TaxTMI 
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2022 (2) TMI 900
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.... 2014 to September 2016 36,91,475/- Om Shree Sai Ram Warehouse H No 139 Friends Colony Hisar 58/ST/R/2017- 18 dated 10.01.2018 06.09.2017 June 2015 to July 2016 51,62,039/- Staya Warehouse H No 178/4 Lajpat Nagar Hisar 59/ST/R/2017- 18 dated 31.12.2017 06.09.2017 April 2014 to June 2016 1,06,60,581/- 2.1 All the three appellants are registered with Service Tax department for rendering taxable services. They filed the refund claims, as detailed above, stating that they: * were providing storage and warehousing services to Food Corporation of India (FCI) through HAFED, Hisar and had collected the service tax during the relevant period from the service recipient; * had deposited the service tax on account of service tax to the department and same was also reflected in the ST-3 returns filed by them; * with effect from 01.07.2012, as per Section 66D(d)(v) of Chapter V of the Finance Act, 1994, the services rendered by them were covered under the category of Negative List and hence they were not required to pay service tax on the services so rendered; * had submitted a certificate from District Manager, HAFED, Hisar that they had not claimed any b....
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....tances of the case. As held by the Hon'ble High Court, in case of wrongly Paid Service Tax, the provision of 11-B should not be invoked. * Considering Financial Issue involved in all three cases are Approx Rs. 2 Crore appellants are suffering financial hardship due to interest * Assistant commissioner vide his order in original No 05/ST/R/HSR/2020-21 dated 27.11.2020 in case of Shree Balaji Warehouse, there was no Unjust Enrichment and burden thereof was not passed on anyone. * In case department feels any issue regarding storage of agriculture commodity, they have produced the following evidences: * A copy of stock registered is already submitted which clearly shows that only wheat was stored during this period no other commodity was stored. * Bills of wooden crates, fumigation, manpower, insurance medicine, Profit and Loss * Copy of Audit reports are already submitted in this regards. * The impugned order is without merits and should be set aside. 3.2 Learned Authorized Representative while reiterating the findings recorded by the Commissioner (Appeals) in impugned order, submitted as follows: * for providing storage and warehousing services under Section 62(102)....
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.... present case has paid certain amounts as service tax in respect of taxable services provided by him to HAFED/ FCI. Undisputedly appellant has throughout collected this amount paid by him as service tax leviable/ due in respect of these taxable services from the service recipient. Subsequently on the basis of certain legal opinion obtained by M/s FCI, on realizing that these services fall within the negative list, appellant has filed this refund claim. 4.3 Undisputedly the refund claim has been filed by the Appellant on the basis of the legal opinion obtained by the FCI and not on the basis of any determination towards the tax liability by any authority, tribunal or court, in their case. During the period for which the refund claim has been filed, the Appellant was self assessing his tax liability and reflecting the same in the ST-3 returns filed by them with the department. Nothing has been brought on record to show that appellant has sought modification of the self assessed return by way of an appeal to Commissioner (Appeals). 4.4 A three judge bench of Hon'ble Supreme Court has in case of ITC [2019 (368) ELT 216 (SC)] held that without the modification of the self assessment m....
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.... from the date of such judgment, decree, order or direction. It is provided in Section 27(1B)(c) that where any duty is paid provisionally under Section 18, the limitation of one year shall be computed from the date of adjustment of duty after the final assessment thereof or in the case of re- assessment, from the date of such re-assessment. The second proviso to Section 27 makes it clear that limitation of 1 year shall not apply where any duty or interest has been paid under protest. 37. Under Section 27(2)(a) it is incumbent upon the applicant to satisfy that the amount of duty or interest of which refund has been claimed, had not been passed by him to any other person, the provision aims at preventing unjust enrichment. 38. No doubt about it that the expression which was earlier used in Section 27(1)(i) that "in pursuance of an order of assessment" has been deleted from the amended provision of Section 27 due to introduction of provision as to self-assessment. However, as self-assessment is nonetheless an order of assessment, no difference is made by deletion of aforesaid expression as no separate reasoned assessment orde....
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....atter is not to be reopened in a proceeding for the refund which, if we may term it so, is in the nature of execution of a decree/order. In the case at hand, it was specifically mentioned in the order of the Assistant Collector that the assessee may file an appeal against the order before the Collector (Appeals) if so advised." (emphasis supplied) 40. In Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive) - 2004 (172) E.L.T. 145 (S.C.) = (2005) 10 SCC 433, the Court considered unamended provision of Section 27 of the Customs Act and a similar submission was raised which was rejected by this Court observing that so long as the order of assessment stands, the duty would be payable as per that order of assessment. This Court has observed thus : "6. We are unable to accept this submission. Just such a contention has been negatived by this Court in Flock (India) case (2000) 6 SCC 650. Once an order of assessment is passed the duty would be payable as per that order. Unless that order of assessment has been reviewed under Section 28 and/or modified in an appeal, that order stands. So long as the order of assessment stands the duty would be payable as per that order of....
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.... The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing : Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.] (2) Every appeal under this section shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf." 43. As the order of self-assessment is nonetheless an assessment order passed under the Act, obviously it would be appealable by any person aggrieved thereby. The expression ‗Any person' is of wider amplitude. The revenue, as well as assessee, can also prefer an appeal aggrieved by an order of assessment. It is not only the order of re-assessment which is appealable but the provisions of Section 128 make appealable any decision or order under the Act including that of self-assessment. The order of self-assessment is an order of assessment as per Section 2(2), as such, it is appealable in case any person is aggrieved by it. There is a specific provision made in Section 17 to pass....
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....aj.). In view of the aforesaid discussion, we are not inclined to accept the reasoning adopted by the High Court, that too is also not under the provisions of the Customs Act." 4.5 Argument is often advanced, that this decision of Hon'ble Apex Court is not applicable to the cases of refund of Service Tax. However we are not in position to agree with the said argument, as in para 45, Hon'ble Apex Court has clearly shown its disagreement with the reasoning adopted by the Hon'ble Rajasthan High Court in the case of Central Office Mewar Palace Org, which was the case the of service tax. The observations made by the Rajasthan High Court which have been disagreed by the Hon'ble Apex Court are reproduced below: "6. The matter was carried in further appeal before the learned Tribunal, and surprisingly, the Tribunal dismissed the appeal by adopting yet different reasoning, viz. that since the assessee had not challenged the assessment order, the claim of refund cannot be entertained, so as to indirectly challenge the assessment order, without filing statutory appeal, against the assessment order. It was also found, that in the case in hand, the order is appealable and no appeal having be....
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.... relies upon the decision in case of Awla Infra vs Punjab [2019-TIOL-2933- HC-P&H-ST]. 4.8 This argument made by the appellant, too cannot be sustained in view of the observations made by the Hon'ble Supreme Court in case of Mafatlal Industries [1997 (89) ELT 247 (SC)] as follows: "68. Re. : (I) : Hereinbefore, we have referred to the provisions relating to refund obtaining from time to time under the Central Excises and Salt Act. Whether it is Rule 11 (as it stood from time to time) or Section 11B (as it obtained before 1991 or subsequent thereto), they invariably purported to be exhaustive on the question of refund. Rule 11, as in force prior to August 6, 1977, stated that "no duties and charges which have been paid or have been adjusted....shall be refunded unless the claimant makes an application for such refund under his signature and lodges it to the proper officers within three months from the date of such payment or adjustment, as the case may be". Rule 11, as in force between August 6, 1977 and November 17, 1980 contained sub-rule (4) which expressly declared: "(4) Save as otherwise provided by or under this rule, no claim of refund of any duty shall be entertained". Se....
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.... validity of Section 20 of the Bombay Sales Tax Act (set out hereinbefore) on the ground that the Bombay Act contained adequate provisions for refund, for appeal, revision, rectification of mistake and for condonation of delay in filing appeal/revision. The Court pointed out that had the Bombay Act not provided these remedies and yet barred the resort to civil court, the constitutionality of Section 20 may have been in serious doubt, but since it does provide such remedies, its validity was beyond challenge. To repeat - and it is necessary to do so - so long as Section 11B is constitutionally valid, it has to be followed and given effect to. We can see no reason on which the constitutionality of the said provision - or a similar provision - can be doubted. It must also be remembered that Central Excises and Salt Act is a special enactment creating new and special obligations and rights, which at the same time prescribes the procedure for levy, assessment, collection, refund and all other incidental and ancillary provisions. As pointed out in the Statement of Objects and Reasons appended to the Bill which became the Act, the Act along with the Rules was intended to "form a complete ....
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....w", within the meaning of Article 265. In the face of the express provision which expressly declares that no claim for refund of any duty shall be entertained except in accordance with the said provision, it is not permissible to resort to Section 72 of the Contract Act to do precisely that which is expressly prohibited by the said provisions. In other words, it is not permissible to claim refund by invoking Section 72 as a separate and independent remedy when such a course is expressly barred by the provisions in the Act, viz., Rule 11 and Section 11B. For this reason, a suit for refund would also not lie. Taking any other view would amount to nullifying the provisions in Rule 11/Section 11B, which, it needs no emphasis, cannot be done. It, therefore, follows that any and every claim for refund of excise duty can be made only under and in accordance with Rule 11 or Section 11B, as the case may be, in the forums provided by the Act. No suit can be filed for refund of duty invoking Section 72 of the Contract Act. So far as the jurisdiction of the High Court under Article 226 - or for that matter, the jurisdiction of this court under Article 32 - is concerned, it is obvious that th....
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.... and the principles underlying Articles 38 and 39. Now, the right to refund arising as a result of declaration of unconstitutionality of a provision of the enactment can also be looked at as a statutory right of restitution. It can be said in such a case that the tax paid has been paid under a mistake of law which mistake of law was discovered by the manufacturer/assessee on the declaration of invalidity of the provision by the court. Section 72 of the Contract Act may be attracted to such a case and a claim for refund of tax on this score can be maintained with reference to Section 72. This too, however, does not mean that the taxes paid under an unconstitutional provision of law are automatically refundable under Section 72. Section 72 contains a rule of equity and once it is a rule of equity, it necessarily follows that equitable considerations are relevant in applying the said rule - an aspect which we shall deal with a little later. Thus, whether the right to refund of taxes paid under an unconstitutional provision of law is treated as a constitutional right flowing from Article 265 or as a statutory right/equitable right affirmed by Section 72 of the Contract Act, the r....
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....One of the important principles of law, based upon public policy, is the sanctity attaching to the finality of any proceeding, be it a suit or any other proceeding. Where a duty has been collected under a particular order which has become final, the refund of that duty cannot be claimed unless the order (whether it is an order of assessment, adjudication or any other order under which the duty is paid) is set aside according to law. So long as that order stands, the duty cannot be recovered back nor can any claim for its refund be entertained. But what is happening now is that the duty which has been paid under a proceeding which has become final long ago - may be an year back, ten years back or even twenty or more years back - is sought to be recovered on the ground of alleged discovery of mistake of law on the basis of a decision of a High Court or the Supreme Court. It is necessary to point out in this behalf that for filing an appeal or for adopting a remedy provided by the Act, the limitation generally prescribed is about three months (little more or less does not matter). But according to the present practice, writs and suits are being filed after lapse of a long number of ....
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....ir transactions are expressly left to be decided by the appropriate authorities under the Act as matters falling within their jurisdiction. Whether or not a return is correct and whether a transaction is exigible to tax or not are all matters to be determined by the authorities under the Act. The argument that the finding of the authority that a particular transaction is taxable under the Act is a finding on a collateral fact and, therefore, resort to civil court is open, was expressly rejected and it was affirmed that the whole activity of assessment beginning with the filing of the return and ending with the order of assessment falls within the jurisdiction of the authorities under the Act and no part of it can be said to constitute a collateral activity not specifically or expressly included in the jurisdiction of the authorities under the Act. It was clarified that even if the authority under the Act holds erroneously, while exercising its jurisdiction and powers under the Act that a transaction is taxable, it cannot be said that the decision of the authority is without jurisdiction. We respectfully agree with the above propositions and hold that the said principles apply with ....
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....avour just because in another assessee‟s case, a similar point is decided in favour of the manufacturer/assessee. (See the pertinent observations of Hidayatullah, CJ. in Tilokchand Motichand extracted in Para 37). The decisions of this Court saying to the contrary must be held to have been decided wrongly and are accordingly overruled herewith." 4.9 Thus the refund claim filed by the Appellant on the basis of the legal opinion obtained by FCI or the decision of tribunal in case of Punjab Warehousing Corpn Ltd., itself is not maintainable. Limitation under Section 11B: 4.10 Appellants rely on the decision of Delhi bench in case of Oriental Insurance Co Ltd [2020-TIOL-293-CESTAT-DEL] to submit that service tax was paid by the assessee under a mistaken notion that it was liable to pay, though it was not liable to pay, accordingly a refund was sought. In this decision tribunal division bench has referred to all other decisions referred to by the counsel for the appellant and by the learned Authorized Representative, so we are not referring to these decisions separately but refer to this decision in our further discussions as has been laid down by the Hon'ble Supreme Court in t....
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....e relevant provisions as discussed above." [emphasis supplied] 15. The decisions relied upon by learned Counsel for the Appellant and the learned Authorized Representative need to be examined. 16. In Doaba Co-operative Sugar Mills, the Supreme Court observed : "6.............But in making claims for refund before the departmental authority, an assessee is bound within four corners of the Statute and the period of limitation prescribed in the Central Excise Act and the Rules framed thereunder must be adhered to. The authorities functioning under the Act are bound by the provisions of the Act. If the proceedings are taken under the Act by the department, the provisions of limitation prescribed in the Act will prevail " 17. In M/s National Institute of Public Finance & Policy Service Tax Appeal No. 55433/2013(SM) decided on 24 November, 2017 = 2017-TIOL-4385-CESTAT-DEL by the Tribunal , the refund claim was rejected by the Principal Bench of the Tribunal, after placing reliance upon the decision of the Supreme Court in Doaba Co-operative Sugar Mills. But in the Appeal filed by M/s National Institute of Public Finance & Policy before the Delhi High Court (M/s National Institu....
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....by the assessee under a mistaken notion that it was liable to pay, though it was not liable to pay by virtue of a Circular dated 17 September, 2004 and, accordingly, a refund was sought. The Karnataka High Court examined whether section 11-B of the Excise Act would be applicable if the amount was paid under a mistaken impression that it was liable to be paid. The High Court found that section 11-B of the Excise Act refers to a claim for refund of duty of excise only and does not refer to any other amount collected without authority of law. Thus, it was held that section 11-B of the Excise Act would not be applicable. The relevant observations are as follows : "18. From the reading of the above Section, it refers to claim for refund of duty of excise only, it does not refer to any other amounts collected without authority of law. In the case on hand, admittedly, the amount sought for as refund was the amount paid under mistaken notion which even according to the department was not liable to be paid. 19. According to the appellant, the very fact that said amounts are paid as service tax under Finance Act, 1994 and also filing of an application in Form-R of the Central Excise Act wo....
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....itioner to demand refund of payment made by them under mistaken notion. xxxxxx xxxxxx xxxxxx 23. Now we are faced with a similar situation where the claim of the respondent/assessee is on the ground that they have paid the amount by mistake and therefore they are entitled for the refund of the said amount. If we consider this payment as service tax and duty payable, automatically, Section 11B would be applicable. When once there was no compulsion or duty cast to pay this service tax, the amount of Rs. 1,23,96,948/- paid by petitioner under mistaken notion, would not be a duty or "service tax" payable in law. Therefore, once it is not payable in law there was no authority for the department to retain such amount. By any stretch of imagination, it will not amount to duty of excise to attract Section 11B. Therefore, it is outside the purview of Section 11B of the Act." [emphasis supplied] 19. The Supreme Court, on 11 July, 2011, dismissed the Special Leave Petition filed by the Department to assail the aforesaid judgment of the Karnataka High Court. 20. The same view was taken by the Madras High Court in M/s 3E Infotech vs Customs, Excise & Service Tax Appellate Tribunal & Anr. -....
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....n levy is not in accordance with the provisions of the Act, such payment cannot be taken as payment made relatable to section 11-B of the Excise Act and, therefore, refund has to be allowed. The observations are as follows : "8. The learned counsel for the Department, relying on the judgment of the Hon'ble Supreme Court in Mafatlal Industries Ltd. and Others v. Union of India and Others [(1997) 5 SCC 536 = 1997 (89) E.L.T. 247 (S.C.)] = 2002-TIOL-54-SC-CX-CB would argue that even if the payment was made under a mistake, the refund can only be processed in terms of Section 11B of the Central Excise Act. In the above case, the Apex Court elaborately classified claim for refund into three groups or categories, vis-à-vis, (i) unconstitutional levy, (ii) illegal levy, and (iii) mistake of law, and held that the remedies involved in all the three categories are the remedies provided under the Excise and Customs Act. None of the above categories would attract to the case in hand. In this case, the levy was purely on account of mistake of fact in understanding the law. The petitioner assumed that the transaction for which he has paid tax, is covered under the law. The....
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.... a claim for refund of illegal levy of service tax or service tax collected without authority of law, the statutory limit prescribed in section 11-B of the Excise Act would be applicable. Two Learned Members of the Bench, after referring to the provisions of section 11-B of the Excise Act, observed as follows : "7. What is crucial is that the appellants paid the claimed amount as service tax. They have approached the jurisdictional authority of service tax for refund of the said money. It is clear that the jurisdictional service tax authority is governed by the provisions of Section 11B as the claim has been filed as per the said mandate only. Here, we have specifically asked the Learned Counsel for the appellant under what provision of law he is seeking the return of the money earlier paid. He admitted that the claim has been preferred in terms of the provisions of Section 11B. If that being the case, it cannot be said that except for limitation other provisions of Section 11B will be made applicable to the appellant. The Learned Counsel also did not advance such proposition. He repeatedly submitted that the amount is paid mistakenly. The same is not a tax and should be returned ....
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...."15.............As the Hon'ble High Court of Bombay has entertained the refund claim in Central Excise Appeals but not exercising writ jurisdiction power granted to the Hon'ble High Court under Constitution of India and allowed the refund claim holding that time limit prescribed under Section 11B of the Act is not applicable and the decision of Hon'ble Bombay High Court in Central Excise Appeals is binding on this Tribunal. Therefore, in my considered view, for entertaining the refund claim of amount paid by mistake, the time limit prescribed under Section 11B of the Act is not applicable." 26. What needs to be noticed is that the decision of the Delhi High Court in M/s National Institute of Public Finance & Policy was rendered on 23 August, 2018 after the decision of the Larger Bench of the Tribunal on 27 March, 2018. The Madras High Court also on 28 June, 2018 in M/s 3E Infotech held that when service tax is paid by mistake, a claim for refund cannot be barred by limitation under section 11-B of the Excise Act. 27. Learned Authorised Representative of the Department has also placed reliance upon the decision of the Bombay High Court in Andrew Telecom (I) Pvt. Ltd. t....
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....at the levy should have the colour of validity when it was paid and only consequent upon interpretation of law or adjudication, the levy is liable to be ordered as refund. When payment was effected, if it has no colour of legality, section 11B is not attracted. 32. In Collector of Central Excise, Chandigarh vs Kashmir Conductors 1997 (96) ELT 257 (Tri.) = 2002-TIOL-353 -CESTAT- DEL-LB , a Larger Bench of the Tribunal consisting of five Members held that the view taken by the jurisdictional High Court on a proposition of law has to be followed by the Tribunal and the observations are as follows : "10.2 In a recent decision of the Tribunal in the case of Madura Coats v. CCE, Bangalore reported in 1996 (82) E.L.T. 512, it has been held that the decision of a particular High Court should certainly be followed by all authorities within the territorial jurisdiction of that High Court and that the authorities in another State are not bound to follow the views taken by a particular High Court in the absence of a decision by the jurisdictional High Court with regard to constitutionality of a provisions. The Tribunal has held that since the adjudication of vires of a provision of a statute....
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....manufactured by the appellant for use as components of insulating device was assessed to duty under Tariff Item 23B-CET. In English Electric Co. of India Ltd. v. Superintendent, Central Excise & Ors., 1979 (4) E.L.T. (J 36), the Madras High Court held that such items were not dutiable under Item 23B. It is not disputed that this decision has been upheld by this Court. The appellant, therefore, on 12th and 16th June, 1978 filed two applications for refund of duty paid by it before the Assistant Collector for the period 1-4-1977 to 31-3- 1978 and 18-6-1975 to 31-3-1977 respectively. It was claimed that in view of the decision in English Electric Co. (supra), the insulators manufactured by the appellant could not have been classified under Tariff Item 23B. The Collector did not dispute the claim of the appellant that the insulators were not dutiable but the claim for refund was rejected as, according to the Collector, it was beyond six months, the period of limitation provided under Rule 11, as it then stood, for making an application for refund from the date the duty was paid. In appeal before the Tribunal, it was claimed that since duty had been paid under mistake of law, the claim ....
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....eeds to be examined for limitation as per the period of limitation laid down thereunder. Hon'ble Supreme Court has made the distinction between the statutory authorities created and functioning in terms of the Central Excise Act, 1944 and the courts having extraordinary jurisdiction under Article 226 of the Constitution. Undisputedly CESTAT is the statutory body created under the provisions of the Act, and is not having any extraordinary jurisdiction as conferred by Article 226 of the Constitution. Hence we are not in agreement with the view taken by the Delhi Bench, as above. Further we also note that this issue has been considered in detail by the larger bench in case of Veer Oversees Ltd and by majority view it was held that the refund claim will have to be considered only if filed within the period of limitation as provided by the Section 11B of the Central Excise Act, 1944. Hon'ble Supreme Court has in case of Paras Laminates [1990 (49) ELT 322 (SC)] has held as follows:- "6. The Tribunal is constituted by the Central Government under Section 129 of the Act. One of the members of the Tribunal is appointed by the Central Government as its President. Section 129 C says that the....
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....e powers of the Tribunal are no doubt limited. Its area of jurisdiction is clearly defined, but within the bounds of its jurisdiction, it has all the powers expressly and impliedly granted. The implied grant is, of course, limited by the express grant and, therefore, it can only be such powers as are truly incidental and ancillary for doing all such acts or employing all such means as are reasonably necessary to make the grant effective. As stated in Maxwell on Interpretation of Statutes, (eleventh edition) "where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution. 9. It is true that a Bench of two members must not lightly disregard the decision of another Bench of the same Tribunal on an identical question. This is particularly true when the earlier decision is rendered by a larger Bench. The rationale of this rule is the need for continuity, certainty and predictability in the administration of justice. Persons affected by decisions of Tribunals or Courts have a right to expect that those exercising judicial functions will follow the reason or ground of the judicial deci....
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.... expiry of six months from the relevant date. The explanation to Section 11B defines relevant date and in the case of the present petitioner the relevant date is the date of payment of duty which admittedly, were 28-6-1990 and 2-7- 1990 on which date the petitioner claims to have paid the duty in respect of the inputs by debiting the PLA account, although earlier he had taken the credit therefore. Admittedly, the claim for refund of the said amount of Rs. 1,97,243.15 paise was made on 15-1-1991 i.e. after the expiry of six months. It is for this reason that the Assistant Collector and the Collector (Appeals) held that the claim was barred by time. Learned counsel for the petitioner did not dispute that according to the provision of Section 11B the claim for refund was barred by time but he contended that Section 11B was not applicable because the duty was wrongly paid by the petitioner and amounts to illegal recovery. For this proposition he placed reliance on a judgment of the Bombay High Court in BTX Chemicals Pvt. Ltd. perusal of thesev. Collector of Central Excise - 1989 (41) E.LT. 377 (Bom.), Tata Engineering & Locomotive v. Union of India - 1994 (59) E.L.T. 460 (Bom.) = ....
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....not passing-on the burden of duty to others. Even if a suit is filed, the very same condition operates. Similarly, the High Court while examining its jurisdiction under Article 226 - and this Court while acting under Article 32 - would insist upon the said condition being satisfied before ordering refund. Unless the claimant for refund establishes that he has not passed on the burden of duty to another, he would not be entitled to refund, whatever be the proceedings and whichever be the forum. Section 11B/Section 27 are constitutionally valid, as explained by us hereinbefore. They have to be applied and followed implicitly wherever they are applicable." 4.16 Undisputedly the Appellants in the present appeals have filed the refund claims, under Section 11B of the Central Excise Act, 1944, as made applicable to service tax cases by virtue of Section 83 of the Finance Act, 1994, hence the refund claims have to be considered and decided as per the provisions of said section. In view of the decisions as above since we find that the refund claims have been filed beyond the period of limitation as prescribed by the Section 11B, the refund claims are barred by limitation. Unjust Enrichme....
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.... the duty under protest. It was argued on behalf of the respondent that NIIL had paid the excise duty under protest pending final assessment, which was ultimately decided in favour of NIIL and since NIIL had sold the product to the respondent herein, the respondent was entitled to the benefit of the second proviso to Section 11B(1) which inter alia stated that limitation of six months shall not apply where duty had been paid under protest. We do not find any merit in this argument. In the case of Bombay Tyre International Ltd. (supra), it has been held by this Court that Section 3 of the said Act is a charging section whereas Section 4 is a computation section which covers assessment and collection of excise duty. That the basis of assessment under Section 4 was the real value of excisable goods which included manufacturing cost and manufacturing profit but excluded selling cost and selling profit. That the price charged by the manufacturer for sale of the goods represented the real value of the goods for assessment of excise duty. In the case of Atic Industries Ltd. v. H.H. Dave, Asstt. Collector of Central Excise reported in [1978 (2) E.L.T. (J444) (S.C.) = AIR 1975 SC ....
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.... & Co. Ltd. [1994 (73) E.L.T. 331 (Tribunal)] that the turnover discount is not an admissible abatement on the ground that the quantum of discount was not known prior to the removable of the goods. In an appeal filed by the respondent-Assessee, this Court by its judgment dated 11-3-1997 in Addison & Co. Ltd. v. Collector of Central Excise, Madras (supra) held that the turnover discount is an admissible deduction. This Court approved the normal practice under which discounts are given and held that the discount is known to the dealer at the time of purchase. The Additional Solicitor General submitted that any credit note that was raised post clearance will not be taken into account for the purpose of a refund by the Department. We do not agree with the said submission as it was held by this Court in Union of India v. Bombay Tyre International (supra) that trade discounts shall not be disallowed only because they are not payable at the time of each invoice or deducted from the invoice price. It is the submission of the Assessee that the turnover discount is known to the dealer even at the time of clearance which has also been upheld by this Court. It is clear from the above that....
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....nd of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act; (d) the duty of excise paid by the manufacturer, if he had not passed on the incidence of such duty to any other person; (e) the duty of excise borne by the buyer, if he had not passed on the incidence of such duty to any other person; (f) the duty of excise borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify : Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government, the incidence of duty has not been passed on by the persons concerned to any other person. 3. Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal of any Court in any other provision of this Act or the rules made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub-section (2). 4. Every notification under proviso to sub-section (2) shall be laid before each House of Parliament, if it is sitting, as soon ....
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....m, for a certain period, on the basis of the rate fixed by the Central Government by notification in the Official Gazette in full discharge of his liability for the duty leviable on his production of certain goods, if after the manufacturer has made the payment on the basis of such rate for any period but before the expiry of that period such rate is reduced, the date of such reduction; [(e) in the case of a person, other than the manufacturer, the date of purchase of the goods by such person;] (ea) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of section 5A, the date of issue of such order;] (eb) in case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof;] (f) in any other case, the date of payment of duty.] SECTION 12A. Price of goods to indicate the amount of duty paid thereon. - Notwithstanding anything contained in this Act or any other law for the time being in force, every person who is liable to pay duty of excise on any goods shall, at the time of clearance of the goods, prominently indicate in all the doc....
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.... to claim deduction, is not entitled for a refund as he would be unjustly enriched. It will be useful to refer to the relevant para of Mafatlal Industries v. Union of India (supra) in this connection. "108. (iii) A claim for refund, whether made under the provisions of the Act as contemplated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately bor....
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....h duty has not been passed on by him to any other person. Section 11B(2) provides that, in case it is found that a part of duty of excise paid is refundable, the amount shall be credited to the fund. Section 2(ee) defines Fund to mean the Consumer Welfare Fund established under Section 12C. There is a proviso to Section 11B(2) which postulates that the amount of excise duty which is refundable may be paid to the applicant instead of being credited to the fund, if such amount is relatable to the duty of excise paid by the manufacturer and he had not passed on the incidence of such duty to any other person. Clause (e) to proviso of Section 11B(2) also enables the buyer to receive the refund if he had borne the duty of excise, provided he did not pass on the incidence of such duty to any other person. There is a third category of a class of applicants who may be specified by the Central Government by a notification in the official gazette who are also entitled for refund of the duty of excise. A plain reading of Clauses (d), (e) and (f) of the proviso to Section 11B(2) shows that refund to be made to an applicant should be relatable only to the duty of excise paid by the three categor....
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....not provide for refund of duty to the person who has actually borne the burden. There is no vice in the relevant provisions of the Act. Rules cannot be relied upon to impugn the validity of an enactment, which must stand or fall on its own strength. The defect in the Rules, assuming that there is any, can always be corrected if the experience warrants it. The Court too may indicate the modifications needed in the Rules. The Government is always prepared to make the appropriate changes in the Rules since it views the process as a "trial and error" method - says Shri Parasaran". 20. There was a further submission which was considered in the said judgment about the convenience/difficulty for the ultimate consumer to make applications for refund. In that connection it was held as follows :- "99. We agree with Shri Parasaran that so far as the provisions of the Act go, they are unexceptionable. Section 12C which creates the Consumer Welfare Fund and Section 12D which provides for making the Rules specifying the manner in which the money credited to the Fund shall be utilised cannot be faulted on any ground. Now, coming to the Rules, it is true that these Rules by themselves do not con....
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....buyer‟ in Clause (e) to proviso to Section 11B(2) of the Act cannot be restricted to the first buyer from the manufacturer. Another submission which remains to be considered is the requirement of verification to be done for the purpose of finding out who ultimately bore the burden of excise duty. It might be difficult to identify who had actually borne the burden but such verification would definitely assist the Revenue in finding out whether the manufacturer or buyer who makes an application for refund are being unjustly enriched. If it is not possible to identify the person/persons who have borne the duty, the amount of excise duty collected in excess will remain in the fund which will be utilized for the benefit of the consumers as provided in Section 12D. 22. The High Court proceeded on an erroneous assumption of fact as well. It was held by the High Court that there is no unjust enrichment as the burden has not been passed on. The High Court‟s interpretation of Section 11B is also not correct." 4.21 The decision of Hon'ble Punjab and Haryana High Court in case of Awla Infra referred earlier also do not support the case of the appellant. In case of Awla Infra, the....