TaxTMI 
TaxTMI 
2024 (7) TMI 104
X X X X Extracts X X X X
X X X X Extracts X X X X
....ms of Notification No.50/2003-CE dated 10.06.2003; the appellants also claimed exemption, on clinkercaptively consumed in the manufacture of cement, under the Notification No.67/95-CE dated 16.03.1995 (M/s ACC Ltd. from February 2005 and M/s Ambuja Cement Ltd. from May 2005); the claims of the appellants was denied by the Department by passing an order-in-original in this regard; on appeals filed by the appellants, Commissioner (Appeals), directed the appellants to pay the full amount, as pre-deposit, under Section 35F, as may be computed by the jurisdictional Assistant Commissioner, Shimla; Commissioner (appeals) rejected the appeals, vide Order dated 30.06.2005 in respect of ACC Ltd. and vide Order dated 28.09.2005; accordingly, the appellants paid the full amount as pre-deposit and filed appeals before CESTAT, which also rejected their applications for stay; CESTAT dismissed the appeals filed by the appellants (vide Order dated 15.12.2005 in respect of M/s ACC Ltd. and Order dated 07.03.2006 in respect of M/s Ambuja Cement Ltd.). Aggrieved by the orders of the Tribunal, M/s ACC Ltd filed Civil Appeal No.2793 of 2006 and M/s Ambuja Cement Ltd. filed Civil Appeal No.2912 of 2006 b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... provisions under Central Excise. He also submits that Courts and Tribunals have been continuously holding that amount deposited during the pendency of adjudication proceedings or investigation is in the nature of deposit made under Protest and principles of unjust enrichment are not applicable. He relies on the following cases: • Daily Thanthi v. Commissioner of Customs (Appeals), Chennai - 2021 (376) ELT 615 (Mad.); • National Organic Chemical Industries Ltd. v. C.C. (Import), Mumbai - 2021 (378) ELT 314 (Tri.-Mumbai); • Hawkins Cookers Ltd. v. CCE, Chandigarh - I-2017 (6) G.S.T.L. 308 (Tri-Chan.) • CCE, Coimbatore vs. Pricol Ltd. - 2015 (320) ELT 703 (Mad.); • CCE, Lucknow vs. Eveready Industries India Ltd. - 2017 (357) ELT 11 (All.); • M/s Allied Chemical & Pharmaceuticals Pvt. Ltd. v. CCE&ST, Jaipur - I - Final Order Nos. 50146-50163/2019; • CCE v Eveready Industries India Ltd - 2017 (357) ELT 11 (All)- • Dewsoft Overseas P. Ltd v CST - Final Order No. 50781/2019 dt. 17-6-2019 4. Learned Counsel for the appellant submits also that Section 11B of the Central Excise Act 194....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by the appellant takes the colour of "Duty", still the appellants satisfied the test of unjust enrichment; it is evident from the C.A. certificate dated 12.05.2017, the sale price of cement are market-driven in various States and the appellants do not have ability to control the sale price or the marginby passing on the duty to the customers; the pre-deposit pertains to only one plant whereas cement is manufactured by the appellants in various plants in various states and sold at uniform rate during the relevant period; there is neither a possibility nor evidence thereof to assume that the amount deposited by the appellant was included in the sale price. He submits that Hon'ble Bombay High Court in the case of Sandvik Asia Ltd. - 2015 (323) ELT 431 (Bom.) that it is immaterial and irrelevant as to what the assessee terms the pre-deposit amount in his books of accounts and even if it is shown on the expenses side, the presumption that the burden has been passed on to the consumer cannot be raised. He also relies on the following cases: • Elantas Beck India Ltd. vs. CCE & S.T., LTU - 2016 (339) ELT 325 (Tri. - Mumbai) • M/s Allied Chemical & Pharmaceutical....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the Revenue, takes the bench through the provisions of Section 35F of Central Excise Act, 1944 and submits that the appellants have not made deposit in terms of Section 35F but have paid the duty on manufacture of clinker as per the order dated 24.06.2005, after dismissal of their appeal by the Hon'ble Tribunal; the amount was paid in terms of Section 35N ibid; amount paid under Section 35 N is not a pre-deposit but is payment of duty; the appellant has availed the Cenvat credit on the inputs used in manufacture of Clinker (Cenvat Credit can be claimed only on the duty incidence on final products) and on the other hand has claimed that the amount was being deposited under protest; the stand taken by the appellant is self-contradictory; either there can be a case where amount is paid under protest and refund is claimed or Cenvat credit has been availed and duty of incidence has been passed on to the consumers; no refund is admissible. 9.1. Learned Special Counsel reads over the provisions of Section 35 FF and further submits that the appellants have claimed interest on refund from 2005 to 2013; interest is payable under Section 35 FF of the Central Excise Act, 1944 (inserted by....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... year 2005 to 2013 and not as the amounts as receivable in the financial statements. 11. Learned Special Counsel submits in addition that as per Section 12B read with Section 11B of the Central Excise Act, 1944, the burden of proof is on the appellant to prove that the incidence has not been passed on to the consumers; as per Section 12B, the presumption is that if the excise duty is paid it shall be deemed that the incidence of duty has been passed on to the consumer, unless it is proved that the burden of duty has not been passed on to the ultimate consumers; the appellant failed to prove that the incidence of duty has not been passed on to the consumers. 12. Learned Special Counsel further submits that it is relevant to note here that the Order in Original rejecting the claim for refund was passed on 16.09.2016, whereas the appellant had procured CA certificate on 12.05.2017 i.e. after the date of order in original; it clearly shows that CA certificate was procured to fill up the lacuna. He submits that the CA certificate dated 12.05.2017 certifies only that all the monthly & annual financial statements are correct for the period 2010 to 2015 and that a series of variation....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Supreme Court Rules, 2013 which provide that in any case under appeal to the Hon'ble Supreme Court, the Court may subject to such terms and conditions as it may think fit to impose grant stay. 14. Learned Counsel for the appellants submits further that the contention of the Special Counsel that Section 35FF provides for interest only on refunds of amounts deposited pursuant to orders of the Commissioner (Appeals) and Tribunal under First Proviso and not on amounts deposited pending appeal before Hon'ble Supreme Court is incorrect; even the amount deposited during the appeal before Hon'ble Supreme Court is a pre-deposit under Section 35F and consequently, there can be no rational basis to deny interest under Section 35FF on refund of such deposit; in case the submission of the Special Counsel for Revenue is accepted, right to interest continues to be governed by the judgment of the Hon'ble Supreme Court in the case of ITC Ltd. (supra) which was followed by Tribunal in the case of Parle Agro Pvt. Ltd.-20222 (380) ELT 219 wherein it was held that when there is no provision in the Central Excise Act for grant of interest on refund of deposit, interest is to be given @ 12% Per An....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... once the commissioner (appeals) dismissed the appeal, the amounts pre-deposited lost the character of pre-deposit and acquired the character of duty and hence refund was subject to bar of unjust enrichment; the first appellate authority has not examined the appellants' plea that the duty paid by them is in the nature of deposit and hence not subject to the rigors of unjust enrichment; he has proceeded on the premise that unjust enrichment is applicable; as the appellants debited the amounts to profit and loss account and thus, the appellants have passed on the incidence of duty to their customers. 16. The lower Adjudicating Authority concerned himself with the four questions i.e. Whether there was an excess payment of duty necessitating subject refund claim, if so, for what amount? Whether the claim was filed in time? Whether the appellants are entitled for interest under Section 35FF? and whether the subject claim is hit by bar of unjust enrichment? We find that the Original Adjudicating Authority has given findings on the questions framed as follows: (i) The appellants have filed refund claims for the amounts mentioned therein and have agreed to deduct the CENVAT cre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r dismissal of their appeal by the Hon'ble Tribunal; the amount was paid in terms of Section 35N ibid; amount paid under Section 35 N is not a pre-deposit but is payment of duty; • the appellants have availed the Cenvat credit on the inputs used in manufacture of Clinker (Cenvat Credit can be claimed only on the duty incidence on final products) and on the other hand have claimed that the amount was being deposited under protest; the stand taken by the appellant is self-contradictory; • Order in Original rejecting the claim for refund was passed on 16.09.2016, whereas the appellant had procured CA certificate on 12.05.2017 i.e. after the date of order in original; it clearly shows that CA certificate was procured to fill up the lacuna; • interest is payable under Section 35 FF of the Central Excise Act, 1944 (inserted by finance act, 2008 w.e.f. 10.05.2008), on delayed refund; interest under Section 35 FF is payable only where an amount is deposited by the appellant under Section 35 F is required to be refunded consequent upon the order of the appellate authority; in the instant case as the entire amount was not deposited under Section 35F, in....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 20. On going through the records of the case and the rival contentions, we find that the following are the issues that require our consideration in the instant case. (i) Whether the duty continued to be paid by the appellants, under protest, during the pendency of the appeal qualifies to be pre-deposit for the purposes of Section 35F of Central Excise, Act, 1944? (ii) Whether the provisions of Section 11B and the doctrine of unjust enrichment are applicable to such payments? (iii) Whether the appellants are eligible to claim interest on the amount duty paid or deposited? and if so, at which rate? 21.. We find that it will be beneficial to have a look at the provisions of Section 35F of the Central Excise Act, 1944. Section 35F, as it existed prior to 06.08.2014,is as follows. SECTION 35F: Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of central excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against: Provided that the amount required to be deposited under this section shall not exceed rupees ten crores: Provided further that the provisions of this section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No.2) Act, 2014. Explanation. - For the purposes of this section "duty demanded" shall include, - (i) Amount determined under Section 110; (ii) Amount of erroneous CENVAT credit taken; (iii) Amount payable under Rule 6 of the CENVAT Credit Rules, 2001 or the Cenvat Credit Rules, 2002 or the CENVAT Credit Rules, 2004 22. It appears from the above, that prior to 06.08.2014, a person who desires to prefer any appeal, against the order of any adjudicating authority, had to deposit the duty demanded or the penalty levied pending the appeal. However, Commissioner (Appeals) or the Appellate Tribunal were conferred with the power to dispense with such deposit subject to such conditions as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shortfall from the amount stipulated under these sections shall have to be paid before filing of appeal before the appellate authority. As a corollary, amounts paid over and above the amounts stipulated under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962, shall not be treated as deposit under the said sections. 3.2 Since the amount paid during investigation/audit takes the colour of deposit under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962 only when the appeal is filed, the date of filing of appeal shall be deemed to be the date of deposit made in terms of the said sections. 3.3 In case of any short-payment or non-payment of the amount stipulated under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962, the appeal filed by the appellant is liable for rejection. 24. We find that during the impugned period i.e. 2005-2015, the appellants continued to pay duty under Protest and indicated the same in the ER-1 Returns as follows: (i) M/s ACC Ltd.- Remarks: Excise duty & Education Cess on clinker captively consumed in July, 05 (75857mt) a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re any order to be passed before making such deposit. Deposit of the said amount is a pre-condition for entertaining the appeal. What is important to note is that the amount to be deposited before the appeal can be entertained on merits is nothing else but the amount of duty and/or interest, or penalty demanded in consequence of an order-in-original. In principle the deposit is of duty or interest or penalty. The term "pre-deposit" is conveniently used to denote payment before entertaining the appeal. It is only a mode of payment prescribed by legislature with an intention to protect interest of Revenue. 7. However, if the person desirous of preferring appeal seeks waiver of the pre-deposit on the ground of undue hardship as contemplated under sub-section (2) of Section 129E, he is required to file an application seeking dispensation of such deposit, in which case he is required to make the pre-deposit in terms of the order that may be passed by the Commissioner (Appeals) or the Appellate Tribunal. Thus, the contention that it is only the payment made pursuant to any order of any appellate authority or judicial forum under Section 129E or Section 131 of the Act would fall ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....clearance of the imported goods pending its appeals before the Hon'ble Supreme Court cannot be said to be a "duty" for the purpose of Section 27 of the Customs Act, 1962. Therefore, presumption under section 28D of the Customs Act, 1962 that the incidence of duty paid has been passed on to the buyer cannot be inferred. 90. Amounts paid pursuant to an adverse order passed under Section 28 of the Customs Act, 1962 whether under Section 129E or under Section 131 of the Customs Act, 1962 are not "duty" for the purpose of Section 27 of the Customs Act, 1962. 91. In Union of India v. Suvidhe Ltd., (2016) 11 SCC 808, the Hon'ble Supreme Court held that provisions of Section 11B can never be applicable for refund of the amount deposited by way of pre-deposit under Section 35F for availing the remedy of an appeal. It must be recalled that Section 11B of the Central Excise Act, 1944 is parimateria with Section 27 of the Customs Act, 1962. 92. The Court further held that a deposit under Section 35F (which is parimateria with Section 129E of the Customs Act, 1962) is not a payment of duty but only a pre-deposit for availing the right of appeal. Such amount is bound t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s not evoke resonance from us. It would not be wrong to posit that 'pre-deposit' is contingent not upon orders of the Tribunal but on carrying disputes to the Tribunal. 13. It is consistent with this provision that, while an aggrieved person may have the right impugn the order causing grievance, the sanctity of the order remains unimpaired unless stayed by the appellate authority. The purpose of the proviso in Section 129E of Customs Act, 1962 is to forestall initiation of recovery proceedings during the pendency of appeal and for 'pre-deposit' to be restricted as designating only those that are in compliance with such conditions, as may be prescribed for grant of stay, would that inconsistent with the intent. This has been articulated by a Larger Bench of the Tribunal in Haldiram India Pvt. Ltd. v. Commissioner of Central Excise, Delhi [2014 (309) ELT 81 (Tri. - LB)] thus '6....... As a consequence of the amendment (substitution) of Section 35F w.e.f. 6-8-2014 the earlier requirement under provision (of having to deposit the entirety of the adjudicated liability subject of waiver, either wholly or pro tanto of the pre-deposit by the Tribunal on exercise of discre....
X X X X Extracts X X X X
X X X X Extracts X X X X
...." is conveniently used to denote payment for entertaining the appeal. It is only a mode of payment prescribed by legislature with an intention to protect interest of Revenue. However, if the person desirous of 7. preferring appeal seeks waiver of the pre-deposit on the ground of undue hardship as contemplated under sub-section (2) of Section 129E, he is required to file an application seeking dispensation of such deposit, in which case he is required to make the pre-deposit in terms of the order that may be passed by the Commissioner (Appeals) or the Appellate Tribunal. Thus, the contention that it is only the payment made pursuant to any order of any appellate authority or judicial forum under Section 129E or section 131 of the Act would fall within the ambit of pre-deposit under the said provision is fallacious and contrary to the provisions of the section itself and as such does not merit acceptance' 16. In view of the specific provision of Section 129E of Customs Act, 1962, as elaborated by us, and the several decisions cited supra, the position adopted in the impugned order that the original authority was, in discarding the claim of the appellant that the pay....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rder, the refund claim of the assessee was sanctioned treating the said amount as pre-deposit of Section 35F of the Act, therefore, the said issue cannot be raised by the Revenue at this stage and this issue has also answered in favour of the assessee. 30. Madras High Court in the case of CCE, Coimbatore vs. Pricol Ltd (Supra) held that 7. The first question of law, which is raised, relates to the plea of unjust enrichment and much emphasis is laid on the decision of the Supreme Court in Mafatlal Industries case [1997 (89) ELT 247 (SC)]. Relevant portion of the order passed by the Supreme Court in Mafatlal Industries case (supra) has been extracted in the grounds (b) and (c). There is no dispute with regard to the proposition of law as laid down by the Supreme Court. In the present case, as is evident from the records, it is not a case of refund of duty. It is a pre-deposit made under protest at the time of investigation, as has been recorded in the original proceedings itself. In this regard, it has to be noticed that it has been the consistent view taken by the Courts that any amount, that is deposited during the pendency of adjudication proceedings or investigation i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bsequently, in appeal, assessment order was set aside and question of refund arose. An argument was raised that unless assessee proves that he has not passed on incidence of duty to any other person, refund cannot be allowed. Court held 'it is not a case of refund of duty but return of pre-deposit made by assessee at the time of investigation under protest'. Court has said as under: "There are also very many judgments of various Courts, which have also reiterated the same principles that in case any amount is deposited during the pendency of adjudication proceedings or investigation, the said amount would be in the nature of deposit under protest and, therefore, the principles of unjust enrichment would not apply. In view of the catena of decisions, available on this issue, this Court answers the first substantial question of law against the Revenue and in favour of the assessee." 5. Madras High Court in Commissioner of Central Excise v. Pricol Ltd. (supra) relied on a Bombay High Court judgment in Suvidhe Ltd. v. Union of India - 1996 (82) ELT 177 (Bom.); Gujarat High Court judgments in Commissioner of Customs v. Mahalaxmi Exports - 2010 (258) ELT 217; Parle Inte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Act and has to be treated accordingly. 33. We find that the provisions of Central Excise, Act, 1944 are parimateria with the provisions of Customs Act, 1962 so far as the appellants relate to appeals. In the case on hand, both the appellants have deposited the amount as confirmed by the order of the original authority and continued to deposit the amount equivalent to duty under protest during the pendency of their appeal before Commissioner(appeals); tribunal and Hon'ble Supreme Court, who were not inclined to grant a stay. The appellants had no choice but to deposit the amount of duty in order to exercise their right to appeal. It was held by Hon'ble Bombay High Court in the case of Suvidhe (Supra) that the amount is deposited by the Petitioners is not towards Excise Duty but by way of deposit under Section 35F for availing the remedy of an appeal. This decision was affirmed by Supreme Court also (supra). In the instant case, Hon'ble apex Court has finally decided the issue in favour of the appellants, vide their order dated 21.08.2015, holding that appellants are not required to pay duty on the clinker manufactured by them and captively consumed. We find that the original au....
X X X X Extracts X X X X
X X X X Extracts X X X X
....while considering that the amounts continued to be deposited, by the appellants from time to time during the pendency of the appeals, lost the colour of a deposit, with the First appellate authority held that the appellants were required to pay duty, have considered the refund claim, filed in 2015, for amounts deposited during 2005-2015, to have been filed within the time limit prescribed under Section 11B. If the lower authorities held the amounts paid by the appellants, during 2005-2015, to be duty, in no way, the refund claims, filed by the appellants in 2015, could have been considered to have been filed in time. 35. In view of the judicial pronouncements on the issue, as discussed above, we are of the considered opinion that the amounts, deposited/paid by the appellants, during the pendency of the appeals, have to be considered as a mandatory pre-deposit made under Section 35F. We find that the submissions of the learned special counsel for the revenue that only the deposits made pursuant to the orders of Commissioner (Appeal) and CESTAT, under first proviso, have to be considered as deposits for the purposes of Section 35F, are not legally tenable. We find that prior to 06....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to be refunded when the appeal is allowed with consequential relief. 37. We find that CBEC vide Circular No.275/37/2K-CX A dated 02.01.2002 clarified that pre-deposit made during the pendency of appeal is other than duty and such deposits should be returned in the event the appellant succeeds in appeal. The said clarification was reiterated in Circular No.802/35/2004-CE dated 08.12.2004; Hon'ble Apex Court has approved both the circulars in their decision CC Vs Fina cord Chemicals Pvt. Ltd. - 2015 (319) ELT 616 (SC) while reaffirming their decision in the case of Suvidhe Ltd (supra). 38. Hon'ble Madras High Court, in the case of CCE, Coimbatore Vs Pricol Ltd, held that: 7. The first question of law, which is raised, relates to the plea of unjust enrichment and much emphasis is laid on the decision of the Supreme Court in Mafatlal Industries case [1997 (89) ELT 247 (SC)]. Relevant portion of the order passed by the Supreme Court in Mafatlal Industries case (supra) has been extracted in the grounds (b) and (c). There is no dispute with regard to the proposition of law as laid down by the Supreme Court. In the present case, as is evident from the records, it is not a ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....zers & Chemicals Ltd. vs. Commissioner Central Goods and Service Tax, Uadipur(2023) 3 Centax 121 (Tri.-Del). 40. Tribunal in the case of Dewsoft Overseas P. Ltd v CST - Final Order No.50781/2019 dt. 17-6-2019 observed that: 21. It is, therefore, clear from the aforesaid decisions that any amount deposited during the pendency of adjudication or investigation is in the nature of a deposit and, therefore, cannot be towards payment of service tax or excise duty. The principles of unjust enrichment, therefore, would not apply if a refund is claimed for refund of this amount. 41. However, in the case of Sahakari Khand Udyog Mandal Ltd 2005 (181) ELT 328 (SC) observed in the facts and circumstances of that case that unjust enrichment is applicable even in the case of refund of pre-deposit on the principles of equity. However, in a few subsequent judgments in Apex Court has held that in the case of refund of deposits made under Section 35F are not hit by the provisions of Section 11B while affirming the decision of Bombay High Court in the case of Suvidhe (Supra). We find that Hon'ble Bombay High Court in the case of Sandvik Asia Ltd.-2015 (323) E.L.T. 431 (Bom.) held that r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ferent and there is no finding in this case that the appellant have collected the disputed amount from anybody. Secondly, I find that so far the amount of Rs. 6 lakhs deposited during the investigation is concerned, the said amount was paid under protest and also relying on the ruling of this Tribunal in the case of Plas Pack Industries (supra) wherein it was held that bar of unjust enrichment is not attracted. So far the amount of Rs. 4 lakhs deposited as pre-deposit under Section 35F of the Act following the Hon'ble Bombay High Court's decision in the case of Suvidhe Ltd. (supra), I hold that the doctrine of unjust enrichment is not attracted on the said amount. 43. Tribunal in the case of National Organic Chemical Industries Ltd2021 (378) ELT 314 (Tri. - Mumbai), also discussed the decision of Hon'ble Apex Court in the case of Sahakari Khand Udyog Mandal Ltd and held that in the particular facts of the case the ratio is not applicable. We find that the unmissable conclusion, of the above discussion, is that the refund of amounts deposited during the pendency of appeal are not subjected to the provisions of Section 11B; however, the bar of unjust enrichment is applicable as pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o that of Sahakari Khand Udyog Mandal Ltd is not applicable. 45. In addition to the above, the assessments made during the pendency of appeal, though on self-assessment basis, are to be considered as provisional assessments which are deemed to have been finalised after the decision of the Hon'ble Apex Court in favour of the appellants notwithstanding the fact that the procedure of provisional assessments are not followed. Hon'ble Supreme Court in the case of Allied Photo graphics India Ltd 2004 (166) ELT 3 (SC) held that: 14. As stated above, Para 104 of the judgment in the case Mafatlal Industries Ltd. (supra) states that if refund arises upon finalisation of provisional assessment, Section 11B will not apply. Para 104 of the said judgment does not deal with payment under protest. In the light of what is stated herein, we may now consider the judgment of this Court in the case Sinkhai Synthetics & Chemicals Pvt. Ltd. (supra). In that matter, the assessee was a manufacturer. The assessee claimed exemption which was denied by the Department. The assessee went in appeal to CEGAT. Pending appeal, assessee paid excise duty under protest. The assessee succeeded before the CE....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pay duty on clinker captively consumed by them, amounts deposited by the appellants during the pendency of the appeal do not take colour of duty and therefore, have to be considered as amounts deposited. Legally, the same cannot be retained by the Government. Therefore, we find that the amounts deposited by the appellants, under protest, during the pendency of appeal, is a pre-deposit for the purposes of Section 35F and thus, provisions of Section 11B are not attracted, in view of a catena of judgments and the CBEC/CBIC Circulars No.275/37/2K-CX A dated 02.01.2002;No.802/35/2004-CE dated 08.12.2004 and No. 984/8/2014-CX, dated 16th September, 2014.Thus, the second question under consideration is answered in the negative. 47. Without prejudice to the above averments, learned Counsel for the appellants submits that even on the issue of unjust enrichment, learned Commissioner (Appeals) was not correct in rejecting the refund claim of the appellants; merely because the amounts were debited to expenses in Profit & Loss Account, it does not necessarily follow that the incidence of duty was passed on to the buyers; the Chartered Accountant certificate has clearly established that the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e debited the amount deposited to expenses in Profit & Loss Account would not in itself be an indication that the incidence of duty has been passed on. The Chartered Accountant in his certificate has been categorical in asserting that the prices of cement being market-driven, the appellants do not have capacity to pass on the incidence of duty to the customers. We find that the impugned order has not controverted the said certificate. It is not open for Revenue to arrive at a conclusion in disregard of the certificate without challenging or controverting the same with cogent evidence and reasoning. 50. Hon'ble Delhi High Court in the case of Hero Motor Corp. Ltd. - 2014 (302) ELT 501 (Del.) held that: 17. While examining the question whether or not burden of duty has been discharged by the assessee, one has to be practical and adopt a realistic approach and not be oblivious as to nature and character of proof which will be available. When the assessee is able to show that the burden of duty has not been passed on, he asserts and submits affidavits and certificate of a chartered accountant along with copy of the balance sheet, indicates and shows sales invoices for pre a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llants in the present matter has produced a Certificate dated 24-12-96 from the Chartered Accountant wherein the cost structured of a montego car was given and it included "selling, general and other overheads" also. Except alleging that the overhead, is on the higher side, Revenue has not brought on record any material in support of that contention and to falsify the Certificate given by the Chartered Accountant. The Chartered Accountant has given the Certificate after verifying the books of accounts produced and information furnished to them. The Revenue has to controvert the Certificate by adducing material or evidence based on records. It can not simply brush aside the Certificate by observing that the details of overheads were not furnished. The Revenue can not arbitrarily fix the percentage of overhead. The learned Advocate has also produced a copy of the audited balance sheet along with schedules and notes of 31-3-1996 according to which the amount of refund claimed by them has been shown as Customs Deposits under the Head "Loans and Advances" and has contended that this goes to show that the incidence of duty was not passed on to their customers. In the case of Jaipur Synte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....proved. In the show cause notice it has been alleged that certain expenses viz., depreciation and financial expenses have not been considered in the assessable value. The appellants have vehemently sought the basis of this assertion by the Revenue. The appellants have also sought the data on the basis of which the said expenses have been quantified, in the second round of litigation also. Revenue has not only failed to provide the same but also refused to provide the same. If a Chartered Accountant's certificate needs to be rejected then there has to be some concrete basis for rejection of the same. Similarly, if any amount needs to be included in assessable value that revenue has to be some concrete basis for quantification of such amount. The same also needs to be communicated to the appellant to enable them to defend their case. In the instant case, revenue has failed to do so. In the absence of any reasonable ground for rejection of the Chartered Accountant's certificate, the same cannot be rejected. 55. Tribunal in the case of Shyam Coach Engineers- 2024 (1) TMI 245-CESTAT New Delhi held that: 5.8 Department has relied upon the decision of this Tribunal, Mumbai Ben....
X X X X Extracts X X X X
X X X X Extracts X X X X
....regarding the correctness and genuineness of the Cost Accountant Certificate. Revenue has not controverted the Chartered Accountant certificate. It is trite in law that the Chartered Accountant Certificate is one of the sufficient conditions to substantiate that the incidence of duty has not been passed on to the customers; the onus to disprove the Chartered Accountant Certificate is on the Department and the same has not been discharged. The certificate was issued after going through the accounts of the appellants and after satisfying himself about the truthfulness of the same. A certificate given by a professional cannot be dis-regarded unless it is proved to be blatantly wrong and contrary to the facts and evidence available on the hand. Thus, the certificate given by the Cost/Chartered Accountant has an evidentiary value and cannot be rejected in a half-handed manner. The impugned order having been issued without giving reasons as to why the same has not been taken into account cannot be held to be legally sustainable. 57. Learned Special Counsel for the Revenue submits that the appellants have availed Cenvat Credit on one hand and on the other hand have claimed that the amo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ounts deposited by the appellants, during the pendency of appeal, to exercise right of appeal, amount to pre-deposit under Section 35F and that such refund claims are not subject to the provisions of Section 11B and proceeds to credit the refund to the consumer welfare fund instead of refunding the same to the appellants. We find that the presumption contained in the provisions pertaining to refund of Central Excise duty are rebuttable. The appellants have submitted evidence and argument in their favour. To that extent, we find that the presumption has been rebutted by the appellants. As a result, it is for the Department to negate the evidence submitted by the appellants. We find that while doing so, the Revenue, instead of analysing the rebuttal submitted by the appellants and instead of discarding the Chartered Accountant certificate with tangible evidence and cogent arguments, continued to entertain the opinion that the appellants have passed on the duty, paid on clinker cleared for captive consumption, to the customers, on the basis of their accounting practice. Revenue has not taken into consideration that the appellants have cement plants all over the country and are not in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ue of payment of interest on the delayed payment of refund of pre-deposit. Learned Counsel for the appellants submits that since the deposit was made under Protest as pre-deposit, the appellants are entitled for interest under Section 35FF as introduced w.e.f. 10.05.2008; even before 10.05.2008, the appellants are eligible to pay interest as per the settled provisions of law in the case of Hawkins Cookers Ltd. (supra) Bharat Petroleum Corporation Ltd. (supra). He further submits that even if it is held that the refund is subject to the provisions of Section 11B, interest is payable in terms of Section 11BB. On the other hand, learned Special Counsel for the Department submits that interest under Section 35FF is payable only when the deposit is made, underfirst proviso to Section 35F, for the period 10.5.2008 to 06.08.2014; as the deposits are not made under first proviso to Section 35F, but as payment of duty on the clearance of clinker for captive consumption, which is not the pre-deposit, interest is not payable. 61. Provisions relating to payment of interest on delayed payment of refund of pre-deposit were introduced vide Section 85 of the Finance Act, 2008 w.e.f. 10.05.2008.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 35F.The Section as it stood before 06.08.2014 did not provide for payment of any interest on the deposits made under the main Section 35F. However, it is provided w.e.f. 06.08.2014 that interest shall be sanctioned on the delayed refund of the deposit made under Section 35F. In view of this, we are of the considered opinion that the legislative intent is very clear that w.e.f 10.05.2008, interest was proposed to be given on the delayed refund of the amounts deposited under the first proviso to Section 35F, whereas w.e.f. 06.08.2014, it is provided that interest shall be granted on the delayed refund of amounts deposited under Section 35F, irrespective of the fact as to whether such deposit was under main clause or under First Proviso. When the provision of the statute or law is very clear, there is no scope for any interpretation. However, we find that the amendment carried out in 2014, clearly establishes the legislative intent that amounts deposited as per the main Section 35F, are also to be considered as deposit under Section 35F. This fortifies the argument of the appellants that total duty/ amount deposited under Protest, during the pendency of the proceedings in the Ho....