TaxTMI 
TaxTMI 
2024 (6) TMI 1417
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....ng 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 on international prices prevailing at that time.....
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....he 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, Ld. Counsel relied upon the decision of the Jurisdictional High Court in the case of 3E ....
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....t. 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 the agreement stipulates that all taxes and duties not covered in Schedule B to the agreement shall be borne only by the appellan....
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.... 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 appellants have not produced their financial records such as balance sheet, trial balance etc. to prove that they have not passed on the incidence of duty to their custome....
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....egarding 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 Revenue, only such duties, which are (a) levied and collected as duties of excise/customs and (b) are both levied and collected by the Department of Revenue should be taken into account ....
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....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 Commissioner of Central Excise (Service Tax) Tirunelveli Division, for the refund of this tax paid by him, which was in excess of his liability. 4, While dealing with the representation of the Assessee. Assistant Commissioner, ....
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....ims 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 appellant within a period of three months. There shall be no order as to costs. 12. Further, the claim of the respondent in refusing to return the amount would go against the mandate of Article 265 of the Constitution of India, which provides that no tax shall be levied or col....
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....a. 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 provisions of Section 11B of the Act would not apply to the claim of refund made by the petitioner. Consequently, the limitation prescribed under the said provision would also not be applicable. 14. It has been further contended on behalf of the revenue, that in case the limitation prescribed under Section 11B of the CE Ac....
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.... 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 petitioner's claim is hit by unjust enrichment cannot be legally sustained. ... ... 17.5 Applying the above decision to the facts of the present case, the petitioner has clearly shown that it has paid the amount for which relief is sought and has not passed the burden on the consumer and that if such relief is not granted, it would suffer loss. The sa....
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....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 for working out crude oil prices." 27. It can be seen from the above that the said clause does not mention the payment of Education Cess and Secondary Higher Education Cess on OID Cess. 28. The appellant has furnished a certificate issued by M/s.CPCL (buyer) which states that they have not paid the amount of Education Cess and Secondary Higher Education Cess on OID Cess to ONGC (appellant) while purchasing the crude oil from ONGC. Relevant part of the certificate dated 30.04.....
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.... 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 21.03.2012 puts forward their grievance of the increase in OID cess which reads as under : "1. Oil Industry Development Cess is levied on Crude Oil produced as a duty of excise under The Oil Industries (Development) Act, 1974. In the Budget 2012 he rate of OID Cess leviable on Crude Oil has been increased from Rs. 2,500/MT to Rs. 4,500/MT i.e. a significant increase of 80%. The above increase is made effective from the midnight of 16th / 17th March, 2012. 2. Since OID Cess incurred by ONGC is not recoverable from refi....
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....cision 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 order dated 16-6-2016 came to be passed, the same may not have been produced before the Commissioner (Appeals). Consequently, the authorities below did not have the benefit of the said decision. It would, therefore, be in the interest of justice if the matter is restored to the file of the appellate authority to consider the appeal afresh in the light of the observations made in the above referred decision. 10. For the foregoing reasons, the petition succeeds and is accordingly allowed to the following extent : 11. The impugned Order-in-Appeal dated 29-6-2....
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....sp; 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 consideration as below:- i) whether the appellant is eligible for the refund of Educational Cess and Secondary Higher Educational Cess paid on Oil Industry Development Cess for the period from July 2004 to December 2013. ii) whether the refund claim is hit by the bar of unjust enrichment. iii) whether the refund is hit by limitation under Section 11B of the Central Excise Act 1944. After examining the facts and evidences related to the three issues above, she was of the considered view that; i) the appellant is eligible for refund on Educational Cess and Secondary Higher Educational Cess ....
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....tries 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 appellant as stated above and there is no dispute on this matter. Since these have been dealt with elaborately by the learned Member (Judicial) in her order the same is not being reiterated. There is no dispute that the amounts claimed as refund were not paid as duty 'under protest'. The appellants after coming to realize their mistake have on their own filed a refund claim under section 11B of the CE Act before the department and have not approached a civil court for relief. Hence this is not a case where monies have been wrongly exacted by the department but it's a case where monies have been voluntarily paid to the Government exchequer without....
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....d 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 provisions of this section shall also apply to a claim for refund of any amount collected as duty of excise made on the ground that the goods in respect of which such amount was collected were not excisable or were entitled to exemption from duty and no court shall have any jurisdiction in respect of such claim." It started with a non-obstante clause; it took in every kind of refund and every claim for refund and it expressly barred the jurisdiction of courts in respect of such claim. Sub-section (3) of Section 11B, as it now stands, is to the same effect - indeed, more comprehensive and all-encompassing. It says, "(3) Notwithstanding anything to the contrary contained in any ....
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....lary 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 contrary to law, viz., Sections 11A and 11B and its allied provisions. Both provisions contain a uniform rule of limitation, viz., six months, with an exception in each case. Sections 11 and 11B are complimentary to each other. To such a situation, Proposition No. 3 enunciated in Kamala Mills becomes applicable, viz., where a statute creates a special right or a liability and also provides the procedure for the determination of the right or liability by the Tribunals constituted in that behalf and provides further that all questions about the said right and liability shall be determined by the Tribunals so constituted, the resort to civil court is not available - except to the limited....
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....t. 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 of the enactment. 69. There is, however, one exception to the above proposition, i.e., where a provision of the Act whereunder the duty has been levied is found to be unconstitutional for violation of any of the constitutional limitations. This is a situation not contemplated by the Act. ... .. ; ******* "PART - IV 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 ambiguity in these propositions, reference must be had to the discussion and propositions in the body of the judgment. (i) Where a refund of tax....
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.... 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 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. . . . ." (emphasis added) 40.2 Hence as per the majority decision of five Hon'ble Judges, the language of the statute could not have been more specific and emphatic. The exclusivity of the provision relating to refund is not only express and unambiguous but is in addition to the general bar arising from the fact that the Act creates new rights and liabilities and also provides forums and procedures for ascertaining and adjudicating those rights and liabilities and all other incidental and ancillary matters. This is a bar upon a bar any and every claim for refund of excise duty can be mad....
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.... 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 answered in favor of the Central Excise Act, 1944. Central Excise officers empowered under the Central Excise Act have/had the authority to admit, examine and decide the impugned claim arising from a 'mistake of law', exercising powers under section 11B of the Central Excise Act, 1944. They cannot take resort to an independent remedy from another statute when such a course is expressly barred by the provisions in the Act. Moreover, in this case the appellant paid monies as tax on his own without 'protest'. It is only after the second clarification issued by the Board that the appellant felt that they had paid duty under a mistake of law and sought a refund, which was dismissed at the two lower levels of the departmental dispute resolution mechanism. Its on....
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.... 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 purpose of mitigating such hardship. If the language of an Act is sufficiently clear, the Court has to give effect to it, however, inequitable or unjust the result may be. The words, 'dura lex sed lex' which mean 'the law is hard but it is the law.' may be used to sum up the situation. Therefore, even if a statutory provision causes hardship to some people, it is not for the Court to amend the law. A legal enactment must be interpreted in its plain and literal sense, as that is the first principle of interpretation. 20. In Mysore State Electricity Board v. Bangalore Woolen, Cotton & Silk Mills Ltd. & Ors., AIR 1963 SC 1128 a Constitution Bench of this Court held that, 'inconvenience is not' a decisive factor to be considered while interpreting a statute. 21. In Martin....
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....n'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. Income-tax Officer, Karaikudi (1964 54 ITR 151) held : "There is, therefore, weighty authority for the proposition that a tribunal, which is a creature of a statute, cannot question the vires of the provisions under which it functions." A seven Judge Bench of the Hon'ble Supreme Court in L. Chandra Kumar Versus Union Of India [1997 (92) E.L.T. 318 (S.C.)] held as under; "91. Before moving on to other aspects, we may summarise our conclusions on the jurisdictional powers of these Tribunals. The Tribunals are competent to hear matters where the vires of statutory provisions are questioned. However, in discharging this duty, they cannot act as substitutes for the High Courts and the Supreme Court which have, under our constitutional set-up, been specifically entrusted with such an obligation. Their function in this respe....
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..... 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 under section 11A of the CE Act for taxes short collected/ not collected/ paid etc. due to a 'mistake of law' are also not subject to the limitation of the CE Act, then it would lead to complexities in tax administration and difficulties, both for the department and for the assessee. It is perhaps for this reason that the majority judgment in the Mafatlal Industries case (supra) was quite categoric in declaring and clarifying that all refund claims other than those monies that have been found to have been collected unconstitutionally, must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. 41.3 In the light of the above and the provisions of section 11B(3) of the CE Act, I do not find any specific provision in the said statute which explicitly permits me to judicially decid....
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.... 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 repayment after it has been in whole or in part expended, which would often be the case in most payments of such sort. Therefore, it is impracticable for the authorities to refund applications that are filed beyond time even it is paid under a mistake of law. Therefore, the authorities have rightly rejected the claim of the respondent and this aspect has not been taken note of by the learned single Judge. (emphasis added) The judgement of the Hon'ble High Court of Madras in '3E Infotech Vs. CESTAT', (supra) hence proceeds sub silentio. The Hon'ble Supreme Court in State Of U.P. & Ors vs Jeet S. Bisht & Anr (2007 6 SCC 586) held as under; 18. No doubt in the aforesaid decision various direction have been given by this Court but in our opinion that was done without any discussion as to whether such directions can validly be given by the Court at all. The decision therefore passed sub si....
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....ler, 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 Court's judgment in Mafatlal industries Ltd. (supra). The Hon'ble Gujarat High Court in the said case while summarizing their decision held as under; 9. ... TO SUMMARISE:- ...... Since the provisions of Section 118 of the Act are not applicable to the claim of refund made by the petitioner, the limitation prescribed under the said provision would also not be applicable and the general provisions under the Limitation Act, 1963 would be applicable. Section 17 of the Limitation Act inter alia provides that when a suit or application is for relief from the consequences of a mistake, the period of limitation would not begin to run until the plaintiff or applicant has discovered the mistake, or could, with reasonable diligence, have discovered it Since the period of limitation begins to run only from the time when the applicant comes to know of the mistake, the application made by the petitioner was well within the presc....
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.... 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 limitations placed by the statute on him, was not a specific matter for consideration. The decisions of the Hon'ble High Courts are in personam, passed considering the facts of the case and issues of law as placed before them and discussed. They are hence distinguished. 4.1.3 As regards the Hon'ble Andhra Pradesh, High court's judgment in Asia Pacific Commodities Ltd (supra), it relates to the Tribunal considering a new ground of the dispute canvassed by the parties before them. Since this is not a matter of dispute in this case the judgment is not relevant. Judgments passed by the Hon'ble High Tribunals 42.2 I next consider the judgments of the Hon'ble Tribunals cited by the appellant; a) A.P. Enterprises Vs. Commissioner of Service Tax, Chennai reported in 2019 (6) TMI 18 - CESTAT Chennai b) Venkatraman Guhaprasad & Ors. Vs. Commissioner of GST & Central Excise, Chennai South reported in 2019 (9) TMI 1143 - CESTAT Chennai c) M/s. Avadh Rail Infr....
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.... 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 on the Supreme Courts judgment in Mafatlal Industries. They held as under; 9. The Apex court in Mafatlal Industries Ltd. (supra) observed that the Central Excise Act and the Rules made thereunder including Section 11B too constitute "law" within the meaning of Article 265 and that in the face of the said provisions - which are exclusive in their nature" no claim for refund is maintainable except and in accordance therewith. The Apex court emphasized that "the provisions of the Central Excise Act also constitute "law" within the meaning of Article 265 and any collection or retention of tax in accordance or pursuant to the said provisions is collection or retention under "the authority of law" within the meaning of the said Article". 10. Having examined various decided cases and the submissions of both the sides, we are of the considered view that a claim for refund of service tax is governed by the provision of Section 11B for period of limitation. The statutory time limit cannot be extended by any autho....
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....by the larger bench of the Hon'ble CESTAT at Chandigarh, in 'Veer Overseas Ltd', I summarise my discussions as under:- a) The landmark judgment of the Hon'ble Supreme Court in Mafatlal Industries Ltd Vs Union of India [1997 (89) E.L.T. 247 (S.C.)] has by a majority verdict declared and clarified all the issues on the right to refund and the remedy for obtaining a refund of monies paid under a 'mistake of law', among other things, which is binding. b) Accordingly Statutory Authorities including Central Excise officers have the authority to admit, examine and decide the impugned claim arising from a 'mistake of law' exercising powers under section 11B of the Central Excise Act, 1944. They cannot take resort to an independent remedy from another statute when such a course is expressly barred by the provisions in the Act. To hold otherwise, I feel, would be contrary to judgment by the Hon'ble Apex Court in 'Mafatlal Industries Ltd' above. c) A legal enactment must be interpreted in its plain and literal sense. Authorities that are a creation of the statute are bound to act within the four corners of a statute and cannot ignore its provision to relieve what it considers a ....
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....bsp; Member (Technical) Member (Judicial) PER D. M. MISRA ORDER DATED 12-01-2024 44, Heard both sides at length; perused the written submissions filed during the course of hearing and thereafter, on 25.09.2023 by the appellant and on 03.10.2023 by the Revenue. The following points of difference of opinion have been referred to the Third Member: "Whether the appeal is to be allowed on the ground that the refund is not hit by limitation under Section 11B of the Central Excise Act, 1944 as held by Member (Ju....
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....ebutting the arguments of the appellant, the Revenue has submitted that in the present case, the point of difference of opinion between the two Members of the Division Bench has been clearly indicated in the Interim Order dated 06.07.2023. It is submitted that the specific points of difference of opinion, is the applicability of time limit on refund claim for wrongly paid tax as prescribed under Section 11B of the Central Excise Act, 1944. The Member (Judicial) in para 24 of the aforementioned Interim Order has viewed that the ground of limitation is not applicable in the case being referred under mistake of law; however, the Member (Technical) has upheld the applicability of limitation on the refund claim in para 38 of the aforementioned Interim Order. 46.1 Further, distinguishing the judgement in Colortex (supra), it is submitted that in the said case, the Hon'ble High Court has held that exact difference has to be formulated by the Members of Division Bench of the Tribunal and it is not open to them to formulate a question as to whether the appeal is to be rejected or remanded for a fresh decision for determination of duty, confiscation and penalty etc. It is already unders....
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....t shall be decided according to the opinion of the majority; only in the event where the Members are equally divided, the Members are obliged to 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 Tribunal, and such referred point or points shall be decided according to the opinion of the majority of these members who have heard the case, including those who first heard it. 17. The provision is therefore comprised of two parts. In a case where the Bench consists of two or more than two members and there is difference of opinion amongst the members who constitute the Bench, the point of difference has to be decided according to the opinion of the majority, where there is a majority. While the latter part of the provision stipulates that where the Bench consists of two members or more than that but of even number, and the members are equally divided, it is incumbent upon such members to set out the point or points on which they differ. Upon such point or points of difference being stated a reference is r....
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....ituting the Bench. In such a case there would be no point or points of difference on which a reference could be made, though there might be a different line of reasoning adopted by each of the members constituting the Bench. The decision in case of A.N. Seth (supra) on which reliance has been placed on behalf of respondent No. 2 is an illustration of such an eventuality. As can be seen from the facts recorded at page 856 of the reports though both the members took different views ultimately both the members agreed that the intention of the assessee (in that case) at the time of sale of plots was to sell the land with a view to earn the profits and that the gains were liable to be taxed as revenue income. In fact the appeals were allowed by the Tribunal and there was no difference of opinion stated for reference to the President. The second question which was there before Delhi High Court was in the context of the aforesaid difference in reasoning adopted by both the members and hence while answering the second question the Delhi High Court observed thus : "In other words, the Members disagreed in the reasoning adopted by them in arriving at a conclusion on the point for determin....
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.... result in overstepping of the authority vested on him as Third Member, which is contrary to the statutory provision referred above. More or less somewhat a similar view has been expressed by the Hon'ble Bombay High Court in the case of M/s Kelkar Trading Corporation vs. CCE, Mumbai- V-2016-TIOL-260-HC-MUM-CX. which has been followed by the Mumbai Bench of this Tribunal in the case of CC (Import), Nhava Sheva vs. Sun Tex - 2020 (372) ELT 892 (Tri. Mum.). 50. In the result, the matter is sent back to the Ld. Members of the referral bench for stating/reframing the exact point(s) of difference for opinion of the Third Member. 51. Reference disposed of accordingly. (Sd/-) (D. M. MISRA) MEMBER (JUDICIAL) This Bench while deciding the Appeal No. E/41682/2015 formed a difference of opinion. The difference of opinion was referred by the Hon'ble President to the third Member (brother Shri D.M. Misra) who vide order dated 22.11.2023 referred the matter back to this Bench for reframing the exact point(s) of difference of opinion. Pursuant to this, the Members who have heard the case initially reframed the points of difference and placed the same before Hon'ble President vide letter....
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....nbsp; Member (Technical) Member (Judicial) PER: DR. D.M. MISRA: ORDER DATED 31-05-2024 52. Heard both sides and perused the records. 53. The Points of Difference referred for opinion are: (i) Whether a claim for refund of Central Excise Duty paid under a 'mistake of law' by the appellant will have to be filed under section 11B of the Central Excise Act, 1944 and are subject to the provisions including the time limit stated there under as per the law declare....
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....d Hon'ble Gujarat High Court in the case of Joshi Technologies International Inc-India Projects Vs. UOI [2016(6) TMI 773 (Guj HC)] opined that the refund claim of EC and SHEC paid on OIDC for the period from July 2004 to December 2013 under mistake of law by the appellant cannot be rejected on limitation prescribed under Section 11B of CEA, 1944, 57. On the other hand, learned Member(Technical) heavily relied on the judgment of the Hon'ble Supreme Court in the case of Mafatial Industries Ltd. Vs. UOI [1997(89) ELT 247 (SC)] and Larger Bench decision of this Tribunal in the case of Veer Overseas Ltd. Vs. CCE, Panchkula [2018(15) GSTL 59 (Tri. LB)] and opined that the refund claim filed by the appellant after coming to know about the mistake of law would lie under Section 11B of the Central Excise Act, 1944; hence the time limit prescribed thereunder is applicable and the authorities below rightly rejected the refund claim holding that the same is barred by limitation prescribed under Section 118 of the Central Excise Act, 1944, 58. The learned advocate for the appellant advancing argument in support of the opinion expressed by the learned Member(Judicial) has submitted that the qu....
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....dering the decision of Larger Bench in Veer Overseas case, it has been ruled that when a jurisdictional High Court expresses view on the issue, the same has to be followed. They have submitted that the appeal carried out against the judgment of the Tribunal in Credible Engineering case has been dismissed by the Hon'ble Telangana High Court reported as CCE Vs. Credible Engineering Construction Projects Ltd. [2024(4) TMI 1041 - TELANGANA HIGH COURT]. Finally, referring to the judgment of the Madras High Court in 3E Infotech case and Gujarat High Court's decision in Joshi Technologies International, which followed the decision of the Delhi High Court in the case of Hind Agro industries Limited Vs. CC p2008(221) ELT 336 (Del.); Bombay High Court in the case of Parijat Construction Vs. CCE, Nashik [2018(359) ELT 113 (Bom.)] submitted that the limitation prescribed under Section 11B of the CEA, 1944 cannot be made applicable to the present case as the EC and SHEC has been paid by the appellant under mistake of law and collected by the Revenue without any authority of law and cannot be retained and limitation prescribed under Section 11B of CEA, 1944 not applicable to the present case. 5....
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....structions case is not a good law and held that when the Act provides a complete mechanism for correcting any errors whether on fact or on law, the burden is to work out the remedy within four corners of law. If the remedy is to be worked out within the four corners of law, the party has accepted invoking the jurisdiction of the authority to refund within the period prescribed under the Act. Subsequently, the appeal filed against the order of the Tribunal was dismissed. The Hon'ble High Court further held that the time limit prescribed under Section 11B of the Central Excise Act, 1944 is not applicable even in cases of payment of service tax paid due to mistake of law. 60. In support of their argument, the Revenue referred to following judgments:- i Universal Industrial Services Vs. CST, Bangalore [2017(8) TMI 471 -CESTAT BANGALORE] ii. Indo Global Estates Vs. CCE&ST, Chandigarh [2020(3) TMI 1336 - CESTAT CHANDIGARH] iii. Radico NV Distilleries Maharashtra Ltd. Vs. CCE,C&ST, Aurangabad [2018(4) TMI 1328 - CESTAT MUMBAI] iv. Pam Builders & Developers Vs. CCE, Mangalore [2016(6) TMI 1106 - CESTAT BANGALORE] v. CCE, Hyderabad-III Vs. XL Telecom Ltd. [2006(3) TMI 641CEST....
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.... (a) removed to a refinery or factory; or (b) transferred by the person by whom such item is produced to another person, a duty of excise at such rate not exceeding the rate set forth in the corresponding entry in column 3 of the Schedule, as the Central Government may, by notification in the Official Gazette, specify: Provided that until the Central Government specifies by such notification the rate of the duty of excise in respect of crude oil (being an item specified in the Schedule) the duty of excise on crude oil under this sub-section shall be levied and collected at the rate of rupees sixty per tonne. (2) Every duty of excise leviable under sub-section (1) on any item shall be payable by the person by whom such item is produced, and in the case of crude oil, the duty of excise shall be collected on the quantity received in a refinery. (3) The duties of excise under sub-section (1) on the items specified in the Schedule shall be in addition to any cess or duty leviable on those items under any other law for the time being in force. (4) The provisions of the Central Excises and Salt Act, 1944 (1 of 1944) and the rules made thereunder, including those relating to ....
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....isable goods], at the rate of one 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 chargeable under section 93 of the Finance (No. 2) Act, 2004 and Secondary and Higher 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 or under any other law for the time being in force. (2) The Secondary and Higher 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 or any other law for the time being in force and the Education Cess chargeable under section 93 of the Finance (No. 2) Act, 2004. (3) The provisions of the Central Excise Act, 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 Secondary and Higher Education Cess on excisable goods as they apply in relation to the levy and collection of the dut....
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....igher Education Cess chargeable under Section 138(1) of the Finance Act, 2007 should be calculated taking into account the cesses which are collected by the Department of Revenue but levied under an Act which is administered by different departments such as Sugar Cess levied under Sugar Cess Act, 1982, Tea Cess levied under Tea Act, 1953 etc. 3. The matter has been examined. A cess levied under an Act which is not administered by Ministry of Finance (Department of Revenue) but only collected by Department of Revenue under the provisions of that Act cannot be treated as a duty which is both levied and collected by the Department of Revenue. 4. It is, therefore, reiterated that the Education Cess and the Secondary and Higher Education Cess are not to be calculated on cesses which are levied under Acts administered by Department/Ministries other than Ministry of Finance (Department of Revenue) but are only collected by the Department of Revenue in terms of those Acts. 5. All pending assessment may be finalized accordingly. 6. Difficulties, if any, may be brought to the notice of Board." 64. Aanalysis of the relevant provisions of the OIDC Act, 1974, it is clear that the ....
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....alt Act, 1944 read with Central Excise Tariff Act, 1985 or Customs Act, 1962 read with Customs Tariff Act or by mis-interpreting or mis-applying any of the rules, regulations or notifications issued under the said enactments, such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactment before the authorities specified thereunder and within the period of limitation prescribed therein. No suit is maintainable in that behalf. While the jurisdiction of the High Courts under Article 226 - and of this Court under Article 32 - cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their Jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11B, This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it. The said enactments including Section 11B of Central Excises and Salt Act and Section 27 of the Customs A....
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....section (1) of Section 17 of the Limitation Act, 1963. A refund claim in such a situation cannot be governed by the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be, since the enactments do not contemplate any of their provisions being struck down and a refund claim arising on that account. In other words, a claim of this nature is not contemplated by the said enactments and is outside their purview. (iii) A claim for refund, whether made under the provisions of the Act as contemplated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii ) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in th....
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....ntral Excise Act before and after the amendment, their Lordships, broadly laid down three major circumstances for refund of the duty paid under the said enactments. These are enumerated at para 16 to 22 of the said judgment, which read as:- "16. Article 265 of the Constitution is declaratory in nature. It says that "no tax shall be levied or collected except by authority of law". This no doubt means that taxes collected contrary to law have to be refunded. But where a taxing enactment contains provisions providing for and governing the refund of taxes collected without the authority of law, the validity of such Dbrovisions, if and when questioned, has to be examined with reference to other provisions of the Constitution. Article 265 does not itself lay down any criteria for testing the validity of a statute. When it speaks of "law", it no doubt refers to a valid law but the validity of a law has to be determined with reference to other provisions in the Constitution. 17. We must, however, pause here and explain the various situations in which claims for refund may arise. They may arise in more than one situation. One is where a provision of the Act under which tax is levied is....
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....ection 11B, as the case may be. 22. There is as yet a third and an equally important category. It is this : a manufacturer (let us call him "X") pays duty either without protest or after registering his protest. It may also be a case where he disputes the levy and fights it out up to first Appellate or second Appellate/Revisional level and gives up the fight, being unsuccessful therein, It may also be a case where he approaches the High Court too, remains unsuccessful and gives up the fight. He pays the duty demanded or it is recovered from him, as the case may be. In other words, so far as 'X' in concerned, the levy of duty becomes final and his claim that the duty is not leviable is finally rejected. But it so happens that sometime later - may be one year, five years, ten years, twenty years or even fifty years - the Supreme Court holds, in the case of some other manufacturer that the levy of that kind is not exigible in law. (We must reiterate - we are not speaking of a case where a provision of the Act whereunder the duty is struck down as unconstitutional. We are speaking of a case involving interpretation of the provisions of the Act, Rules and Notification.) The question ....
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....rmed as 'unconstitutional levy', and the second is called as 'illegal levy" and the third one is, refund is due on the ground of discovery of mistake of law and on the declaration of law by the Apex Court or a High Court (or a Tribunal) or any other authority under the Act in the case of another person. 72. In the present case, the refund arose neither due to declaration of levy of EC & SHEC on Oil cess as unconstitutional nor because of declaration by a court or Tribunal in another case that it is not leviable, but squarely covered under the category of illegal levy i.e. the cess has been collected by the authorities under the Central Excise Act by misinterpretation of the applicability of Education Cess and Secondary & Higher Education Cess to said Oil cess collected as excise duty as per Section 15 of the Oil Industry(Development) Act, 1974, which is administered by Ministry of Petroleum. Therefore, the principles l:id down in sub-para (i) of para 99 of the said judgment, in my opinion, is squarely applicable to the present case. 73. A simple reading of the said observation it is clear that a claim of refund when it is in the nature of 'illegal levy', necessarily to be pursued....
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....is a civil court. 74. Therefore, the EC and SHEC paid by the appellant which by way of misinterpretation of its applicability to Oil cess being administered by Ministry of Petroleum and not by Ministry of Finance(Department of Revenue) be considered as a payment of duty collected initially with authorities of law by a mis-interpretation of relevant provisions of Oil Industry (Development)Act, 1974 read with provisions of Central Excises Act, but later discovered to be not a levy authorised by law. Therefore, I have no hesitation to say that the principle laid down by the Hon'ble Supreme Court at clause (I) of the para 99 is squarely applicable to the facts of the present case. 75. The second question relates to applicability of the judgment of the Hon'ble Gujarat High Court in the case of Joshi Technologies International INC-India Projects Vs. UOI [2016(339) ELT 21 (Guj.)] which has been later followed by the jurisdictional High Court of Madras in the case of 3E Infotech Vs. CESTAT, CCE(Appeals-I) [2018(18) GSTL 410 (Mad.)]. No doubt in Joshi Technologies International, INC-India Projects' case, the issue relates to refund of the EC and SHEC paid on the OIDC for the same period o....
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....efund of money without applying the provisions of limitation under Section 11B by holding that the amount collected has no sanctity of law as the same is not a duty or a tax and accordingly the same should be returned to the party. We note such remedies provided by the High Courts and Apex Court are mainly by exercising powers under the Constitution, in writ jurisdiction. It is clear that neither the jurisdictional service tax authority nor the Tribunal has such constitutional powers for allowing refund beyond the statutory time-limit prescribed by the law. Admittedly, the amount is paid as a tax, the refund has been claimed from the jurisdictional tax authorities and necessarily such tax authorities are bound by the law governing the collection as well as refund of any tax. There is no legal mandate to direct the tax authority to act beyond the statutory powers binding on them. The Hon'ble Supreme Court in Mafatlal Industries Ltd. (supra) categorically held that no claim for refund of any duty shall be entertained except in accordance with the provisions of the statute. Every claim for refund of excise duty can be made only under and in accordance with Section 11B in the forms....
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....es and the submissions of both the sides, we are of the considered view that a claim for refund of service tax is governed by the provision of Section 11B for period of limitation. The statutory time limit cannot be extended by any authority, held by the Apex Court. 77. In view of above, (i) the refund claim of EC and SHEC paid on OID cess, being an 'illegal levy' is governed by the principle laid down in para 99(i) of the judgment of the Hon'ble Apex Court in Mafatlal Industries Ltd.'s case and the Larger Bench judgment in Veer Overseas Ltd.'s case; accordingly the claim have to be filed under Section 11B of the Central Excise Act, 1944 and governed by the said provisions prescribed thereunder. (i) On the second question, the judgment delivered by Hon'ble High Courts in Joshi Technologies" case in exercise of Jurisdiction under Article 226 followed in 3E Infotec's case cannot be applied by the departmental authorities and Tribunal in case of refund of 'illegal levy" in view of the principle of law laid down by the Larger Bench of Tribunal in Veer Overseas Ltd.'s case. 78. The above opinion may be placed before the referral Bench for appropriate action/Orders. (Pronounc....