioner of Central Excise Customs & Service Tax, Visakhapatnam Versus M/s ONGC Ltd

The Tribunal upheld the Commissioner (Appeals) decision granting the refund to the Respondent under Section 11D(2) of the Act. It was determined that the ... Refund of excess amount paid under the Provisions of section 11D(2) of CE Act - Burden of duty - time limitation - principles of unjust enrichment - HELD THAT:- On a plain reading of Section 11D(1), sub-Section (1) provides that the person who has collected tax, upon finalization of assessment, if it is found to have been collected in excess, such excess tax has to be deposited with the Central Government. Under the admitted facts, HSL has deposited the amount collected from ONGC with the Central Government. Sub-Section (2) to Section 11D provides that upon adjustment of the tax pursuant to finalization of assessment, if any surplus is left, then either such surplus shall be credited to the Fund (Consumer Welfare Fund) or, as the case may be, refunded to the person who has borne incidence of such amount, in accordance with the provisions of Section 11B - admittedly, there is no dispute on the fact that the Respondent Assesee has borne the incidence of the amount of Rs 97,67,087/-. Principles of unjust enrichment - HELD THAT:- As informed by the Counsel for the Respondent, that the pursuant to directions in the Order-in-Appeal for remand on the ground of unjust enrichment, the Adjudicating Authority cannot have adjudicated and cannot reject the refund holding that the Respondent Assessee does not satisfy that they have not passed on the burden of duty against which order, the Respondent Assessee has gone in appeal before the Commissioner(Appeals). There are no error in the impugned Order-in-Appeal of the Commissioner (Appeals) and the same is accordingly upheld - appeal dismissed. Issues Involved:The issue involved in this appeal is whether the Commissioner (Appeals) has rightly held that the Respondent Assessee is entitled to refund under the Provisions of section 11D(2) of the Act.Comprehensive Details:Issue 1: Entitlement to Refund under Section 11D(2)The facts of the case revolve around the purchase of goods by the Respondent from Hindustan Shipyards Limited (HSL) and the subsequent excess payment of duty amounting to Rs 97,67,087/-. The refund claim filed by HSL was initially rejected on the grounds that the burden of duty was not borne by them. However, the Respondent ONGC later filed a refund claim under Section 11D(2) following a Public Notice issued by the Revenue. The Commissioner (Appeals) granted the refund, acknowledging that the Respondent had borne the incidence of duty, but remanded the issue of unjust enrichment. The Revenue appealed, arguing that the time-barred issue under Section 11B was overlooked and that the interpretation of Section 11D(2) was erroneous.Issue 2: Interpretation of Section 11D(2) and Time-Barred Refund ClaimThe Commissioner (Appeals) held that the refund claim was not time-barred as it was filed within six months from the date of the Public Notice, as required by Section 11D(2). The Respondent contended that the Finalization Order did not specify a time limit for the refund application. The Counsel argued that the subsequent amendment to Section 11B in 2007 did not apply to this case as the issue predated the amendment. The Respondent maintained that the refund was rightfully granted as they had borne the duty burden.Judgment:Upon review of Section 11D(2), the Tribunal observed that the provision mandates adjustment of excess tax paid with the Central Government, and any surplus should be refunded to the person who bore the incidence of the tax. It was noted that the Respondent had indeed borne the duty burden. The Tribunal also highlighted that the Adjudicating Authority could not reject the refund claim based on unjust enrichment without proper adjudication. Consequently, the impugned Order-in-Appeal of the Commissioner (Appeals) was upheld, and the appeal was dismissed.