2024 (3) TMI 9

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....nd Service Tax Appellate Tribunal, Regional Bench, Allahabad. By that order, the Tribunal has allowed the assessee's appeal and provided for refund of entire amount Rs. 6,95,52,000/- being excise duty paid under protest against demand created on alleged manufacture and clearance of 'Zarda Scented Tobacco'. 3. Present appeal has been passed on the following questions: "(1) Whether on the facts and in the circumstances of the case the CESTAT is justified in law in holding that the provisions of "Unjust Enrichment" cannot be applied, if the Central Excise Duty has been paid under Compounded Levy Scheme, made applicable in terms of Section 3-A of the Central Excise Act, 1944? (2) "Whether on the facts and in the....

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....facture of 'Zarda Scented Tobacco', after two months. Revenue authorities collected samples of the alleged commodity - 'Zarda Scented Tobacco', on 1.4.2014. Relying on its report, revenue authorities subjected the assessee to duty demands on the alleged manufacture of 'Zarda Scented Tobacco'. Consequently, the assessee was forced to deposit Rs. 6,95,52,000/- towards that demand of excise duty. It was computed on compounding basis. 7. That matter of classification dispute reached the Tribunal (in the first leg of litigation) being Excise Appeal No. 70681 of 2019 (M/s Maa Vindhyavasini Tobacco Pvt. Ltd. vs Commissioner, Central Excise and Central Goods & Service Tax). The appeal was allowed on 2.2.2022, on the follo....

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...., the presumption of passing - on the duty liability was disbelieved. Relevant to our discussion, the Tribunal has observed as below: "19. We find that it is astonishing to note that the department is missing a simple thing to notice that the company was paying excise duty liability on compounding basis i.e. its liability was fixed on the basis of no. of machines. Accordingly, the company was responsible to pay excise duty even if it had not produced a single pouch of scented tobacco jarda or branded chewing jarda as the case may be and if this was so it is beyond comprehension that how the company could take excise duty as component of cost for fixing price as mentioned in the order at several places. 20. We observe that ....

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....ing and disclosing transactions in the Audited Financial Statements. 22. We find that the company had to pay excise duty irrespective of sale/production under compounding scheme, therefore, it has correctly debited entire amount to profit and loss account. The refund amount constitutes the entitlement of the company on account of excess excised duty paid and mere change in nomenclature i.e called pre-deposit or deposited under protest etc. does not change the essence of transaction. Under no circumstance compoundable excise duty can be shown anywhere else but as a reduction from Revenue from Operation. recovery of excise duty is not possible. 23. It is an established fact on record that the amount of refund i.e., Rs. 6,95,....