Custom, Excise & Service Tax Tribunal
M/S. Star Coolers And Condensers Pvt. ... vs Commissioner Of Central Excise, Nashik on 24 September, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. E/983/08 (Arising out of Order-in-Appeal No. IPL/140/NSK/2008 dated 5.8.2008 passed by the Commissioner (Appeals) Central Excise & Customs, Nashik For approval and signature: Honble Shri A.K. Srivastava, Member (Technical) ============================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : Yes
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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M/s. Star Coolers and Condensers Pvt. Ltd.
:
Appellant
VS
Commissioner of Central Excise, Nashik
Respondent
Appearance
Shri M.S. Jagesha, Advocate for Appellant
Shri S.M.Vaidya, JDR Authorized Representative
CORAM:
Shri A.K. Srivastava, Member (Technical)
Date of hearing : 24/09/2009
Date of decision /10/2009
ORDER NO.
Per : Shri A.K. Srivastava, Member (Technical)
The appellant, M/s. Star Coolers & Condensers Pvt. Ltd., is a manufacturer of excisable goods falling under CH. 84 of the C.E. Tariff Act, 1985. During the period from June, 2002 to Nov., 2003. the appellant issued debit notes worth Rs. 1,91,506/- to some customers. During their visit on 23.12.2003, the preventive officers noticed the debit notes. They alleged that the debit notes were for collection of excess value of goods sold and demanded Central Excise Duty on the value of Rs. 1,91,506/-. The appellant explained that the amount of Rs.1,91,506/- represented transport charges, paid by the appellant on behalf of the customers, as requested by the upcountry customers to arrange transportation at customers cost. However, the officers paid no heed and the appellant had to credit Rs. 24,308/- on the same day that is 23.12.2003. This payment was made during investigation itself and before issuance of S.C.N. dated 16.02.2005.
The Assistant Commissioner issued S.C.N. dated 16.02.2005 asking for payment of Rs.26,414.64/- as Central Excise duty on the value of Rs.1,95,106/- and proposing penalty under Section 11AC of the Central Excise Act 1944. Under his O.I.O. No. 74/07 Dated 18.04.2007, the Assistant Commissioner confirmed the demand and imposed penalty of Rs. 26,414.64. In appeal, the Commissioner (Appeals), under O.I.A. No. NSK/89/07 dated 24.06.2007, set aside the O.I.O. dated 18.04.2007 and remanded the matter for de-novo adjudication. In his fresh adjudication order No. 123/2007 dated 22.11.2007, the Assistant Commissioner ordered as-
I withdraw the show cause notice served upon the aassessee vide F.No. VGN (30) 306/starcool/SCN dated 16.02.2005 and drop all preceedings in the instant case.
The scope of the present appeal is limited to deciding the admissibility or otherwise of the refund of Rs.24,308/-, which is paid by appellant, even before the issuance of the S.C.N. dated 16.02.2005, which has been dropped by the Assistant Commissioner under his O.I.O. No.123/07 dated 22.11.2007.
2. Heard both the sides and perused the records.
3. It is seen that the adjudicating authority and also the appellate authority have rejected refund of Rs.24,308/- on the ground that the amount is not paid under protest; and hence the claim for refund is barred by time limitation under Sec.11B of the Central Excise Act 1944.
3.1 It is an undisputed fact that the appellant has paid the amount of Rs.24,308/- on 23.12.2003, during investigation at the time of visit to their factory by the preventive officers on their directions. The concerned S.C.N. was issued on 16.02.2005. The appellant challenged the S.C.N. and finally the Assistant Commissioner dropped the SCN and the proceedings, under his O.I.O. No. 123/07 dated 22.11.2007. The Ld. Counsel of the appellant relied on para 83 of the Honble Supreme Court Judgement in the case of Mafatlal Industries reported in 1997 (89) E.L.T. 247 (SC) and claimed that in the circumstances stated above, the amount is to be treated as paid under protest and limitation of Section 11B is not applicable. Para 83 of the Honble Supreme Court Judgement in the case of Mafatlal Industries, Supra has observed as under:
It is difficult to imagine that a manufacturer would pay the amount without protest even when he contests the levy of duty, its rate, classification or any other aspect.
4. The Ld. JDR, on the other hand, relied upon the Honble Madras High Court Judgement in the case of DCW Ltd. Vs. Assistant Commissioner of Customs, Madras reported in 2003 (157) ELT 510 (Mad.) in which it was observed that the when the duty was paid without protest as per the classification directed by the Department, but same was overturned on appeal by the importer, it cannot be said that the duty was paid under protest and the refund claim filed beyond six months from payment of duty was time barred.
5. I have examined the portion I find that in their reply to the SCN, the appellant contended that the transportation charges are not includible in the assessable value under Section 4 of the Central Excise Act, 1944 either prior to 1.07.2000 or thereafter. This shows that although the protest was not specifically recorded at the time of payment of duty at the time of the visit of the preventive officers to their factory on 23.12. 2003 yet the fact remains that the duty was paid on the directions of the preventive officers. Such payment cannot be considered due to the own volition by the appellant. The very fact that the appellant contested the demand indicates that the payment made by them was involuntary and was forced upon them by the preventive officers.
5.1 The Honble Supreme Court, in the case of M/s. Mafatlal Industries reported in 1997 (89) ELT 247 (SC) has observed as under:
The second proviso to Section 11B (as amended in 1991) expressly provides that the limitation of 6 months shall not apply where any duty has been paid under protest. Now, where a person proposes to contest his liability by way of appeal, revision or in the higher courts, he would naturally pay the duty whenever he does, under protest. It is difficult to imagine a manufacturer would pay the duty without protest even when he contests the levy of duty, its rate, classification or any other aspect.
The Honble Supreme Court in para 146 of the very same Judgement has held as under:
Alternatively, it may be stated that duty paid in cases, which finally ended in orders or decrees or judgments of courts must be deemed to have paid under protest, and the procedure and limitation etc. stated in Section 11B(2) read with Section 11B (3) will not apply to such cases.
5.2. Following the ratio laid down by the Honble Supreme Court in the above case, I hold that the payment of duty made by the appellant in the instant case is the payment made under protest. Hence, the time-bar will not apply. The appellant is entitled to the refund.
6. The impugned order passed by the Commissioner (Appeals) is set aside. The appeal filed by the appellant is allowed.
(Pronounced in court on /10/2009)
A.K. Srivastava
Member (Technical)
Sm
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