TaxTMI 
TaxTMI 
2025 (6) TMI 6
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....unting to Rs 3,33,179/- on the Welding Electrodes which was not admissible in terms of the amendments made to definition of inputs (Rule 2 (k) of CENVAT Credit Rules, 2004) by substitution as per notification No 03/2011-CE (NT). Cenvat Credit on these electrodes was also not admissible as capital goods. 2.3 A show cause notice dated 27.05.2015 was issued to the appellant proposing to deny the inadmissible CENVAT credit and to recover the same along with interest. Penalty under Rule 15 read with Section 11AC was also proposed. 2.4 The show cause notice was adjudicated vide order in original dated 05.05.2016, confirming the demand along with interest. Penalty was also imposed. 2.5 Appellant deposited 7.5% of amount confirmed (Rs 24,998/- vide debit entry no 41 in the CENVAT account) and filed appeal before the First Appellate Authority. The appeal was dismissed by order in appeal dated 28.02.2018 2.6 Appellant further deposited 2.5% of the amount confirmed (Rs 8330/- vide Challan No 00030 dated 30.06.2018 and filed the appeal before CESTAT. The appeal was allowed as per Final Order No A/70606/2019-SM [BR] dated 14.03.2019, holding as follows: 3. Tribunal's decisi....
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....llowing documents for your kind perusal please:- 1. We claim consequential refund of Rs. 3,52,728/- (Rupees Three Lacs Fifty Two Thousands Seven Hundred Twenty Eight only), as per details mentioned below:- (a) Pre Deposit @ 7.5% for filing First Appeal of Rs. 24,998/-, reversed vide Entry No. 041 dated 18.07.2016 (b) Pre-Deposit @ 2.5% for filing Second Appeal before CESTAT- Allahabad of Rs. 8,330/-, deposited vide CIN 00030 dated 30.06.2018 (c) Reversed Rs. 15,581/- only vide Entry No. 01 dated 01.04.2015, also got deposited Interest & Penalty Rs. 935/-, vide Challan No. 260 dated 30.04.2015, Ref IAR No. 54/HPR/CE/2015-16 (d) Reversed Rs. 11,330/- only, CENVAT involved in 5 (Five) Tax Invoices for the Month of March-2013 only. (e) Reversed Rs. 90,861/- only, CENVAT involved in 24 (Twenty Four) Tax Invoices from the Month of April- 2013 to March-2014 only. (f) Reversed Rs.57,208/- only, CENVAT involved in 28 (Twenty Eight) Tax Invoices from the Month of April- 2014 to March-2015 only. (g) Reversed Rs. 20,668/- only, CENVAT involved in 17 (Seventeen) Tax Invoices from the Month of April- 2015 to March-2016 only.....
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....the proceedings finalized by the tribunal order dated 14.03.2019 was June 2010 to February 2013. The amounts deposited by the appellant for hearing of the appeals in terms of Section 35 F of the Central Excise Act, 1944 has been duly refunded to the appellant along with the interest in terms of provisions of Section 35FF of Central Excise Act, 1944. There is no dispute in respect of consequential refund arising as result of the said order. • Period of dispute in the present appeal is March, 2013 to June, 2017 which is not the subject matter of the tribunal order dated 14.03.2019. Hence the appellant cannot claim the refund in respect of the duty paid on welding electrodes by referring to the above order. • Appellant have never claimed the CENVAT credit in respect of the amounts now being claimed as refund, by referring to the above order. • No proceedings have been initiated for denial of any Cenvat Credit in respect of the welding electrodes received by the appellant during this period as they had never claimed any credit and reflected the same in their ER-1 returns. It is not even the case of the appellant that claimed the credit in ER-1 ret....
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.... Cenvat credit amounting to Rs 3,19,400.00 in respect of Welding electrodes was neither availed nor reversed under protest, I Opine that the refund of the same is inadmissible to the party. 4.3 Impugned order records the findings as follows: "4. As a consequence of the Order of the Tribunal dated 14.03.2019 the appellant filed for refund of the amount pre-deposited at the time of filing the appeals as well as for refund of Rs. 3,19,410/- pertaining to Cenvat Credit on Welding Electrode for the period from March, 2013 to June, 2017 5. The Adjudicating Authority found that the refund of Rs. 33,318/- which was pre-deposited for filing the refund claim alongwith the interest of Rs. 5,993/- was admissible for refund and the claim of Rs. 3,19,410/- was not arising out of the CESTAT's Order, and therefore, found to be inadmissible to them. On this issue, I find that the order of the Hon'ble Tribunal dated 14.03.2019 at para 4 clearly stated as follows: "....." 6. On perusal of the order as above, I find that the Show Cause Notice dated set aside by the Hon'ble Tribunal which 27.05.2015 was ultimately was pertaining to the period from June....
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....al Excise duty from 1997 and the assessee/ appellant is mandated to assess his duty and credits himself and file the return accordingly. Revenue authorities do not have any role in the assessment made by the appellant of duties payable and the credits availed. They will come into picture subsequent to filing of the return and in case of any short/ nonpayment of duties or availment of inadmissible credits in the returns action will be initiated as provided by Section 11A of the Central Excise Act, 1944, Rule 14 of the Cenvat Rules, 2004 etc. The scheme of Central Excise Act, 1944 do not permit any other method of making the claim to credit or for postponement of the right to credit for any reason. 4.7 The appellant has placed on record letter dated 19.07.2013 which reads as follows: "Ref: YSL/2013-14/59 Dated: 19.07.2013 To The Superintendent Central Excise Range-II Bareilly. Sub:- Reg. Cenvat Credit on Welding electrodes. Sir, During discussion with you regarding Cenvat Credit on welding electrodes, we have been told by your office that after change in definition of 'input' under Rule 2 (k), the Cen....
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....al/revision, fails and then keeps quite. The orders in any of the situations have become final against him. Then what happens is that after an year, five years, ten years, twenty years or even much later, a decision is rendered by a High Court or the Supreme Court in the case of another person holding that duty was not payable or was payable at a lesser rate in such a case. (We must reiterate and emphasise that while dealing with this situation we are keeping out the situation where the provision under which the duty is levied is declared unconstitutional by a court; that is a separate category and the discussion in this paragraph does not include that situation. In other words, we are dealing with a case where the duty was paid on account of mis-construction, mis-application or wrong interpretation of a provision of law, rule, notification or regulation, as the case may be.) Is it open to the manufacturer to say that the decision of a High Court or the Supreme Court, as the ease may be, in the case of another person has made him aware of the mistake of law and, therefore, he is entitled to refund of the duty paid by him? Can he invoke Section 72 of the Contract Act in such a case ....
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....heir interpretation or contention accepted by a High Court or the Supreme Court, all the manufacturers/Assessees all over the country are filing refund claims within three years of such decision, irrespective of the fact that they may have paid the duty, say thirty years back, under similar provisions - and their claims are being allowed by courts. All this is said to be flowing from Article 265 which basis, as we have explained hereinbefore, is totally unsustainable for the reason that the Central Excise Act and the Rules made thereunder including Section 11B/Rule 11 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 under and in accordance therewith. The second basic concept of law which is violated by permitting the above situation is the sanctity of the provisions of the Central Excises and Salt Act itself. The Act provides for levy, assessment, recovery, refund, appeals and all incidental/ancillary matters. Rule 11 and Section 11B, in particular, provide for refund of taxes which have been collected contrary to law, i.e., on account of a mis-interp....
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....erate 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. In short, no claim for refund is permissible except under and in accordance with Rule 11 and Section 11B. An order or decree of a court does not become ineffective or unenforceable simply because at a later point of time, a different view of law is taken. If this theory is applied universally, it will lead to unimaginable chaos. It is, however, suggested that this result follows only in tax matters because of Article 265. The explanation offered is untenable as demonstrated hereinbefore. As a matter of fact, the situation today is chaotic because of the principles supposedly emerging from Kanhaiyalal and other decisions following it. Every decision of this Court and of the High Courts on a question of law in favour of the assessee is giving rise to a wave of refund claims all over the country in respect of matters which have become final and are closed long number of years ago. We are n....
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....r to make it workable to achieve the purpose of the legislation.[K P Mohammed Salim v. CIT, (2008) 11 SCC 573 [14]] A construction that fails to achieve the manifest purpose of legislation or reduces the statutory provisions to futility should be avoided. [Mohan Kumar Singhania v. Union of India, 1992 Supp (1) SCC 594 [52]; CIT v. Hindustan Bulk Carriers, (2003) 3 SCC 57 [17]] The machinery provisions must be construed to effectuate the object and purpose of a statute and not defeat them. In J K Synthetics Ltd. v. CTO, [(1994) 4 SCC 276] a Constitution Bench of this Court observed: "16. It is well-known that when a statute levies a tax it does so by inserting a charging section by which a liability is created or fixed and then proceeds to provide the machinery to make the liability effective. It, therefore, provides the machinery for the assessment of the liability already fixed by the charging section, and then provides the mode for the recovery and collection of tax, including penal provisions meant to deal with defaulters. Provision is also made for charging interest on delayed payments, etc. Ordinarily the charging section which fixes the liability is strictly construe....
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.... used in Section 27(1)(i) that "in pursuance of an order of assessment" has been deleted from the amended provision of Section 27 due to introduction of provision as to self-assessment. However, as self-assessment is nonetheless an order of assessment, no difference is made by deletion of aforesaid expression as no separate reasoned assessment order is required to be passed in the case of self-assessment as observed by this Court in Escorts Ltd. v. Union of India & Ors. (supra). 39. In Collector of Central Excise, Kanpur v. Flock (India) Pvt. Ltd. - 2000 (120) E.L.T. 285 (S.C.) = (2000) 6 SCC 650, the question which came up for consideration before this Court was non-challenge of an appealable order where the adjudicating authority had passed an order which is appealable under the statute, and the party aggrieved did not choose to file an appeal. This Court held that it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing the order. The provisions of the Central Excise Act, 1944 came up for consideration. The C....
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....uch a contention has been negatived by this Court in Flock (India) case (2000) 6 SCC 650. Once an order of assessment is passed the duty would be payable as per that order. Unless that order of assessment has been reviewed under Section 28 and/or modified in an appeal, that order stands. So long as the order of assessment stands the duty would be payable as per that order of assessment. A refund claim is not an appeal proceeding. The officer considering a refund claim cannot sit in appeal over an assessment made by a competent officer. The officer considering the refund claim cannot also review an assessment order. 7. We also see no substance in the contention that provision for a period of limitation indicates that a refund claim could be filed without filing an appeal. Even under Section 11 under the Excise Act, the claim for refund had to be filed within a period of six months. It was still held, in Flock (India)'s case (supra), that in the absence of an appeal having been filed no refund claim could be made. 8. The words "in pursuance of an order of assessment" only indicate the party/person who can make a claim for refund. In other words, they enable a person....
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....ieved by an order of assessment. It is not only the order of re-assessment which is appealable but the provisions of Section 128 make appealable any decision or order under the Act including that of self-assessment. The order of self-assessment is an order of assessment as per Section 2(2), as such, it is appealable in case any person is aggrieved by it. There is a specific provision made in Section 17 to pass a reasoned/speaking order in the situation in case on verification, self-assessment is not found to be satisfactory, an order of re-assessment has to be passed under Section 17(4). Section 128 has not provided for an appeal against a speaking order but against "any order" which is of wide amplitude. The reasoning employed by the High Court is that since there is no lis, no speaking order is passed, as such an appeal would not lie, is not sustainable in law, is contrary to what has been held by this Court in Escorts (supra). 44. The provisions under Section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made. In other words, the order of self-assessment is required t....