TaxTMI 
TaxTMI 
2010 (4) TMI 956
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....an what is due from them during the relevant period, and the Department asked them to claim refund of the same and accordingly they preferred this refund claim on 19-4-2003. Prior to 1-10-1975, also the Department finalized provisional assessment and demanded differential duty to the tune of Rs. 3,00,07,511.57 which pertains to the period from 17-7-1973 to 30-9-1975. Since the appellants contested this demand in an appeal filed to this authority, an order-in-appeal bearing No. 143/2004 dt. 13-8-2004 was passed by this authority directing the Assistant Commissioner, 'A" Division, Bangalore to adjudicate the case De novo and re-quantify the demand keeping in view certain guidelines given to him. The respondents have requested to adjust this re-quantified demand to their refund claim. The refund claim of Rs. 3.76 crores of the respondent was sanctioned by the Asst. Commissioner "A" Division, Bangalore and ordered for crediting the same to Consumer's Welfare Fund Account as he felt that the claim did not pass through successfully the test of 'unjust enrichment' vide the Order-in-Original. Aggrieved by such an order Revenue came in appeal before this Bench. This Bench vide its Final Ord....
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....s or refunds consequent upon the adjustment under sub-rule (5) of Rule 9B will not be governed by Section 11A or Section 11B, as the case may be. However, if the final orders passed under sub-rule (5) are appealed against - or questioned in a writ petition or suit, as the case may be, assuming that such a writ or suit is entertained and is allowed/decreed - then any refund claim arising as a consequence of the decision in such appeal or such other proceedings, as the case may be, would be governed by Section 11B ................." (emphasis supplied) (c) The above underlined law laid down by a nine judge Bench still holds good. The Commissioner (Appeals) has palpably failed to take note of the facts of the present case and the above observation of the Supreme Court with regard to applicability of Section 11B to refunds arising out of appellate or other civil proceedings. There is not even a whisper of this landmark judgment in the impugned appellate order. Applying the ratio of the said judgment to facts of the present case it is evident that the refund arose not on finalization of provisional assessment, but as a consequence of an appellate order after the compan....
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.... not hit by the bar of unjust enrichment is therefore clearly untenable. (g) Similar view had been expressed by the Tribunal earlier in their own [Hindustan Lever - 2003 (154) E.L.T. 482 (Tri).] case. (h) The Commissioner (Appeals) has erroneously applied the ratio of Supreme Court judgment in TVS Suzuki case [2003 (156) E.L.T. 161 (S.C.)] without proper application of mind to the facts of that case which are distinguishable. In that case the refund has arisen at the time of finalisation of provisional assessment under sub - rule (5) of Rule 9B, unlike in the present case where the refund finally arose only as a consequence of the appellate order as pointed out earlier. It is for this reason that the Larger Bench of the Supreme Court in Allied Photographics India Ltd. case [2004 (166) E.L.T. 3 (S.C.)] affirmed the judgment in TVS Suzuki case as the same was found in accordance with the law laid down by the Supreme Court in Mafatlal case. (i) For the aforesaid reasons, the Commissioner's (Appeals) order is liable to be set aside and the matter remanded to the original authority with direction to the respondent to rebut the leg....
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.... which is extracted below : "In order to get over the situation arising under Mafatlal Industries Ltd (supra) vide Notification No. 45/99-C.E. (N.T.), dated 25-6-1999, an amendment was made in sub-rule (5) of Rule 9B by adding a proviso thereto. The effect of that is that even after finalisation of provisional assessment under Rule 9B, if it is found that an assessee is entitled to refund, such refund shall not be made to him except in accordance with the procedure established under sub-section (2) of Section 11B of the Act". (emphasis supplied) He has also failed to appreciate that in TVS Suzuki case the Apex Court particularly took note of the fact that the refund claim in that case was filed prior to the amendment to Rule 9B(5) as against in the present case where the claim for refund was filed well after the said amendment. The Commissioner (Appeals)' order is clearly contrary to the said judgment of the Supreme Court and hence the same not sustainable. (n) In effect, therefore, whether the present claim is treated as a claim arising out of an appellate order or on finalisation of provisional assessment, e....
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....actors in deciding whether duty of excise has been passed on or not". (u) Viewed from this angle, the Commissioner (Appeals) has failed to appreciate that the company has not disclosed what accounting treatment has been given to such deposits in their Books of Accounts and Balance Sheets for the relevant period. (v) It is not known whether the disputed amount deposited between 1983-1987 have been shown on the "ASSETS" side as "RECEIVABLE" in their Balance Sheets or charged off to "REVENUE'. If these amounts have been charged off to REVENUE, it amounts to cost and applying the general principle of costing and accounting the presumption would be that the incidence has been passed on to buyers. If these amounts are charged off to REVENUE and treated as cost, the ITC having made profit all through this disputed period, the fact of passing on the incidence is quite evident. (w) The company as well as the lower appellate authority are under a wrong premise that the amounts deposited post clearance can't be passed on. It has not been appreciated by the lower appellate authority that even if it could not he passed on to the very buye....
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....ow before the Hon'ble Tribunal. 4.2 Subsequent to the said submission of the chart of dates and events in the case, ld. Counsel would urge as under :- (i) The Department has therefore accepted the order of the CCE(A) dt. 17-10-2005 in OIA No. 187/2005 C.E. and has not appealed against the same and has refunded the money to the Respondent vide OIO bearing No. 42/2005 dt.15-12-2005. Therefore both the orders have attained finality, it is pertinent to submit that both the OIA and the OI0 refer to the gross refund claim of the Rs. 3,76,29,658/-, which is mentioned in the present appeal by the Revenue in the EA3 memorandum filed by them. The refund granted is Rs. 1,26,66,595/- after appropriating Rs. 2,49,63,062/- as mentioned in the OIO dt. 15-12-2005. (ii) Since the subsequent orders passed by the CCE(A) and the Asst. Commissioner have not been appealed against and have a direct connection with the present appeal and the impugned order, the present appeal becomes infructuous and more so because the amount has been refunded by appropriation of dues. (iii) The Department has in a review dt. 2-12-2005 as mentioned by the A....
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....cords that the issue was pertaining to period 1-1-1975 to 28-2-1983 after protracted dispute, the case having gone up to Apex Court, the provisional assessments made during the relevant period was finalized by Order-in-Appeal dt. 30-8-2002, which resulted in excess payment by the respondents. Armed with such an order, the respondents filed refund application claiming excess payment vide their claim dt. 19-4-2003. The said refund claim was sought to be rejected by show cause notice dt. 17-6-2003 mainly on the ground that the respondent has to show the evidence regarding that they have not passed on the incidence of duty to any other persons. 6. On perusal of the entire case records, we find that the ld. Commissioner (Appeals) while allowing the appeal filed by the respondent has decided the issue by observing as under :- "(1) For refund arising on finalisation of provisional assessment under Rule 9(B), provisions of Section 11B will not apply. Moreover amendment made to Rule 9(B)(5) by way of inserting a proviso vide Notification No. 45/99(N.T.) dt. 25-6-1999, is prospective and not retrospective. That means to say that if the refund claim which arose consequent upon finalisat....
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....rom their customers. On this count also lam fully convinced that the Department cannot put the embargo of unjust enrichment while refunding such excess payments. (3) Thirdly, these payments are per-se payments made "under protest". Doctrine of unjust enrichment will not apply to such "under protest" payments as per Apex Court's judgment in National Winders case appearing in 2003 (154) E.L.T. 350 (S.C.). Though the Apex Court holds that this judgment is to be per incurrence, it has affirmed its judgment in the case of TVS Suzuki Ltd. - 2003 (156) E.L.T. 161 (S.C.). This proves beyond doubt, that the doctrine of unjust enrichment should not be made applicable to the cases of this type. (4) In view of the foregoing deliberations I am fully convinced that the present refund claim of Rs. 3,76,29,658/- of M/s. ITC Ltd, Bangalore pertaining to the period prior to 25-6-99 need not undergo "unjust enrichment" test and even if it is subjected to such test it succeeds in that attempt as the appellants have apparently not collected it from their customers as these payments are in the nature of deposits made posterior to the clearance of excisable goods." 7. The entire submission of th....
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....uthority that the adjudicating authority has not given any categorical findings regarding the submissions by the respondent that the amount having been deposited post clearances could not have been passed on to their customers. It was for the adjudicating authority to decide the plea made by the appellant in form of some findings or facts. In the absence of any such findings by the adjudicating authority, we have to hold that the adjudicating authority has accepted the submissions made by the appellant that the amounts being paid subsequent to the clearances could not have been passed on to the customers. 10. In an appeal against such an order, the assessee again took the same ground among other grounds before the ld. Commissioner (Appeals). Ld. Commissioner (Appeals) while allowing the appeal filed by the assessee has recorded that the test of unjust enrichment succeeds in favour of the assessee, as they have apparently not collected the amounts so paid from their customers and on the ground that these payments were made post clearances of the goods. As against these categorical finding, the submission of the ld. Counsel for the Revenue seems to be that the respondent could sti....
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....oner vide his order dated 23-3-1998 also recommended the same. The duty liability worked out is Rs. 4,14,592/-. The Commissioner vide his order dated 3-3-1999 determined the A.C.P. of the assessee as 13927.268 MT with effect from 1-9-1997 and 11922.960 MT with effect from 23-12-1997. As the assessee had deposited the excise duty for the period September, 1997 to March, 1999, it claimed vide their letter dated 5-3-1999 refund/adjustment of the amount paid in excess. The Assistant Commissioner, Patiala invoked the principle of undue enrichment by concluding that the assessee must have recovered the duty from their buyers by adding in the cost of their production. Consequently, a show cause notice was issued to the assessee for crediting the refund to the Consumer Welfare Fund. The Deputy Commissioner in his Order-in-Original dated 10-2-2001 (Annexure P-1) held that the assessee has actually collected the duty from their buyers and has, thus, passed on the incidence of duty to them. It was found that any refund if given to them would lead to unjust enrichment under the provisions of Section 12B of the Act and that the refund amount should be credited under Section 12C of the Act to Co....