TaxTMI 
TaxTMI 
2024 (4) TMI 1139
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....1993 and so discharged only additional excise duty (as per Goods of Special Importance Act, 1957) at the rate specified in the Notification No. 48/90 CE dated 20.03.1990 as amended. The classification list was approved by the Assistant Commissioner, Coonoor on 03.03.1994 and the appellant accordingly paid duty till December 1994. Subsequently, on 09.12.1994 the appellant filed classification list claiming classification of Denim fabrics under tariff heading 5206 and claiming benefit of exemption Notification No. 253/82 dated 08.11.1992 which allows total exemption from Basic Excise Duty and additional Excise duty under the erstwhile Central Excise and Salt Act, 1944 read with Goods of Special Importance Act, 1957. It was stated that they were discharging additional excise duty under Notification No. 33/94 under the misconception that their product was 'shrink proof'. It was explained that their product could not be considered 'shrink proof' for the reason that residual shrinkage in the fabric is always more than 1.5%. To support this, they referred to the definition of 'shrink proofed fabric' as per Board's letter F. No. 115/110/64 CX-I dated 27.04.1964 and contented that the Denim....
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....tter to the Commissioner (Appeals). However, we find that the Assistant Commissioner in the Order-in-Original has not properly comes to grasp with the allegations made by the revenue and has not analysed the effect of the evidences placed by the assessee. ... .... ...... 18. We also find that in view of our order noted above, that the additional evidence sought to be introduced at this stage by the appellants is in fact relevant to the issue and should be considered to arrive at the truth. Therefore, in view of this as well as the above infirmities in the Assistant Commissioner's order, interest of justice would clearly require that the matter is remanded back to the Assistant Commissioner concerned for a de novo consideration of these issues as well as any other evidence which both sides may lead before him. 19. While remanding the matter to the original authority, we are acutely aware of the delays that this course of action may likely cause and have, therefore, adverse effect on either side's interest. We, therefore, order that the Assistant Commissioner concerned shall forthwith commence these proceedings on de novo basis and after hearing bot....
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....uested to adjudicate the Show Cause Notice dated 18.06.1998. The appellant was yet to reply to this SCN. In para 13 of the de novo order dt. 13.07.1999, the original authority observed that since the question of manufacture is the root issue which has to be decided first, and this question being now open and the Tribunal having found that the failure to decide this question being fatal, this issue which goes to root of the matter is taken up first. Thus, in the de nova Order in Original dated 13.07.1999, the Original Authority had taken up the matter of finalization of provisional assessment remanded by the Tribunal as well as the demand raised by the department in Show Cause Notices dated 18.06.1998, 29.07.1998 (Rs. 8,19,95,136/-) and 07.09.1998 (Rs. 95,80,312/-) and 27.11.1998, 13.01.1998, 16.03.1999, 31.05.1999 (Rs. 4,65,47,453/-). In de novo proceedings, Original Authority held that the process does not amount to 'manufacture' and that appellant is not liable to pay duty and also dropped all the proceedings initiated in the Show Cause Notices dated 29.07.1998 (Rs. 8,19,95,136/-), 07.09.1998 (Rs. 95,80,312/-) and 27.11.1998, 13.01.1999, 16.03.1999, 31.05.1999 (demands of an amou....
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....Against such sanction of refund, the department filed appeal before the Commissioner (Appeals) and vide Order-in-Appeal No. 40/2014 dated 29.01.2014 the Commissioner (Appeals) set aside the sanction of refund. Aggrieved by such order the appellant has filed E/40892/2014. 12. The other four appeals arise out of the refund claim filed by the appellant on 04.11.1999. The appellant filed this refund claims for refund of the duty that was paid by the appellant from 01.04.1996 to 12.05.1999. It is to be noted that this does not relate to the period 16.12.1994 to 29.02.1996 which was the period taken up for finalization of the assessment. The appellant was not paying duty from 16.12.1994 to 29.02.1996 under provisional assessment. They started paying duty only w.e.f. 01.04.1996 after the earlier Order-in-Original dt. 18.03.1996 finalising the assessment. 13. After the earlier finalization of assessment vide order dated 18.03.1996 the appellant informed the department vide letter dated 22.03.1996 and subsequently on various dates that they do not accept the order dated 18.03.1996 and intend to prefer an appeal. They stated that they would continue to clear the goods under provisional....
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.... 04.11.1999 23.07.1999 Unit claiming refund DTA Unit EOU Unit DTA Unit Order in Appeal No. (Impugned Orders) Order in Appeal No. 38 & 39/2014 dated 29.01.2014 Order in Appeal No. 50& 51/2014 dated 05.02.2014 Order in Appeal No. 40/2014 dated 29.01.2014 15. It is submitted that the Appellant is engaged in the business of processing of cotton fabrics, commonly known as Denim fabrics since 1994. The denim fabrics processed by the Appellant fall under Tariff Heading 5206 during the period prior to 16.03.1995 and under 5207 after such date. of the Central Excise Tariff, 1985. The present appeals pertain to the rejection of refund of excise duties. These excise duties were paid provisionally on clearance of denim fabrics from the DTA unit, EOU Unit, refund of deemed credit availed in terms of Notification No. 29/96-Central Excise (NonTariff) dated 03.09.1996 and refund of excise duty paid as advance deposit under protest during investigation. The factual matrix regarding both the issues is explained as follows. 15.1 The process undertaken on the denim fabrics viz., calendaring, dampening and singeing is exempted from payment of excise duty vide Notifica....
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....8.2014 High Court dismissed department's C.M.A No. 1193 of 2007 before the Madras High Court 02.11.2015 Department filed Civil Appeal No. 014538 of 2015 before the Supreme Court and the same is pending 15.5 In light of the above events that transpired from the Order dated 18.03.1996 till the de novo order dated 13.07.1999, duty was paid by appellant under provisional assessments and the assessments were finalized only vide the de novo order dated 13.07.1999. 15.6 Accordingly, during this period (i.e. from order dated 18.03.1996 to de novo order dated 13.07.1999), the Appellant cleared goods on payment of duty amounting to Rs. 16,06,23,409/- using PLA and amount of Rs. 4,06,82,939/ using RG23A credit from the DTA Unit. The Appellant cleared goods from their EOU Unit on payment of duty amounting to Rs. 26,66,026/-. 15.7 The refund claims of the Appellant were rejected by adjudicating authority on grounds of limitation and unjust enrichment. Aggrieved by the same, Appellant filed an appeal before the Commissioner (Appeals). The department also filed an appeal against the OIO rejecting the refund of amount claimed by the EOU unit of Rs. 26,66,026/- on the ground that ....
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..... A.2. In light of the order passed by CEGAT, Madras, status quo ante has been restored and the position that prevailed prior to the passing of Order dated 18.3.1996 gets restituted. A.3. The provisional assessment was restituted in view of CEGAT's Final Order dated 04.02.1999 and hence the Department cannot take a stand that the assessment stood finalized vide the de novo order dated 13.07.1999. A.4. In this regard, it is submitted that when an order is set aside by an appellate forum, the law of restitution will apply, and the matter will go back to the original position as it was before the order set aside was passed. To support this submission reliance is placed upon decision of the Hon'ble Supreme Court in South Eastern Coalfields Ltd v. State of M.P. and others 2003 SCC Online SC 1127. A.5. Therefore, by applying the principle of restitution, duty paid during the disputed period which is claimed as refund has been paid under provisional assessment. The order permitting clearance under provisional assessment dated 16.12.1994 will continue till the date of the de novo order dated 13.07.1999, which finalized the provisional assessment with NIL....
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....e limit prescribed under Section 11B of CEA. C.3. Therefore, the refund applications of the Appellant which arose out of finalization of provisional assessment under Rule 9B (5) of CER cannot be rejected on the ground that the refund applications are time-barred. C.4. Without prejudice to the above, even assuming that the time limit prescribed under Section 11B of CEA is applicable, the refund claims in the instant appeal are not time barred. The Appellant submits that the 'relevant date' for filing the refund claims arising out of the order finalizing provisional assessment is the date of the order finalizing provisional assessment which in the instant case is the de novo order dated 13.07.1999. C.5. The Appellant has submitted the refund claims with respect to refund of duty paid under provisional assessment on 04.11.1999, within 6 months from the de novo order dated 13.07.1999, which finalized the provisional assessment. Further, with respect to the refund of the amount paid under investigation, the appellant has filed the refund claim on 23.07.1999 which is also well within 6 months from the de novo order dated 13.07.1999. C.6 Therefore, the ....
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....16 OZ FH 1192 2.2.96 Rs. 109 16 OZ FH 70 22-4-96 Rs. 99.09 + Rs. 9.91 E.2. The Appellant submits that this factual position has been confirmed by the authorities vide Annexure to the show cause notice V/Ch52/18/71/2000 dated 04.04.2000 and the Impugned Order draws an incorrect inference that the duty has been passed on by the Appellant to its customers. E.3. The submission of the Appellant before the lower authority to prove that the duty has not been passed on by the Appellant to its customers has not been considered in proper light by the Impugned Order. Hence, the Impugned Order is to be set aside on this ground. F. The amount deposited during investigation is in the nature of deposit and hence Section 11B does not apply to refund of such amount. Hence, the refund claim is not barred by limitation nor subject to the test of unjust enrichment. F.1. The Appellant submits that the de novo order has dropped the proceedings of the case of misdeclaration and consequentially the Appellant is eligible for refund of the amount of Rs. 2,05,00,400/- which was deposited during the investigation. F.2. The Order in Original dated 17.....
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....ause an appeal is filed against the order passed finalising the provisional assessment, it cannot be said that the assessment is not finalized. The Tribunal vide Final Order dated 04.02.1999 had remanded the matter for de novo adjudication. In such de nova adjudication the original authority held that the process undertaken does not amount to 'manufacture' and that appellant is not liable to pay duty. The department filed appeal against such order before the Tribunal and vide Final Order dated 26.07.2005, the Tribunal upheld the de novo order passed by the adjudicating authority. However, the matter is still pending before the Hon'ble Apex Court as the department has filed Civil Appeal No. 014538 of 2015 against the order of the Hon'ble High Court of Madras. It is argued by the Ld. AR that the finalization has happened on 18.03.1996 and it cannot relate back when the Tribunal has remanded the matter for de nova adjudication. For this reason, the refund claim filed by the appellant on 04.11.1999 is barred by limitation. As per Section 11B the time limit to file the refund claim was six months during the relevant period. The refund claim having been filed only on 04.11.1999 after the....
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....noted that the period involved for finalisation of assessment is from 16.12.1994 to 29.12.1996. The refund claim is for subsequent period which is from 01.04.1996 to 12.05.1999. Thus, the period of dispute for finalisation of assessment is not the period of dispute in the refund claims. The appellant was issued SCN for finalisation of assessment. So also, separate SCNs were issued proposing to reject the refund claims. The argument of the appellant is that since the issue of finalisation was remanded and thereafter de novo order was passed only 13.07.1999, the period from 16.12.1994 till 13.07.1999 has to be treated as under provisional assessment. The department contends that the finalisation has happened on the date of earlier order (18.03.1996) itself and therefore the refund claim pertaining to subsequent period is hit by limitation having filed beyond six months. It is also observed by the department that the relevant date is the date of payment of duty and therefore hit by limitation. The appellant contends that if the date of finalisation is taken as 13.07.1999, the refund claim dt. 04.11.1999 is well within time limit of six months. 24. The relevant part of the final ord....
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....s submitted by appellant that though the original authority had finalized the assessment as per order in original dated 18.03.1996, the appellant had issued letters to the department stating that they intend to file appeal against such order of finalization, and also that they would be discharging the duty on their final products under provisional assessment. The letter dated 22.03.1996 is reproduced as under: 27. In the above letter it has been expressly stated by the appellant to treat the payment of duty to be under provisional assessment. The department has remained silent and chose not to respond to this letter. After the order passed by Commissioner (Appeals) dated 18.06.1996 upholding the finalization of provisional assessment and holding that the process undertaken by the appellant amounts to 'manufacture', the appellant preferred an appeal before the Tribunal. Appellant again intimated the department vide letter dated 25.06.1996 requesting the department to treat all the payments of duty made by them under provisional assessment. The said letter reads as under: "The Asst. Commissioner of Central Excise 25.06.1996 16-B, Kushal Kiruba Mount P....
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....inal Order dated 04/02/1999, the matter was remanded for de novo adjudication. The Tribunal while remanding the matter has set aside the earlier order of finalization of assessment. The question to be looked into is whether after such remand the date of finalization of assessment would relate back to 18.03.1996 as contended by Department or whether the finalization has happened only on 13.07.1999 as argued by the Appellant. We hold that finalization of assessment has happened only on 13.07.1999 and the payment of duty for the period of refund is only provisional. 27.2 In the application for refund dated 04/11/1999 the appellant has stated as under: C. We were allowed to clear under provisional assessment from 23.12.94. The provisional assessment was finalized by the Assistant Commissioner on 18.03.96 for the period upto 28.02.96. During provisional assessment we have executed a B-13 Bond and bank guarantee for Rs. 22.5 lakhs. The bank guarantee was enforced by the department but the security bond executed by us remain in force even now. We did not agree for the provisional assessment finalized by the Assistant Commissioner and we went on appeal up to C....
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....o the date of decision of proper officer, the assessment will 'deemed to be provisional' so as to enable the assessee to furnish his provisionally assessed return within the stipulated time frame. 1.3 It has also been provided that notwithstanding the provisions of self assessment, the final assessment in such cases will be made by the proper officer 2. In order to streamline the procedure and to have effective monitoring system, it has been decided to prescribe the following guidelines 2.1 'Provisional Assessment' should be resorted to sparingly and normally as a last option. The dispute regarding classification and valuation should be settled first of all by personal discussion with the highest levels of the assessee's management and where unavoidable, by way of adjudication proceedings. 2.2 Provisional Assessment can be ordered only under circumstances mentioned in rule 9B read with Rule 173B & Rule 173C(5). 2.3 Wherever an assessee finds that final assessment is not possible, (in situations mentioned in Rule 9B only) he will make a detailed request to the Divisional Assistant Commissioner of Central Excise, indicating ....
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....been indicated in the invoices. We fail to understand the procedure for issue of such invoices. Though it was well within the knowledge of the department, there has been no dispute raised by the department as to issuance of these invoices. The invoices placed before us clearly show that the appellant has not collected the duty from their customers. The appellant has paid duty from their PLA account. A sample of the invoices is reproduced below which shows that appellant has not collected the duty while issuing invoices : 31. Along with refund claim, the appellant has furnished to the department the details of payment of duty made by them as well as the copies of such invoices. These documents sufficiently establish that the appellant has not passed on the duty to any other person. Even if the assessment is considered to be not provisional the appellant has established that they have borne the burden of duty. 32. We have already held that the payment of duty was provisional. During the period prior to 25.06.1999, Rule 9B had not adopted provision of Section 11B of Central Excise Act, 1944 in regard to doctrine of unjust enrichment. Only w.e.f 25.06.1999 an amendment was bro....
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....me. Provided that, in the event of death, insolvency or insufficiency of the surety or where the amount of the bond is inadequate, the [Commissioner] may, in his discretion, demand a fresh bond any may, if he security furnished for a bond is not adequate, demand additional security. (4) The goods provisionally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are not so assessed. (5) When the duty leviable on the goods is assessed finally in accordance with the provisions of these rules, the duty provisionally assessed shall be adjusted against the duty finally assessed and if the duty provisionally assessed falls short of, or is in excess of the duty finally assessed, the [assessee] shall pay the deficiency or be entitled to a refund, as the case may be] (6) Notwithstanding the provisions of self-assessment in this rule, in cases of provisionally assessment, the final assessment shall be made by the proper officer]. 32.1 Proviso to Sub-rule (5) of Rule 9B as amended w.e.f. 25.6.1999 reads as under : "RULE 9B. Provisional assessment to duty - ..... .... (5....
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.... of the provisions contained under Rule 9B of the Central Excise Rules, 1944. The above rule relates to the provisional assessment to duly Sub-rule 5 reads as under:- "When the duty leviable on the goods is assessed finally in accordance with the provisions of these rules, the duty provisionally assessed shall be adjusted against the duty finally assessed and if the duty, provisionally assessed falls short of, or is in excess of the duty finally assessed, the assesses shall pay the deficiency or be entitled to a refund, as the case may be". provisional assessment without the assessee making a claim for refund. The above rule envisages an order of refund to follow finalisation of the A direction, as contained in the order dated 14-7-2000 would only help in multiplicity of the proceedings which is not warranted by the statutory provisions." The decision is to the effect that the assessing officer was required to determine and allow the excess duty, if any paid, on finalization of provisional assessment. Requiring the assessee to file refund claim entailed avoidable multiplicity of proceedings. We also find that the apex Court in para 95 of its judgment in M....
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....sanctioned. The assessee was forced to file a claim for the excess duty paid, in October 1999. This is not a claim independent of the issues involved in provisional assessment and so governed by Section 11B. We find that under various Instructions issued by the CBEC, for example, Circular No. 288/4/97-CX., dated 14-1-1997 and Circular No. 382/15/98-CX., dated 19-31998, the field officers were directed to finalize provisional assessment within three months/six months. At present the relevant rule provides that provisional assessment should be finalized within six months of ordering it and in cases where such finalization is not possible, the proper officer should obtain permission for continued provisional assessment from the jurisdictional Chief Commissioner. In view of the ratio of the decision of the Tribunal in Shriram Pistons & Rings Ltd. v. Commissioner of Central Excise, Ghaziabad (supra) and the Apex Court's judgment in Mafatlal Industries case we hold that refund of the excess duty paid by the assessee while clearing watches and parts during 199495 is not governed by Section 11B at the time when the provisional assessment was finalized. Therefore, we hold that the findi....
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....r (Appeals) No. 38 & 39/2014 and 50 & 51/2014 requires to be set aside. Ordered accordingly. 38. In appeal, E/40892/2014, the issue is with regard to rejection of refund of amount paid during investigation. An amount of Rs. 2,05,00,400/- was paid by the appellant during investigation initiated by the department alleging mis-declaration of goods. This refund was sanctioned and paid to appellant pursuant to order of Hon'ble High Court. The sanction order dt 17.8.1999 reads as under : "The claim has been preferred on the basis of the OIO No. 8/99 dt. 13.7.1999 passed by the Commissioner of Central Excise, Coimbatore. The amount claimed as refund has been paid as advance deposit and duty on the seized goods at the time of provisional release. As such the time limit stipulated under Section 11B is not applicable in the instant case. The question of unjust enrichment under Section 11B (2) will not arise as the amount of Rs. 2 Crores has been paid as advance deposit and duty amount of Rs. 5,00,400/- has been paid on the goods provisionally released. M/s.K.G. Denim Ltd. have in their letter dated 10.8.1999 informed that since their garments division made trousers out of the sai....
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.... INDIA. Phone. No : (04254) 52331-4 Fax: (04254) 22999, 52335, 573715 Telex No.: 0855-369-KG IN TNGST No. :188087 Area Code No. 2-01-14 CST No. & Date 626189/11-11-92. No. 1192 Consignee's Name & Address INDIGO FABRICS ANN-29 297 T QUADRAPLICATE FOR ASSESSEE STOCK TRANSFER Authenticated by INVOICE CUM GATE PASS Excise Registration No. 12/93 Code No. ECC/25/06/05/1972 Central Excise Range Address DATE: K. G. DENIM LIMITED JABAYAMPALAYAML 6413 (V) SIRUML GAL METTUPALAYAM FL Ex . L. No: 1233 : 02/02/96 Central Excise Division Address [DIVISION OF KG DENIM LTD], K.G.R. MILLS PREMISES, JADAYAMPALAYAM, COIMBATORE Tariff Hessing Number: Description of Goods Specification of Goods> Description of Packs STYLE NO. 14.5 Oz 14.5 Oz 16.0 Oz 16.0 Oz 16.0 Oz 16.0 Oz 16.0 Oz 16.0 Oz 5207.29 100% COTTON FABRIC EALE/ROLL No. FH 50713 GO 50713 DS 96602 FH 96602 GO 96602 NM 96602 SK 96602 TO 96602 69, KARAMADAI ROAD. METTUPALAVAM Roll No. of Metres 1816.00 3170.00 16 B, MOUNT PLEASENT ROAD. COONOOR CU....