TaxTMI 
TaxTMI 
2011 (3) TMI 527
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....., v. CCE, Mysore reported in 2008 (229) ELT 680 (Tribunal.-Bang) had taken a view that the excess payment if any made by the assessee would be refundable subject to applicability of the principle of unjust enrichment, the very same bench in Goetze (I) Ltd., v. CCE, Bangalore reported in 2008 (89) RLT 464 had held that revenue was bound to adjust the excess payment made by the assessee whenever there is any demand for the same. When the above issue arose in Sangam Spinners Bhilwara case before the Delhi Bench of CESTAT, the said order in Excel Rubber case was brought to the notice of the said Bench pursuant to which the issue was sought to be referred to the Larger Bench. Further, it was observed that since similar issue has been raised in two different matters pending before two different Benches, it will be appropriate to place both the matters before the same Larger Bench to avoid any conflicting decisions on the same issue. Accordingly, the matter at Delhi was transferred for consideration of the said issue by the Larger Bench at Bangalore and that is how the said issue in Sangam Spinners is also being considered here at Bangalore. 4. The learned advocate appearing for the a....
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....mount payable to the Central Government along with interest thereon from the first day of month succeeding the month for which such an amount is determined till the date of payment. Any excess payment made would be considered as amount paid to the Government and interest thereon would be payable on the net amount. The same rule also provides for the interest payable from the month when the duty is determined as due. The said amount would arise after adjustments of excess payments. It cannot be said that for the purpose of interest there can be two principal amounts. The rule therefore has to be harmoniously read to include the provision for adjustment of excess duty paid. 7. The learned advocate for the appellants sought to rely upon the following decisions. (1) Tata Oil Mills Co Ltd., v. CCE [1990 (46) ELT 438] (2) Divya Enterprises Ltd., v. CCE [2000 (115) ELT 66] (3) Madura Coats Ltd., v. CCE [2003 (161) ELT 984 (Tri. - Chennai)] (4) Pfizer Ltd., v. CCE [2006 (72) RLT 410] (5) Vinir Engineering Pvt. Ltd., v . CCE, Bangalore [2004 (168) ELT 34 (Tri. - Bang.)] (6) Soubhagya Confectionary Pvt. Ltd., v . CCE [2005 (68) RLT 650....
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....yable in terms of the final assessment and it does not relate to the adjustment of excess duty paid in relation to totally independent and different assessment pertaining to different goods. Reliance has been sought to be placed in the following decisions: (1) Gujarat State Fertilizers Ltd., v . CCE [2005 (188) ELT 92] (2) Priya Blue Ind. v. CC(P) [2004 (172) ELT 145 (SC)] (3) Shivam Filaments v . CCE [2009 (248) ELT 856] (4) CCE, Ahmedabad v . Arvind Mills Ltd., [2006 (204) ELT 570 (Tri. - LB)] 9. Initially the assessment proceedings were in terms of Rule 9B of the Central Excise Rules,1944. The said provision of law reads thus: "RULE 9B - Provisional assessment to duty - Notwithstanding anything contained in these rules, (a) where the proper officer is satisfied that an assessee is unable to produce any document or furnish any information necessary for the assessment of duty on any excisable goods; or (b) where the proper officer deems it necessary to subject the excisable goods to any chemical or any other test for the purpose of assessment of duty thereon; or (c) where an assessee has produced all the ne....
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.... the assessee is unable to determine the value of excisable goods in terms of section 4 of the Act on account of non-availability of any document or any information; or (b) where the assessee is unable to determine the correct classification of the goods while filing the declaration under rule 173B; the said assessee may request the proper officer in writing giving the reasons for provisional assessment to duty, and the proper officer may direct after such inquiry as he deems fit, that the duty leviable on such goods shall be assessed provisionally at such rate or such value (which may not necessarily be the rate or price declared by the assessee) as may be indicated by him, if such assessee executes a bond in the proper form with such surety or sufficient security in such amount, or under such conditions as the proper officer deems fit, binding himself for payment of difference between the amount of duty as provisionally assessed and as finally assessed: Provided that all clearances in respect of excisable goods covered under such request by the assessee submitted with the proper officer under the dated acknowledgement shall be deemed to be cleared as provisional....
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....he duty so assessed is more than the duty determined and paid by the assessee, the assessee shall pay the deficiency by making a debit in the account current within ten days of receipt of copy of the return from the proper and where such duty is less, the assessee shall take credit in the account-current for the excess on receipt of the assessment order in the copy of the assessee duly countersigned by a Superintendent of Central Excise." 12. The concept of assessment as comprised under Rule 173F with effect from 16th March 1995 provided thus: "RULE 173F. Assessee to determine the duty due on the goods and to remove them on payment thereof - Where the assessee has complied with the provisions of rules 173B, 173D, and where applicable, rule 173C, he shall himself assess the duty due on the excisable goods intended to be removed and shall not, except as otherwise expressly provided in these rules, remove such goods unless he has paid the duty so determined." 13. The provisions comprised under rule 731-I of the said Rules with effect from 20th November 1996, read thus: "RULE 173-I Scrutiny by the proper officer. - (1) The proper officer may on the basis of info....
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....assessment. - (1) Where the assessee is unable to determine the value of excisable goods or determine the rate of duty applicable thereto, he may request the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, in writing giving reasons for payment of duty on provisional basis and the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, may order allowing payment of duty on provisional basis at such rate or on such value as may be specified by him. (2) The payment of duty on provisional basis may be allowed, if the assessee executes a bond in proper form' with such surety or security in such amount as the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, deem fit, binding the assessee for payment of difference between the amount of duty as may be finally assessed and the amount of duty provisionally assessed. (3) The Assistant Commissioner of Central Excise or the Commissioner of Central Excise as the case may be, shall pass order for final assessment, as soon as may be, after the relevant information,....
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....amount ascertained pursuant to the finalization of assessment under sub-rule (3). The Sub-Rule (6), however states that such refunds shall be credited to the Consumer Welfare Fund unless the assessee establishes that the incidence of such duty has not been passed over to any other person. 19. The conjoint reading of sub-rules (4), (5), & (6) of Rule 7 would disclose that applicability of each of those rules would arise only after finalization of assessment under sub-rule (3) of the said rules. Question of interest being claimed or paid in relation to the amount payable to the Central Government by the assessee would arise pursuant to ascertaining the difference between the total duty liability under the final assessment in comparison to the total duty paid pursuant to provisional assessment. Unless such difference in relation to the duty between the provisional and the final assessment is ascertained, the obligation to pay the interest on the differential amount of duty does not arise. Likewise, question of refund does not arise unless the exact amount which could be stated to have been paid in excess of the amount found to be payable in terms of the final assessment is ascertai....
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....in excess during the provisional assessment in comparison to the amount ultimately ascertained as payable in terms of final adjustment. However, the right is not absolute and it is subject to the applicability of principle of unjust enrichment. In fact, the said concept is clearly found incorporated in Section 11B with effect from 20th September 1991. It clearly requires the assessee to prove that the duty burden has not been passed over to any other person in order to justify the claim for refund. In other words, even if an assessee is found to have paid any amount in excess of duty payable by such an assessee, merely on the ground of excess payment of duty, the assessee would not be entitled to claim refund. It is necessary for such an assessee to establish in relation to the amount claimed as refund that he had not passed over the duty burden to any third person. This is the statutory provision comprised under Section 11B and the constitutional validity thereof was duly confirmed in Mafatlal Industries v. UOI -1997 (89) ELT 247. 24. At the same time, it has to be noted that while incorporating the concept of unjust enrichment being a bar to secure refund by an assessee, a pro....
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.... finalization of the assessment and within the period prescribed for the same and in terms of the provisions of law. The right of the assessee would get matured in relation to the amount to be claimed as refundable only after finalization of the assessment and the necessary proof being submitted in that regard by the assessee and occasion to submit the said proof would arise only after claim in that regard is filed before the competent officer in accordance with the provisions of law and within the time frame provided under the law. Hence, all the contentions regarding the right to adjustment in the course of finalization of the assessments are totally devoid of substance and are to be rejected. 26. The concept of adjustment is neither implicit nor explicit in the provisions of law comprised under Rule 7 of the said rules nor was it there in Rule 9B of Central Excise Rules, 1944. 27. The above conclusion is inevitable even upon reading Sub-rule (4) independently or along with other sub-rules of Rule 7. The Sub-rule (4) specifically provides for liability to pay interest by the assessee @ 24% per annum from the first day of the month succeeding the month for which the concerne....
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....st enrichment will get attracted. 29. The argument about two principal amounts for the purpose of interest is devoid of substance. The contentions in this regard are purely figments of imaginations without any basis. Proper reading of the provisions of law comprised under Rule 7 would disclose that there could be no occasion for considering two principal amounts for the purpose of interest. 30. The decisions which are sought to be relied upon on behalf of the appellants are of no relevance to the issue under consideration. In Tata Oil Mills case, undoubtedly the Apex Court was dealing with the matter arising under Rule 173-I of the Central Excise Rules, 1944. Undisputedly, neither there was provision of payment of interest nor was principle of unjust enrichment applicable, though the question of applicability of provisions of Section 11B of the said Act was raised, the same was not at all considered. 31. In Divya Enterprises case, it was held that having regard to Notification No.65/87 dated 1st March 1987, no further duty was required to be paid. The Order neither discloses any discussion on the point of the scope of Notification nor how the said notification is applicabl....
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....ing fabric can be adjusted for duty paid on towels. Therefore, in view of the Apex Court ruling, there could not be any doubt with regard to the powers of officer to make adjustment and raise demands at the end of the financial year or at the time of issue of show cause notice and similar view was expressed in Serai Kella Glass Works. As also observed above, the order in Divya Enterprises by the Apex Court was in exercise of powers under Article 142 of the Constitution, whereas the question for consideration in Serai Kella Glass Works was totally different. 37. In Soubhagya Confectionary case, the decision was essentially in relation to point pertaining to invocation of extended period of limitation and has nothing to do with the point regarding the adjustment. 38. In Oriental Insurance Co. case, it was held that excess payment of Service Tax to be adjusted while computing the demand for short payment of Service Tax. Undisputedly, there is specific provision for such adjustment under the Finance Act, 1994. 39. In South Asian Petrochem's case, it essentially related to calculation error and not, on any point of law as such. Besides, it was clearly clarified that the directi....
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.... that regard is well settled by the decision of the Apex Court in the matter of UOI v . Dhanvanti [1996(6) SCC 44)]. In Maruti Udyog's case, P&H High Court was dealing with the matter relating to the demand of duty pertaining to the damaged vehicles which were brought back by the company to their factory for repairs and taking into consideration the facts of the case, the High Court had held that clubbing of the claim under rules 173L and 173 H was justified. 45. The Division Bench of the Tribunal in Hindustan Zinc Ltd., case did not decide any point of law as such and entire issue was considered on the basis of the facts of the case. The law as undisputed by the parties was applied to the facts of the case and the matter was disposed of. 46. In Rajasthan Spinning and Weaving Mills case, the learned Single Member merely followed the decision in Hindustan Zinc case. In Gujarat State Fertilizers case, there was a clear admission about non-availment of adjustment. Therefore, the same is of no help to decide the matter in hand. 47. In Priya Blue Industries case, the Apex Court has clearly held that unless the order of assessment is reviewed under Section 28 or modified in appe....