TaxTMI 
TaxTMI 
2024 (6) TMI 1417
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.....10.2014 was issued to the appellant proposing to deny the refund claim alleging that the same is hit by limitation as well as the doctrine of unjust enrichment. After due process of law, the original authority held that the refund is barred by limitation as well as is hit by the doctrine of unjust enrichment. Against this order, the appellant filed appeal before Commissioner (Appeals) who upheld the same. Hence this appeal. 2. Ld. Counsel Shri Raghavan Ramabadran appeared and argued for the appellant. 2.1. It is submitted by the Ld. Counsel that appellant is engaged in exploration and production of petroleum crude oil falling under Chapter Heading 2709 of the First Schedule to the Central Excise Tariff Act, 1985. The crude oil produced by the appellant is chargeable to NIL rate of excise duty. Appellant cleared crude oil exclusively to M/s. Chennai Petroleum Corporation Ltd. (CPCL). For this purpose, they entered into a Crude Oil Sale Agreement with M/s. CPCL. In terms of clause 9.1 of the agreement, the price payable by M/s. CPCL to the appellant is to be computed as per Schedule B of the Agreement. It is stipulated in Schedule B that the base price shall be computed based ....
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....fund of Rs.19,13,96,099/- being the EC and SHEC paid by them on OID Cess during the impugned period from July 2004 to December 2013. 2.8 The authorities below have rejected the refund claim on two grounds. It is stated that the appellant has filed refund claim beyond one year from the date of relevant date in terms of Section 11B of the Central Excise Act, 1944 and therefore refund claim is barred by limitation. Secondly, that the value of crude oil sold by the appellant to CPCL includes all taxes. Appellant has failed to prove with documentary evidence that EC and SHEC was not loaded into the price of the crude oi! and that it was not passed on to the buyer. 2.9 Ld. Counsel submitted that even though appellant submitted documents in the nature of certificate from CPCL and other records, the department has not considered these documents. 3. On the issue of limitation, it is submitted by the counsel that limitation prescribed under Section 11B (1) is not applicable for refund of amount paid under mistake of law. The amount paid by the appellant can be considered as a deposit and therefore limitation prescribed under Section 11B is not applicable. To support this argument, L....
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....able and therefore the contention of the appellant that they had come to know about the mistake only after the circular dt. 07.01.2014 is not acceptable. It is explained by the Counsel that the letter issued by CBEC in F.No. No.345/2/2004-TRU dated 10.08.2004 clarified inter alia that EC and SHEC are not payable on duties of excise not collected by Department of Revenue. The said circular of 2004 did not deal with applicability of EC and SHEC on duties of excise collected by Department of Revenue but levied by any other Department of the Central Government. This aspect was first clarified by the Board vide circular dated 07.01.2014 only. The same has been considered by the Hon'ble High Court of Gujarat in the case of Joshi Technologies International (supra). 7. To counter the allegation that the refund claim is hit by doctrine of unjust enrichment, Ld. Counsel asserted that the EC and SHEC paid as well as OID Cess has been borne by the appellant. The appellant had submitted the following documents to the department to prove that the EC & SHEC paid by them on OID Cess was borne by them and not passed on to its buyer i.e. CPCL : (a) Schedule B read with Clause 10.1 of....
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....ed for the Department and supported the findings in the impugned order. Ld. A.R adverted to Section 11B of the Central Excise Act, 1944 and submitted that as per the said section the refund claim has to be filed within one year from the relevant date. The relevant date being the date of payment of duty. The appellants have filed the refund claim for the period July 2004 to December 2013. The contention of the appellant is that they had realized the mistake of paying OID Cess only after the clarification issued by the circular dated 07.01.2014. This cannot be accepted for the reason that the Board vide earlier circular dt. 10.08.2004 had issued necessary clarification. The circular dated 07.01.2014 only reiterated the earlier circular. Hence the refund claim is hit by the bar of limitation. 13. Ld. A.R adverted to Section 12B of the Central Excise Act, 1944 to argue that as per the said section every person who has issued an invoice and paid the duty of excise on any goods shall be deemed to have passed on the full incidence of such duty to the buyer of such goods. The burden is on the manufacturer to prove that the duty incidence has not been passed on to the buyer. The appellan....
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....ss is not required to be paid. The Ld. Counsel for appellant has countered this allegation by submitting that the letter date 10.08.2004 issued by CBEC did not clarify regarding payment of EC and SHEC on OID Cess which is not levied by Department of Revenue. The letter only clarified that EC and SHEC are not payable on duties of excise not collected by Department of Revenue. The said letter of 2004 did not deal with applicability of EC and SHEC on duties of excise collected by the Department of Revenue but levied by any other Departments of Central Government. It is submitted 17. For better appreciation of this rival contention, the clarification issued by CBEC letter dated 10.08.2004 is reproduced as under : "... Issue No. (4): Whether duties / cesses which either not collected as duty of excise/customs or are collected so but by a Department other than Department of Revenue, should be included for the purposes of calculation of Education Cess? Clarification : As the Education Cess is calculated on the aggregate duties of excise/customs (excluding certain duties of customs like anti-dumping duty, safeguard duty etc.) levied and collected by the Department of R....
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....ying the confusion as to whether EC & SHEC is to be paid on OID Cess. The amount paid by the appellant in the nature of EC and SHEC on OID Cess can then only be considered as payment made under mistake of law. The Hon'ble jurisdictional High Court in the case of 3EGBP Infoech (supra), while considering an appeal filed by the assessee, against the order passed by the Tribunal, which upheld the rejection of refund on the ground of time bar in terms of Section 11B, held that when the tax/duty is paid under mistake of law the claim of refund cannot be barred by limitation merely because the period of limitation under Section 11B had expired. The refusal to return the amount would go against the mandate of Article 265 of Constitution of India which provides that no tax shall be levied or collected except by authority of law. The relevant discussions of the Hon'ble High Court are as under : "3. After making the payment, the appellant realised that under Rule 6A of the Service Tax Rules, inserted w.e.f. 1-7-2012, the appellant did not have a liability to pay Service Tax. After realising this error, the appellant on 30-6-2016 made a representation to the Assistant Commissi....
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....rvice tax paid under a mistake of law. The decision of the Supreme Court in the case of Collector of C.E., Chandigarh v. Doaba Co-Operative Sugar Mills (supra) relied upon by the Appellate Tribunal has in applying Section 11B, limitation made an exception in case of refund claims where the payment of duty was under a mistake of law. We are of the view that the impugned order is erroneous in that it applies the limitation prescribed under Section 11B of the Act to the present case were admittedly appellant had paid a Service Tax on Commercial or Industrial Construction Service even though such service is not leviable to service tax. We are of the view that the decisions relied upon by the Appellate Tribunal do not support the case of the respondent in rejecting the refund claim on the ground that it was barred by limitation. We are, therefore, of the view that the impugned order is unsustainable. We accordingly allow the present appeals and quash and set aside the impugned order, insofar as it is against the appellant in both appeals. We fully allow refund of Rs. 8,99,9621/- preferred by the appellant. We direct that the respondent shall refund the amount of Rs. 8,99,962/- to the ap....
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....e in the said case was regarding refund of Education Cess and Secondary and Higher Education Cess paid on OID Cess. The Hon'ble High Court held that when the amount is paid by mistake, Revenue is duty bound to refund the amount and cannot retain it as such retention is hit by Article 265 of Constitution of India. After appreciating the circular dated 07.01.2014 and the issue of limitation as well as unjust enrichment, the Hon'ble High Court held that the petitioner therein is eligible for refund. The relevant paras read as under "13. The next question that needs to be addressed is the aspect of limitation. The refund application has been made in July, 2014 seeking refund of the amount paid for the period July, 2004 to April, 2014. On behalf of the revenue it has been contended that in view of the provisions of Section 11B of the CE Act, the limitation for filing the refund claim would be before the expiry of one year from the relevant date. The expression "relevant date" is defined under clause (B) of the Explanation to Section 11B of CE Act and insofar as the present case is concerned would be the date of payment of duty. However, as discussed hereinabove, the pro....
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....e, it is the specific case of the petitioner as averred in Paragraphs 5.12 and 5.13 of the memorandum of petition that during the course of personal hearing the petitioner was given to understand that the documents submitted by the petitioner for unjust enrichment are sufficient. It is the case of the petitioner that IOCL is its sole customer, and that the petitioner had furnished a Chartered Accountant's certificate based on the petitioner's invoices certifying that the petitioner has not charged any Education Cess and Secondary and Higher Secondary Education Cess to its customer. In the opinion of this court, if the adjudicating authority was not satisfied with the certificate and the material produced by the petitioner, he could have called upon the petitioner to produce further documentary evidence in support of its claim that it had not passed on the incidence of duty to the purchaser. However, without affording a reasonable opportunity to the petitioner to produce documentary evidence in support of its claim that there was no unjust enrichment, the adjudicating authority was not justified in holding that there was unjust enrichment. Therefore, the finding that the pet....
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.... & Duties : Buyer shall pay Taxes and Duties as per the formula below : (i) For Mumbai offshore crude : * Sharing of Sales Tax / VAT and Custom duty: A notional [email protected]% (2.5% in case supplies from Platform) of FOB price would be on Buyer's account. The above is based on average of the existing Custom Duty of 5% as on 01.04.2010 and CST of 2% ('Nil' in case of supplies from Platform). The above rate of 3.5% (2.5% In case of supplies from Platform shall be subject to change in case of change in rates of Customs Duty and Sales Tax by Govt. on the principle of equal sharing between Seller and Buyer. The actual applicable Sales Tax will be borne by Seller. * Notional Calamity Contingent Duty: Buyer will bear 50% of NCCD in respect of Mumbai Offshore crude oil. (Presently applicable NCCD is @ Rs.50/MT (ii) For KG, EOA and Cauvery crudes: * The Actual applicable Sales Tax/ VAT shall be payable by Buyer at the prevailing rate/s. A template illustrating crude oil price working / built up as per provisions of this COSA is attached as Appendix-B. Both parties agree to use the template at Appendix B....
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....rpose without obtaining written permission from us." 30. The said certificate is accompanied by the calculation of the OID cess paid, Education Cess and Secondary and Higher Education Cess paid by the appellant with challan details. 31. To further substantiate that the incidence of Cess / duty element has not been passed on to the buyer, the Ld. Counsel has furnished the invoices. It is submitted that OID Cess was increased with effect from 17.03.2012. The appellant had filed a letter to the Government expressing its concern over the increase in the rates of OID Cess and consequent increase in absorbing the burden of OID cess by the appellant. The invoices prior to 17.03.2012 and after 17.03.2012 have been furnished along with appeal to show that the price of crude oil remained the same even after hike in OID Cess. The invoice dated 17.03.2012 shows the Crude Oil price per 10BBL as Rs.61,491.79. The invoice dated 31.03.2012 which is after the hike in OID cess also shows the price of crude oil per 10 BBL as Rs.61,491.79. This establishes that OID Cess has been borne by the appellant. The letter issued to the Ministry of Petroleum & Natural Gas, New Delhi by the appellant dated....
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.... & SHEC paid on OID Cess by the appellant's sister concern. We therefore are convinced that the appellant has established that they have not passed on the burden of EC & SHEC on OID Cess to the buyer. 34. In the appellant's own case on the very same issue of refund, the Hon'ble High Court of Gujarat as reported in 2017 (354) ELT 577 (Guj.) referred to the decision in the case of Joshi Technologies International (supra) and held that appellant is eligible for refund and ordered the Commissioner (Appeals) to process the refund in accordance with decision in the case of Joshi Technologies International (supra). Relevant part of the order reads as under : "9. From the facts as emerging from the record, it is evident that the above decision would be squarely applicable to the facts of the present case. It is, however, an admitted position that the above referred decision of this Court which was rendered on 16-6-2016 is subsequent to the passing of the Order-in-Original dated 28-4- 2015, and therefore, was not available at the time when the Order-in- Original came to be passed. It appears that the order-in-appeal having been made on 29-6-2016, soon after the judgment and orde....
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.... (M. AJIT KUMAR) (SULEKHA BEEVI C.S.) Member (Technical) Member (Judicial) PER CONTRA M. AJIT KUMAR ORDER DATED 06-07-2023 38. 1 have perused the order prepared by my learned Sister Ms. Sulekha Beevi C.S., Member (Judicial). Three issues have been taken up by her for ....
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.... Central Excise Act, 1944 (Act) relying upon the judgment of Hon'ble High Court at Bombay in the case of M/s Andrew Telecomm India Pvt Ltd Vs CCE Goa [2014 (34) STR 562 (Bombay)]. The said judgment also related to a case where the amount paid by the appellant as Service Tax was found not imposable or leviable on export of services as clarified by the Department. The Hon'ble High Court held that this was a case squarely falling within the provisions of the CE Act and therefore the rule of limitation under section 11B would apply. The learned Assistant Commissioner also relied on the judgment of the Hon'ble Supreme Court in Mafatlal industries Ltd Vs Union of India [1997 (89) E.L.T. 247 (S.C.)] to hold that the refund was also hit by merits and the doctrine of unjust enrichment. Aggrieved by the said order the appellant approached the Commissioner (Appeals), who after examining a number of judgment including the Supreme Court's judgment in 'Mafatlal industries Ltd." (supra) rejected the appeal under section 11B of the CE Act on merit, time bar and unjust enrichment. The appellant is hence before us. 40. The issue on merits and unjust enrichment is held in favor of the ....
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....rovisions 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". Section 11B, as in force prior to April, 1991 contained sub-section (4) in identical words. It said: "(4) Save as otherwise provided by or under this Act, no claim for refund of any duty of excise shall be entertained". Sub-section (5) was more specific and emphatic. It said: "Notwithstanding anything contained in any other law, the....
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....d 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 central excise code". The idea was "to consolidate in a single enactment all the laws relating to central duties of excise". The Act is a self-contained enactment. It contains provisions for collecting the taxes which are due according to law but have not been collected and also for refunding the taxes which have been collected ....
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....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 the provisions of the Act cannot bar and curtail these remedies. Itis, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions ....
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....ust be held to be collected, retained or not refunded, as the case may be, under the authority of law. Both the enactments are self-contained enactments providing for levy, assessment, recovery and refund of duties, imposed thereunder. Section 11B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim of refund and cannot form a basis for maintaining a suit or a writ petition. All refund claims except those mentioned under Proposition (i) below have to be and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal - which is not a departmental organ - but to this Court, which is a civil court. i) Where, however, a refund is claimed on the ground that the provision of the Act under which it was levied is or has been held to ....
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....ould like to record my own reasons for the aforesaid conclusion. | shall separately deal with the maintainability of the action either by way of suit or petition under Article 226 of the Constitution - the extent to which there is ouster of jurisdiction of Courts." The reasons given by the Hon'ble Justice in his order relate to the jurisdiction of civil courts not being barred in entirety regarding an attack against the levy and/or claim for refund. Hon'ble Justice Hansaria, concurred with Hon'ble Justice Paripooranan. The subject matter of the Hon'ble Justice's order at para 112 of the Mafatlal Industries Ltd judgment (supra) is also not an issue in this case as stated above. Further the jurisdiction of the Central Excise officers has not been ousted for examining and disposing of claims for a refund of monies paid under a 'mistake of law', by any one of the three decisions rendered separately by the majority. 40.4 Based on the discussion above the answer to the question raised at para 3(a) above, as to whether the impugned refund claim filed, based on payments made towards duty under a mistake of law, will lie under section 11B of the CE Act or under some other statute, is ....
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....t of Madras in A.Ram Mohan vs State, CRL.R.C.N0.265 of 2015, dated 30 March, 2015 held as under; 125. Where a statute imposes a public duty and proceeds to lay down the manner and time frame within which the duty shall be performed, the injustice or inconvenience resulting from a rigid adherence to the statutory prescriptions may not be a relevant factor in holding such prescription to be only directory. . . . I also find that as per the Hon'ble Supreme Court in its landmark judgment in Rohitash Kumar & Ors. v Om Prakash Sharma & Ors [(2013) 11 SCC 451], covering the interpretation of statutes, held that a legal enactment must be interpreted in its plain and literal sense. Inconvenience or hardship is not a ground for the court to interpret the plain language of the statute differently, to give relief. The relevant portion of the judgment is extracted below. 19. In Bengal Immunity Co. Ltd. v. State of Bihar & Ors., AIR 1955 SC 661 it was observed by a Constitution Bench of this Court that, if there is any hardship, it is for the legislature to amend the law, and that the Court cannot be called upon, to discard the cardinal rule of interpretation for the pur....
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....other statute to examine and dispose the claim. 41.1 A question arises as to whether Tribunals created under the CE Act being higher appellate forums that are independent of the Central Excise Department can examine the claim outside the ambit of the CE Act. To my mind Tribunals being creations of the statute have to work within its four corners. To echo the sentiments of the Hon'ble Supreme Courts in Rohitash Kumar & Ors. cited above 'A Court has no power to ignore that provision to relieve what it considers a distress resulting from its operation. A statute must of course be given effect to whether a Court likes the result or not.' A Tribunal acting under a statute cannot question the lack of its power to do 'full justice' in resolving the dispute or act in excess of the power given to it by the CE Act. The Hon'ble Apex Court in the case of K.S. Venkataraman & Co. v. State of Madras (1966 2 SCR 229) after discussing the judgment of the Calcutta High Court in the cases of (i) Raleigh Investment Co. Ltd. v. The Governor General in Council (1944 1 Cal. 34), (ii) United Motors (India) Ltd. v. The State of Bombay (1952 55 BLR 246) and (iii) M.S.M.M. Meyappa Chettiar v. ....
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....ld be contrary to the provisions of the statute itself. Looked at from another angle when the Proper Officer acting within the ambit of section 11B finds that the refund application is delayed he has no alternative but to reject it as barred by limitation. The Tribunal exercising its appellate jurisdiction, can using all the powers conferred expressly by the statute, examine that decision for its correctness. Having found that the decision has been taken correctly under the CE Act, it cannot substitute that decision with that of its own, without assigning a reason and disclosing the specific power granted for it to do so. 41.2 Most refunds under the CE Act arise as a result of a mistake of law or fact. Disputes relating to classification, valuation, rate of duty, date of implementation, retrospective effect of provisions/ notifications etc. when finalised could broadly be classified as disputes where duty has been paid/ exacted due to a 'mistake of law' made either by the tax payer/ assessee or the department. If this broader categorisation is done and if it is held that such claims are not to be examined under section 11B of the CE Act, and similarly its converse that demand un....
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....ndmark judgment of the Hon'ble Supreme Court in Mafatlal industries Ltd Vs Union of India (supra) dated 19/12/1996, which lays down the parameters of entertaining an application under Section 11B of the Central Excise Act, 1944, was not independently examined or discussed in the said judgments of the Hon'ble High Courts. Additionally in '3E Infotech Vs. CESTAT' the decision of a coordinate bench of the Hon'ble High court in Assistant Commissioner of Service Tax, Chennai II Division, Chennai Vs M/s. Nataraj & Venkat Associates rep. by its Partner, A. Venkat, [W.A.No. 129 of 2010 & M.P.No. 1 of 2010, decided on: 23-04-2013) was also not brought to its notice, wherein it was held; 8. From the materials available on record, it is seen that the amounts were credited to the Revenue under the Head of Account "0044 - Service Tax" through TR-6 challans which are purported for payment of Service Tax only and as such, the claim of the respondent that the payment was only deposit and not Service Tax, cannot be sustained. Further, a tax, be it, direct or indirect, is intended for immediate expenditure for the common good of the state and it would be unjust to require its repaym....
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....not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. He went on to say that the point had to be decided by the earlier court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed." 19. The principle of sub silentio has been thereafter followed by this Court in State of U.P. & Anr. Vs. Synthetics & Chemicals Ltd. & Anr. (1991) 4 SCC 139, Amit Das Vs. State of Bihar (2000) 5 SCC 488, A-One Granites Vs. State of U.P. & Ors. (2001) 3 SCC 537, Divisional Controller, KSRTC Vs. Mahadeva Shetty & Anr. (2003) 7 SCC 197 and State of Punjab & Anr. Vs. Devans Modern Breweries Ltd. & Anr. (2004) 11 SCC 26. 42.1.2 'Joshi Technologies International' contains reference to judgments that have considered the Hon'ble Supreme Cou....
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....nt/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 added) The Hon'ble High Court directed the department to refund the amounts. Hence it is seen that the cited judgments contain direction by Hon'ble High Courts to sanction refunds by nature of being Constitutional Courts and not being limited by the provisions of the CE Act. Further, the question raised at para 40(b) above of this order as to whether an authority created by the statute can sanction a refund under the CE Act without taking into consideration the limitation....
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....he ruling of a superior court or a binding precedent even if it does not serve the cause of his client, must be brought to the notice of court unhesitatingly. This obligation of a counsel flows from the confidence reposed by the court in the counsel appearing for any of the two sides. A counsel, being an officer of court, shall apprise the Judge with the correct position of law whether for or against either party." 42.2.2 1 find that the Hon'ble Tribunal in Oriental Insurance Company Ltd. (supra) did discuss the decision of a Larger Bench of the Tribunal in Veer Overseas Ltd. v. CCE, Panchkula decided on 27 March, 2018, [2018 (4) TMI 910 - CESTAT Chandigarh] which heard the following reference; "(a) Whether in respect of the claim for refund of illegal levy of Service Tax or of Service Tax collected without authority of law, the statutory time limit prescribed in terms of Section 11B of Central Excise Act 1944 will be applicable or not?". The majority of two Members discussed the Mafatlal Judgment and held that the statutory limit prescribed in section 11-B of the Excise Act would be applicable to refunds claimed for payments made under a mistake of law, relying ....
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....as Ltd. (supra) based on the Hon'ble Supreme Court's judgment in 'Mafatalal Industries Ltd' and when the powers of High Courts and Tribunals are not concomitant. The Hon'ble High Court of Karnataka in C. Narayanaswamy And Others, Etc. vs State Of Karnataka And Another [AIR 1992 Kant 28] decided on 11/03/1991 held as under; "14. We are bound by the decision of the Supreme Court. If there is a direct decision of the Supreme Court on any question, it is impermissible for the High Court to follow the opinion of any learned author, whatever his eminence be, ignoring the said decision. . ." Again in M/s New Krishna Bhavan Vs. Commercial Tax Officer (AIR 1961 MYS.3) a Division Bench of the Hon'ble High Court of Karanataka stated that if the majority of Judges of the Supreme Court in a particular case express a view on a proportion of law, then that view of the majority of the judges would be the law declared by the Supreme Court and binding on all courts. 43. Having discussed and found that the question raised by me has been answered by the larger bench of the Hon'ble CESTAT at Chandigarh, in 'Veer Overseas Ltd', I summarise my discussions as under:- a) The....
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....bsp; (Sd/-) (M. AJIT KUMAR) (SULEKHA BEEVI C.S.) Member (Technical)  ....
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....uj.). It is submitted that in the context of reference made to the Third Member, the Hon'ble High Court held that in absence of statement of points or points of differences, any reference made would be invalid and it cannot be termed to be a mere procedural irregularity, hence, not sustainable. The said judgement has been followed by the same High Court in the case of Amod Stampings Pvt Ltd vs. CC - 2013 (7) TMI 55 Guj HC. Reiterating the principle laid down in Colourtex's case, the Hon'ble High Court quashed the order of Third Member as well as the difference of opinion formulated by the Members of the Division Bench holding that the point of difference was not formulated in the manner required under law. 45.3 The Ld. Advocate argued that the Interim Order which states that the appeal has to be dismissed or allowed, is not correct and not the objective of the provision of law prescribing reference for opinion of Third Member in the case of difference between the Members of the Bench. Thus, the reference made to the Third Member in the present case is not correct and the same is to be set aside on this preliminary ground alone. 46. Rebutting the arguments of the appel....
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....on between the Members of a Bench is prescribed under Section 129C(5) of the Customs Act, 1962, which reads as below: "Section 129C. Procedure of Appellate Tribunal. - (1) ---------------- (2) ---------------- (3) ---------------- (4) ---------------- (5) If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority; but if the members are equally divided, they shall state the point or points on which they differ and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other members of the Appellate Tribunal and such point or points shall be decided according to the opinion of the majority of these members of the Appellate Tribunal who have heard the case, including those who first heard it." 48. The Hon'ble Gujarat High Court in the case of Colortex (supra) interpreting the Section 129C(5), held as under: "16. Section 129C(5) of the Act requires that where Members of Tribunal differ in opinion on any point, in the firs....
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....rence, renders his opinion, the appeal goes back to the Bench which originally heard the appeal and has to be decided in accordance with the majority opinion. This becomes absolutely clear when the concluding portion of the provision is read which talks of deciding according to the opinion of the majority of the members who have heard the case, including those who first heard it. 19. Therefore, the members who expressed dissenting opinions are bound by the statute to state the point or points of difference and make reference after making such a statement. To use the words of the learned President "an omnibus order" cannot take place of the statement on point or points of difference between the members. The entire appeal(s) cannot be referred. 20. There is one more reason as to why the legislature in its wisdom has provided for this requirement, viz., stating the point or points of difference as a pre-condition for making the reference. In a given case, and it is not unknown that, though the members may express dissenting views they might ultimately arrive at the same conclusion, or there could be a situation where by a different process of reasoning the same concl....
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....iew recorded by Member (Technical) or the appeals merited acceptance in the order recorded by Vice-President". All that can be said about this observation is that it belies comprehension. In one breath the learned Members seek opinion of Third Member as to allowability or rejection of the appeals and also that the appeals have not been referred. Possibly the learned Members have not appreciated the true import of provision of Section 129C(5) of the Act." The aforesaid principle has been followed by the same High Court in Amod Stampings Pvt Ltd's case. 49, Applying the principle laid down in the aforesaid judgments of the Hon'ble High Court to the reference in hand, it is clear that the appeal whether to be allowed or disallowed, has been referred instead of the exact point of difference leaving the ultimate results of the appeal to be arrived at subsequent to the opinion of the Third Member. The jurisdiction vested with the Third Member is to decide the point or points of difference; it cannot be extended further to reframe the issues and/or questions referred and express his opinion by interpreting and/or filtering the true underlying meaning of points/issues of....
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....International Vs UOI [2016 (339) ELT 577 (Guj.)] covers the issues raised in the appeal. (Pronounced in open court on 12-01-2024) (Sd/-) (Sd/-) (M. AJIT KUMAR) &n....
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....y 2004 to December 2013, the appellant had discharged Oil Industry Development Cess (OIDC, for short) in accordance with Section 15(1) of the Oil Industry (Development) Act, 1974. The said cess is levied by the Ministry of Petroleum and Natural Gas. But, it was collected by the Department of Revenue, Ministry of Finance. The appellant had also paid Education Cess (EC) and Secondary & Higher Education Cess (SHEC, for short) in terms of relevant provisions of Finance Act, 2004 and 2007 on the said OIDC. CBEC has issued the Circular No 0.978/2/2014-CX dated 07.01.2014 clarifying that EC and SHEC could be levied only on those Cesses which are levied and collected by the Department of Revenue. Thus, since OIDC has been only collected by Ministry of Finance (Department of Revenue), but being levied and administered by Ministry of Petroleum, the appellant had filed refund claim for Rs.19,13,96,099/- on 04.02.2014 being the EC and SHEC paid on OIDC for the period from July 2004 to December 2013. The Departmental officers rejected the refund claim, inter alia, on the ground of being barred by limitation prescribed under Section 11B of the Central Excise Act, 1944 (CEA, for short). 56. Th....
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.... decision of the Larger Bench in the case of Sony India Ltd. Vs. CC, ICD, New Delhi [2002(143) ELT 411 (Tri. LB)] and judgment of Hon'ble Supreme Court in the case of Gammon India Ltd. Vs. CC [(2011) 12 SCC 499]. Further they have submitted that the Tribunal is bound by the decision of the jurisdictional High Court of Madras in the case of 3E Infotech case wherein it is held that when service tax is paid by mistake of law, a refund claim cannot be barred by limitation prescribed under Section 11B of Central Excise Act, 1944. The findings of the learned Member(Technical) in the Interim Order that the decision of the Hon'ble Madras High Court in 3E Infotech is sub silentio is incorrect. In support, they have referred to the judgment of the Supreme Court in the case of Municipal Corporation of Delhi Vs. Gurnam Kaur [(1989) 1 SCC 101], which has been subsequently followed in the case of A-one Granites Vs. State of UP [(2001) 3 SCC 537]. Further they have submitted that in view of the judgment of the Five Member Bench of this Tribunal in Khanbhai Esoofbhai Vs. CCE, Calcutta [1999(107) ELT 557 (Tri.)] and also in CCE, Chandigarh Vs. Kashmir Conductors [1997(96) ELT 257 (Tri.)], the decis....
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....ll claims for rebate / refund have to be made only under Section 11B with only one exception, where a statute is struck down as unconstitutional. Further they placed reliance on the judgment of the Hon'ble Supreme Court in the case of CCE, Chandigarh Vs. Doaba Co-operative Sugar Mills [1988(37) ELT 478 (SC)]. Further referring to the judgment in Miles India Limited Vs. Asst. Collector of Customs [1987(30) ELT 641 (SC)1, they have submitted that in the said case it is held that the Customs authorities acting under the Act were justified in disallowing the claim for refund as they have been bound by the period of limitation provided under Section 27(1) of the Customs Act, 1962. Itis submitted that the view of the learned Member(Technical) in the Interim Order is thus not a contradiction to the provisions envisaged under Central Excise Act, 1944; but rather an obedience to the parent statute and upholding the functions expected out of the creature in the capacity of an appellate authority. Thus the claim of the appellant that the learned Member(Technical) has sidelined the decisions of the Tribunals is not correct. Further referring to the judgment of the Hon'ble Karnataka High Court ....
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....es" case and consequently held that provisions of Section 11B is applicable even in case of refund claim for payment made due to mistake of law. Therefore, the claim of the appellant is not sustainable. It is submitted that the Hon'ble Madras High Court has seemed to deviate from the observation of the Hon'ble Supreme Court in Mafatlal Industries case; hence not binding. Further they have submitted that even if the cess was paid under mistake of law, the refund claim filed under Section 11B of the CEA as declared in Mafatlal Industries case, the same is to be processed under the said provisions; accordingly the limitation prescribed under the said Act is applicable in deciding the said refund claim. 62. I have carefully considered the submissions advanced during the course of hearing and in written submissions of both by the appellant dated 29.02.2024 and Revenue's dated 24.04.2024. 63. Before proceeding to analyse the points of difference in present context and the principles of law on the subject, it is relevant to reproduce the relevant provisions under which the cesses have been levied and collected. Section 15 of Oil Industry (Development) Act, 1974 ....
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....ble goods), at the rate of two per cent, calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 (1 of 1944) or under any other law for the time being in force. (2) The Education Cess on excisable goods shall be in addition to any other duties of excise chargeable on such goods, under the Central Excise Act, 1944 (1 of 1944) or any other law for the time being in force. (3) The provisions of the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder, including those relating to refunds and exemptions from duties and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of the Education Cess on excisable goods as they apply in relation to the levy and collection of the duties of excise on such goods under the Central Excise Act, 1944 or the rules, as the case may be. 138. Secondary and Higher Education Cess on excisable goods. - (1) The Second....
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....es which either not collected as duty of excise/customs or are collected so but by a Department other than Department of Revenue » should be included for the purposes of calculation of Education Cess? Clarification: As the Education Cess is calculated on the aggregate duties of excise/customs (excluding certain duties of customs like antidumping duty, safe guard duty etc.) levied and collected by the Department of Revenue, only such duties, which are (a) levied and collected as duties of excise/customs and (b) are both levied and account for calculating Education Cess. (ii) Education Cess and Secondary & Higher Education Cess on other Cesses - Levy of - Clarification Circular No. 978/2/2014-CX, dated 7-1-2014 F.No. 262/2/2008-CX.8 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Levy of the Education Cess and the Secondary and Higher Education Cess on other cesses - Regarding. Attention is invited to Circular No. 345/2/2004-TRU (Pt.), dated 10th August, 2004 [2004 (171) E.L.T. (T3)], in which it was clarified that the Education Cess chargeable under Section....
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....eing administered by the Ministry of Petroleum and only collected by the Ministry of Finance; EC and SHEC are accordingly not payable. Thus, admittedly all these years, the EC and SHEC has been assessed and paid on the OIDC, considering the same as an excise duty under the relevant provisions of the CEA, 1944. The viries or its leviability on the said excise duty(Oil cess) has not been challenged by the Appellant nor the same has been declared as ultra vires levy by any High Court or Supreme court. 66. In the above circumstances, to answer the first question, it is necessary to examine and understand the ratio laid down by the Constitutional Bench of Hon'ble Supreme Court in Mafatlal Industries' case. Analysing the constitutional provisions and the provisions under the statute and other allied laws on the subject, the majority opinion of the Bench is summarised at para 99 of the said Judgment. The relevant principles reproduced as below: "99. The discussion in the judgment yields the following propositions. We may forewarn that these propositions are set out merely for the sake of convenient reference and are not supposed to be exhaustive. In case of any doubt or am....
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.... refund claims except those mentioned under Proposition (ii) below have to be and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal - which is not a departmental organ - but to this Court, which is a civil court. (ii) Where, however, a refund is claimed on the ground that the provision of the Act under which it was levied is or has been held to be unconstitutional, such a claim, being a claim outside the purview of the enactment, can be made either by way of a suit or by way of a writ petition. This principle is, however, subject to an exception : where a person approaches the High Court or Supreme Court challenging the constitutional validity of a provision but fails, he cannot take advantage of the declaration of unconstitutionality obtained by another person on another ground, this is for the reason that so far as he is concerned, the decision has become final and cannot be re-opened on the basis of a decision o....
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....ords, he cannot collect the duty from his purchaser at one end and also collect the same duty from the State on the ground that it has been collected from him contrary to law. The power of the Court is not meant to be exercised for unjustly enriching a person. The doctrine of unjust enrichment is, however, inapplicable to the State. State represents the people of the country. No one can speak of the people being unjustly enriched. (iv) ........................ 67. While summarising the principles and for understanding its true meaning, their Lordships cautioned that in the event the propositions are not understandable, reference should be made to the reasoning/ discussions recorded in the previous paragraphs of the said judgment. 68. To appreciate the principles governing the refund of duty under the Central Excise Act and Customs Act as laid down in the said judgment, it is relevant to trace the background leading to constitution of the Nine Member constitutional Bench to examine the issue. This can be located in the first paragraph of the said judgment. It is noted that to ascertain the correctness of certain decisions of the Apex Court, concept of unjust enr....
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....In this class of cases, the claim for refund arises under the provisions of the Act. In other words, these are situations contemplated by, and provided for by, the Act and the Rules. (emphasis supplied) 19. The above distinction is not only accepted in all jurisdictions but is also not disputed before us. 20. So far as the first category (unconstitutional levy) is concerned, there is no dispute before us that it is open to the person claiming refund to either file a suit for recovery of the tax collected from him or to file a writ petition under Article 226 of the Constitution for an appropriate direction of refund. The only controversy on this score is whether the manufacturer/payer is entitled to such refund where he has already passed on the burden of the duty to others. 21. With respect to the second category of cases, there is a good amount of controversy. While the Union of India says that such claims of refund should be put forward and determined only under and in accordance with the provisions of the Act and the Rules, the contention of the appellants-petitioners is that even in such cases a suit or writ is maintainable on the ground that....
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....as discovered the mistake of law when the High Court has declared the law. The fact is that such claims have been entertained both in writ petitions and suits until now, purporting to follow the law declared in Kanhaiyalal, and are being allowed and decreed, sometimes even with interest. The Union of India says that this can never be. It says, a manufacturer must fight his own battle and only if he succeeds therein, can he claim refund. He cannot take advantage of success of another manufacturer and that no suit or writ is maintainable by him for refund on the ground of alleged discovery of mistake of law on the declaration of law by this Court or a High Court (or a Tribunal or any other authority under the Act) in the case of another person. The Union of India denies that such a person can plead payment of duty under a mistake of law within the meaning of Section 72 of the Contract Act. It also denies that such a writ petition or a suit can be filed within three years of such "discovery of mistake of law", 70. On a simple reading of the above observation, it is clear that refund of duty levied and collected under as statute including Central Excise Act, 1944 would arise: (i) wh....
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....lative intent evidenced by the provisions of the said Acts and would exercise their Jurisdiction consistent with the provisions of the Act". Thus, all refunds relating to 'illegal levy' have to be pursued under Section 11B of the Central Excise Act with an exception to the jurisdiction of High Courts under Article 226 and Supreme Court under and Article 32 of the Constitution of India. 74. This inference is further strengthened from the observation of the Hon'ble Supreme Court in interpreting the term 'law' appearing at Article 265 of the Constitution of India. Their Lordships held that the provisions of the enactments including Section 11B of the Central Excises and Salt Act, 1944 and Section 27 of the Customs Act, 1962 do constitute "law" within the meaning of Article 265 of the Constitution of India and hence any tax collected, retained or not refunded in accordance with the said provisions must be held to be collected, retained or not refunded as the case may be, under the authority of law. In other words, all 'illegal levy' are held to be collected without authority of law and to be refunded as prescribed under Section 11B of the Central Excise Act, 1944 and Section 27 ....
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....ioner has filed the present petition challenging the order-in-original dated 24-11-2014 passed by the Respondent No. 2 and seeks a direction to the second respondent to forthwith sanction and grant the petitioner refund of Rs. 73,60,061/- along with interest at the rate of 18% per annum claimed vide application dated 21-7-2014." (emphasis supplied) 76. Thus, the said writ petition was filed against the adjudication order of the Commissioner rejecting the refund claim. As noted above, while laying down the principle of refund of illegal levy, Hon'ble Supreme Court categorically held that the necessity of pursuing statutory remedy in filing refund claim under the relevant enactment, will not be applicable when a petition has been filed under Article 226 before the Hon'ble High Court or Article 32 before the Hon'ble Supreme Court. In other words, the High Courts or the Hon'ble Supreme Court can consider refund of an illegal levy beyond the provisions of Section 11B of Central Excise Act, in exercise of its extraordinary jurisdiction conferred under Art. 226 or Art.32 of the Constitution, as the case may be. As far as the department authorities and also the Trib....
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....net International Ltd. (supra) has no application to decide the dispute in the present referred case. We take note of the decision of the Tribunal in XL Telecom Ltd. (supra). It had examined the legal implication with reference to the limitation applicable under Section 11B. We also note that the said ratio has been consistently followed by the Tribunal in various decisions. In fact, one such decision reached Hon'ble Supreme Court in Miles India Limited v. Assistant Collector of Customs - 1987 (30) E.L.T. 641 (S.C.). The Apex Court upheld the decision of the Tribunal to the effect that the jurisdictional customs authorities are right in disallowing the refund claim in terms of limitation provided under Section 27(1) of the Customs Act, 1962. We also note that in Assistant Collector of Customs v. Anam Electrical Manufacturing Co. - 1997 (90) E.L.T. 260 (S.C.) referred to in the decision of the Tribunal in XL Telecom Ltd. (supra), the Hon'ble Supreme Court held that the claim filed beyond the statutory time limit cannot be entertained. 9. The Apex Court in Mafatlal Industries Ltd. (supra) observed that the Central Excise Act and the Rules made thereunder including Section 11....