Custom, Excise & Service Tax Tribunal
Western Coalfields Ltd vs Commissioner Of Central Excise, ... on 5 July, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I 1) Appeal No. E/197/04 arising out of Order-in-Appeal No. BPS(351)390/2003 dated 21.10.2003 passed by Commissioner of Central Excise (Appeals), Aurangabad. Western Coalfields Ltd. .. Appellant Vs. Commissioner of Central Excise, Aurangabad .. Respondent 2) Appeal No. E/410/04 and E/CO/86/04 arising out of Order-in-Appeal No. BPS(351)390/2003 dated 21.10.2003 passed by Commissioner of Central Excise (Appeals), Aurangabad. Commissioner of Central Excise, Aurangabad .. Appellant Vs. Western Coalfields Ltd. .. Respondent 3) Appeal No. E/412/04 and E/CO/98/04 arising out of Order-in-Appeal No. BPS(349)2/2003 dated 21.10.2003 passed by Commissioner of Central Excise (Appeals), Aurangabad. Commissioner of Central Excise, Aurangabad .. Appellant Vs. Eastern Coalfields Ltd. .. Respondent 4) Appeal No. E/557/04 arising out of Order-in-Appeal No. BPS(349)2/2003 dated 21.10.2003 passed by Commissioner of Central Excise (Appeals), Aurangabad. Eastern Coalfields Ltd. .. Appellant Vs. Commissioner of Central Excise, Aurangabad .. Respondent For approval and signature: Honble Mr. P.G. Chacko, Member (Judicial) Honble Mr. P.R. Chandrasekharan, 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 : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Appearance:
None for assessee Shri K. Lal, Authorised Representative (SDR), for Revenue CORAM:
Honble Mr. P.G. Chacko, Member (Judicial) Honble Mr. P.R. Chandrasekharan, Member (Technical) Date of Hearing: 5.7.2011 Date of Decision: 5.7.2011 ORDER NO Per: P.G. Chacko There is no representation for M/s. Eastern Coalfields Ltd. despite notice nor any request of theirs for adjournment. M/s. Western Coalfields Ltd., not represented today, have made an application for adjournment on the ground that certain appeals involving similar issue are pending before the apex court and the Bombay High Court and hence the present appeal before the Tribunal should wait for the outcome of those appeals. In the absence of evidence to show that the issue involved in the present appeal of M/s. Western Coalfields Ltd. is identical to the issue said to be pending before the High Court and the apex court, we are not inclined to accede to the adjournment request. In the cases of both the parties, the Revenue is represented by learned SDR.
2. M/s. Western Coalfields Ltd. (WCFL, for short) and M/s. Eastern Coalfields Ltd. (ECFL, for short) had purchased conveyor belts from M/s. International Conveyor Ltd. (ICL, for short), in the process, assuming the duty burden on the goods. The manufacturer/supplier, viz. ICL, had paid duty on the goods under protest in the wake of a classification dispute between them and the department. The classification dispute ultimately reached the apex court and the same came to be settled in favour of the manufacturer. The apex courts decision prompted the party to claim refund of the amount of duty paid in excess. Accordingly, they filed refund claim which came to be rejected on the ground of unjust enrichment inasmuch as the incidence of duty had been passed on to the buyers.
3. The order of rejection of refund claim was unsuccessfully challenged by ICL before this Tribunal and the Tribunals decision was accepted by them vide order No. C-I/2803-2811/WZB/2003 dated 18.11.2003. Two refund claims of ICL had been so rejected on the ground that the incidence of duty had been passed on, in one case, to WCFL and, in another case, to ECFL.
4. WCFL and ECFL subsequently filed refund claims, which came to be rejected on the ground of time-bar and on the further ground of unjust enrichment. Aggrieved, both the parties preferred appeals to the Commissioner (Appeals), who, in the case of each appeal, held that the refund claim was not time-barred though barred by unjust enrichment.
5. Against the adverse part of the appellate Commissioners decision, WCFL and ECFL preferred the present appeals to this Tribunal, wherein their contention is that their refund claims are not barred by unjust enrichment. The departments appeals before us are against the view taken by the lower appellate authority with regard to limitation. In these appeals, the Revenues contention is that both the refund claims were heavily time-barred and hence liable to be rejected on that ground.
6. One of the grounds raised by WCFL and ECFL in their memoranda of appeals is that the capital goods in question were captively used and hence there was no question of passing the incidence of duty to any other person. In this connection, they have relied on the Bombay High Courts decision in the case of Solar Pesticides Ltd. The learned SDR submits that the subsequent decision of the Honble Supreme Court in UOI vs. Solar Pesticides Ltd. 2000 (116) ELT 401 (SC) is in favour of the Revenue inasmuch as, in that case, the principle of unjust enrichment was held to be applicable to cases of captive consumption. A second contention raised by the parties is that the price of coal could not be arrived at on the basis of cost construction and the same was fixed by the Ministry of Energy (Department of Coal) from time to time under the Colliery Control Order, 1945 read with the Essential Commodities Act, 1955. It is contended that, as the price of coal is a statutory price, the presumption that the element of Central Excise duty is inbuilt in the price of coal is not sustainable. In other words, both the parties resist the applicability of the bar of unjust enrichment on the ground that the capital goods was used for the manufacture of coal and, as the price of coal (final product) was constant in the form of administered price, there is no question of passing of burden of the element of Central Excise duty to any other person. In this connection, the learned SDR submits that it is settled law that the constancy of price is no ground against the bar of unjust enrichment. In this connection, he has relied on CCE, Mumbai-II vs. Allied Photographics India Ltd. 2004 (166) ELT 3 (SC), wherein it was held, inter alia, that uniformity in price before and after assessment would not lead to inevitable conclusion that the incidence of duty was not passed on to the buyer as such uniformity might be due to various factors.
7. Moving the appeals of the Revenue, the learned SDR submits that the refund claims filed by both WCFL and ECFL were heavily time-barred. It is submitted that the learned Commissioner (Appeals) erred in taking the view that the refund claims were not liable to be held to be time-barred as the manufacturer/supplier of the goods had paid duty under protest. It is submitted that the party claiming refund should have paid the duty under protest and that the protest of the manufacturer will be of no avail to the buyer. In this connection also, the learned SDR has relied on Allied Photographics (supra) wherein the apex court had held that the buyer/distributor of the goods was not entitled to step into the shoes of the manufacturer and claim the benefit of the second proviso to Section 11B(1) of the Central Excise Act on the ground that the manufacturer had paid excise duty under protest. Reliance has also been placed on South Eastern Coalfields Ltd. vs. CCE, Kolkata-IV 2010 (252) ELT 140 (Tri.-Kolkata), wherein a co-ordinate Bench of this Tribunal held to the same effect. Relying on the cited case law, the learned SDR submits that the view taken by the learned Commissioner (Appeals) regarding limitation has to be disapproved and the Revenues appeals have to be allowed.
8. After considering the submissions, we note that the fundamental issue to be considered is whether the refund claims in question were time-barred or not. It is not in dispute that the refund claims were filed far beyond the prescribed period of limitation. The only question to be addressed is whether the protest registered by ICL (manufacturer/supplier) at the time of payment of duty on the conveyor belts supplied to WCFL and ECFL can be relied on by the latter in the context of claiming refund of the excess duty. In other words, the question is whether the buyers can step into the shoes of the manufacturer and claim the benefit of the protest of the latter. This question is no longer res integra. The Honble Supreme Court in the case of Allied Photographics (supra) settled it in favour of the Revenue. Neither WCFL nor ECFL has a case that they assumed duty burden under protest. Their only contention is that the payment of duty under protest by the manufacturer/supplier would constitute a ground for them to claim refund of the excess amount of duty without time-bar. This case is no longer sustainable in view of the case law cited by the learned SDR. In the result, the view taken by the learned Commissioner (Appeals) regarding time-bar has to be rejected and the appeals filed by the Revenue have to be allowed. The orders passed by the original authority rejecting the refund claims on the ground of time-bar have to be restored. In this scenario, there is no room to examine whether any of the refund claims is barred by unjust enrichment. Even if it is assumed to the contra, the decision would go in favour of the Revenue for want of evidence against the bar of unjust enrichment.
9. In the result, the appeals of the Revenue are allowed and those of the parties are rejected. The cross objections filed by the department are also disposed of.
(Dictated in Court) (P.R. Chandrasekharan) Member (Technical) (P.G. Chacko) Member (Judicial) tvu 1 8