Customs, Excise and Gold Tribunal - Tamil Nadu
Cce vs Madras Elastomers Ltd. on 24 October, 2002
Equivalent citations: 2003(85)ECC534, 2004(161)ELT445(TRI-CHENNAI)
JUDGMENT Jeet Ram Kait, Member (T)
1. This appeal filed by the revenue is directed against Order in Appeal No. 375/97 (M) dt. 11.12.97 by which the Commissioner (Appeals), Chennai, has held that the appellants are entitled to the relief claimed, and set aside the order of the Ld. Assistant Commissioner of Central Excise.
2. The Revenue has filed the appeal on the ground that the order in Appeal No. 375/97 (M) dt. 11.12.97, passed by the Commissioner (Appeals), Chennai, is not legally proper due to the following reasons which are extracted below:
1. The Order for refund of Rs. 31,35,208.82 Paise was originally passed by the erstwhile Assistant Collector of Central Excise (Now Assistant Commissioner), Madras VIII Division vide Assistant Commissioner's Order C.No. V/Ch. 40/1875/87 RF. Dated 11.8.89. Only part of the above refund and that too by way of credit to the tune of Rs. 12,34,326 in the R.G. 23-A Part-II was refunded to the Assessee and the balance amount of Rs. 19,00,881.86 sanctioned towards refund payment by cheque has not been actually paid to the assessee. Hence, it is to be understood that till such period the refund sanctioned is actually paid, part of the claim was pending. It is not known as to how the above refund claim should be treated 'Not pending' as on 20.9.91 when the Section 11-B as amended by the1991 Amendment Act came into existence. Inasmuch as refund amount of Rs. 19,00,881.86 paise was not actually paid to the assessees, one cannot come to the conclusion that the refund claim of the assessee was not pending on the date when the amendment to Section 11 -B was issued.
2. Since the refund amount was not paid before 19.9.91 i.e., Date of Commencement of Section 11-B Amendment Act, 1991, the question of review of the above refund did not arise at all before 19.9.91 and hence the refund proceedings have not been finally terminated merely because the appeal period had expired before the Commencement of 1991 (Section 11-B) Act. Therefore as mentioned in Para 99 of the decision of Hon'ble Supreme Court in the case of Mafatlal Industries v. U.O.I., 2002 (83) ECC 85 (SC), with reference to distinction in respect of cases pending and those terminated, the refund claim in the instant case should be treated as pending and as laid down by the Hon'ble Supreme Court in the above referred case namely Mafatlal Industries v. U.O.I., 2002 (83) ECC 85 (SC), the amended Section 11-B is applicable to this instant case also.
3. Hon'ble Madras High Court has held in the case of Advani Oerlikon Limited v. Assistant Collector of Central Excise 1996 (82) ELT 198 (Madras) that till the actual disbursement of refund is made, the refund is to be treated as pending.
4. Hon'ble Supreme Court in the case of Union of India v. Jain Spinners Limited 1993 (41) ECC 24 (SC): 1992 (61) ELT 321. has held that Section 11-B of the Act after its amendment is retrospective and applies not only to all pending applications for refund of duty but also to all earlier orders and directions given by Court or by Appellate authority or Officer of the Department.
5. Further, it is also felt that the very purpose of enactment of Section 11 -B Amendment Act, 1991 by the Government will be defeated if refund amount of Rs. 19,00,881.86 is paid to M/s. Madras Elastomers Limited, Maraimalai Nagar as per the above Order-in-Appeal No. 375/97 (M) dated 11.12.97 of the Commissioner (Appeals), Chennai, because M/s. Madras Elastomers Ltd. have not established that the incidence of Excise Duty had not been passed on by them to any other person. Hence, they are not eligible to get Rs. 19.00.881.86 in cash as refund.
3. Ld. DR, Shri A. Jayachandran while reiterating the grounds of appeal has invited our attention to the judgment of the Hon'ble High Court Jurisdiction at Madras, in the case of M/s. Advani Oerlikon Limited v. Assistant Collector of Central Excise as reported in 1996 (82) ELT 198 (Madras), wherein it was held that till the actual disbursement of refund is made, the refund is to be treated as pending. He also invited our attention to the Hon'ble Supreme Court judgment rendered in the case of UOI v. Jain Spinners Limited 1993 (41) ECC 24 (SC): 1992 (61) ELT 321, in which it was held that Section 11-B of the Act after its amendment is retrospective and applies not only to all pending applications for refund of duty but also to all earlier orders and directions given by Court or by Appellate authority or Officer of the Department.
4. Ld. Advocate Shri N. Venkataraman, appearing for the respondents submitted that the order of refund for a sum of Rs. 33,83,796.67 was passed by the Assistant Collector of Central Excise, Madras VIII Division and Order was communicated to them vide his Order C.No. V/Ch.40/1875/87 RF dated 11.8.89, that these refund claims were sanctioned in full settlement of their claims amounting to Rs. 33,83,786.67 out of which an amount of Rs. 12,34,826.98 was taken in RG 23 A part II and cheque for the balance amount of Rs. 19,00,881.86 was required to be issued by the Department. Ld. Counsel further submitted that the law laid down by the Hon'ble Supreme Court in the case of UOI v. Jain Spinners Ltd. 1993 (41) ECC 24 (SC): 1992 (61) ELT 321 (SC), is clearly distinguishable, as the facts in that case were different because there was no refund claim pending before the Assistant Collector. Ld. Advocate also submitted that the judgment rendered by the Hon'ble High Court of Judicature at Madras in the case of Advani Oerlikon Ltd. v. Assistant Collector of Central Excise 1996 (82) ELT 198 (Madras) is no longer a good law in view of the judgment rendered by the Hon'ble Supreme Court in the matter of UOI v. Mafatlal Industries Ltd., 2002 (83) ECC 85 (SC): 1997(89) ELT 247 (SC) in which in para 146, it has been held that Section 11-B (2) and (3) as amended in 1991 cannot apply to:
1. 'Refund' made or due as per orders passed by Courts, in a suit or in a petition under Article 226 of the Constitution of India, which have become final.
2. Refunds ordered by the statutory authority concerned which have become final.
This judgment of the Hon'ble High Court has been referred by the Tribunal in the case of Dalmia Cement (Bharat) Ltd. v. Commissioner of C.Ex., Trichy 1998 (101) ELT 669 (Tribunal). We extract para 146 which specifically covered the question before us, of the Apex Court judgment in the case of Mafatlal Industries Ltd. (supra):
"146. As stated, Section 11B(2) and Section 11B(3) go together. The applications for refund made before the commencement of the Amendment Act, 1991, shall be deemed to have been made under Section 11B(1) of the Act as amended and it shall be dealt with in accordance with Section 11B(2) of the Act. The Section contemplates disposal of the applications pending on the date of the Amendment Act as also fresh applications filed after the Amendment Act, 1991, as per the amended provisions. Counsel for the assessees urged that the provisions relating to refund and in particular, Section 11B(2) and (3) as amended in 1991 cannot apply to:
1 'Refund' made or due as per orders passed by Courts, in a suit or in a petition under Article 226 of the Constitution of India, which have become final. 2 Refunds ordered by the statutory authority concerned which have become final.
It is obvious that in such cases no application can or will be deemed to be pending on the date of the commencement of the Amendment Act. No application praying for refund is to be filed in such cases, either. No further probe, regarding the requisites for obtaining refund specified in the Amendment Act, 1991, is called for in such cases. The above aspects are fairly clear. Section 11 B(2) and (3) cannot be made applicable to refunds already ordered by the Court or the refund ordered by the statutory authorities, which have become final. It follows from a plain reading of Section 11-B, Clauses (1), (2) and (3) of the Act. The provisions contemplate the pendency of the application on the date of the coming into force of the Amendment Act or the filing of an application which is contemplated under law, to obtain a refund, after the Amendment Act comes into force. I am of the opinion, that if the said provisions are held applicable, even to matters concluded by the judgments or final orders of courts, it amounts to stating that the decision of the Court shall not be binding and will result in reversing or nullifying the decision made in exercise of the judicial power. The Legislature does not possess such power. The Court's decision must always bind parties unless the condition on which it is passed are so fundamentally altered that the decision could not have been given in the altered circumstances. It is not so herein. [Shri Prithvi Cotton Mills Ltd. and Anr. v. Broach Borough Municipality and Ors., 1970 (1) SCR 388 and Madan Mohan Pathak v. Union of India and Ors. etc., 1978 (3) SCR 334. See also Comorin Match Industries (P) Ltd. v. State of Tamil Nadu, 1996 (65) ELT 233 (SC) = JT 1996 (5) SC 167. Alternatively, it may be stated that duty paid in cases, which finally ended in orders or decrees or judgments of courts, much be deemed to have been paid under protest and the procedure and limitation etc. stated in Section 11 B(2) read with Section 11 B(3) will not apply to such cases. It need hardly be stated that Section 11 B(1), the proviso thereto, Section 11 B(2) and Section 11 B(3) read together will apply only to (1) refund applications made before the Amendment of the Act and still pending on the date of commencement of Amendment Act, 1991 and (2) applications contemplated under law to obtain refund and filed after the commencement of the Amendment Act, 1991."
The Ld. Advocate also invited our attention to the matter of Dalmia Cement (Bharat) Ltd. v. CCE, Trichy, 2002 (137) ELT 493 (Tri. Chenn.) in which also it has been held that doctrine of unjust enrichment is not applicable to matters which have reached finality before amendment of Section 11B of Central Excise Act, 1944 and the department was bound to make refund in such cases. While referring to the judgment, the Tribunal has relied on the judgment rendered in the case of Mafatlal Industries Ltd. v. UOI, 2002 (83) ECC 85 (SC): 1997 (89) ELT 247 (SC). Ha further submitted that the order granting refund was passed on 11.10.89 whereas the act incorporating the amendment was passed on 20.9.91. He therefore, submitted that the refunds were not pending. Even the review period under Section 35 E was also over and the order granting refund therefore attained finality and it cannot be reopened by the Central Excise authorities. In the judgments rendered by the Hon'ble High Court of judicature at Madras in the case of M/s. Advani Oerlikon Ltd. v. Assistant Collector of Central Excise was passed on 27.3.95 whereas the Apex Court rendered judgment on 19.12.96 in the case of Mafatlal Industries Ltd. (Supra) and therefore the judgment rendered by the Hon'ble High Court is not applicable in this case and is no longer a good law.
5. We have heard the submissions made by both the sides and in view of the judgments rendered by the Hon'ble Apex Court in the case of Mafatlal Industries (supra) and the judgment rendered by the Tribunal in the case of Dalmia Cement (Bharat) Ltd. v. CC, Trichy (supra), we do not find any infirmity in the order passed by the Ld. Commissioner (Appeals) and we confirm his order by rejecting the appeal filed by the revenue. It is ordered accordingly.