Custom, Excise & Service Tax Tribunal
Auxichem vs Commissioner Of Central Excise, ... on 25 June, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/2737/05 (Arising out of Order-in-Appeal No. AT/268/BEL/2005 dtd. 16/5/2005 passed by the Commissioner of Central Excise (Appeals), Mumbai Zone-II] For approval and signature: Honble Mr Ramesh Nair, Member (Judicial) =======================================================
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 :
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?
=======================================================
Auxichem
:
Appellants
VS
Commissioner of Central Excise, Belapur
:
Respondent
Appearance
Shri. Vishal Agarwal, Advocate for the Appellants
Shri. V.K. Shastri, Asstt. Commissioner (A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 25/6/2015
Date of decision: 25/6/2015
ORDER NO.
Per : Ramesh Nair
This appeal is directed against Order-in-Appeal No. AT/268/BEL/2005 dtd. 16/5/2005 passed by the Commissioner of Central Excise(Appeals), Mumbai Zone-II, wherein Ld. Commissioner (Appeals) upheld the Order-in-Original and rejected appeal of the appellant.
2. The factual background of the case is that there was a parallel proceeding against appellant wherein issue of classification of their final product is under dispute. On that issue the Adjudicating Authority confirmed classification by deciding classification under T.I. 15-AA and confirmed demand of duty Rs. 4,62,460/-. On appeal by the appellant in the classification case then the Collector, Central Excise (Appeals) Bombay vide Order-in-Appeal No. HN-2122/TH-371/85 dated 7/1/1986 upheld the said order of the adjudicating authority and held that product was correctly classified under T.I. 15-AA. Subsequently, appellant filed refund claim for Rs. 13,14,449/- for the period from 31/8/1982 to 28/1/1986. Meanwhile department filed appeal before CEGAT. Tribunal vide order No. 144/88-C dated 1/1/88 dismissed the departmental appeal and confirmed classification under T.I. 15-AA. Thereafter, the appellant filed revised refund claim of Rs. 14,03,666/- covering period 31/8/82 to 15/2/88. The adjudicating authority vide Order-in-Original No. V(15AA) 18-6486 dated 13/9/89 rejected the refund claim on the ground of unjust enrichment by applying Honble Bombay High Court Judgment in W.P. No. 2204/88 in the case of M/s. Roplas India Ltd. The appellant filed appeal in the refund matter before the Collector Central Excise (Appeals) Bombay challenging the said order. The Collector C. Ex. (Appeals) vide Order-in-Original No. GSM-318/90/B-III dated 24/4/1990 allowed the appeal filed by the appellant on the ground that the question of unjust enrichment is alien to the provisions of Section 11B of CEA, 1944. After receipt of the Order-in-Appeal dated 24/4/1990, the Asstt. Collector of Central Excise issued another show cause notice proposing rejection of claim on the ground of time bar. In the mean time department moved Supreme Court against CEGAT order No. 144/88-C dated 1/1/1988. The Honble Supreme Court vide order dated 6/11/1996 upheld the Tribunals order. The claim was pending and appellant filed a writ petition in High Court. The Bombay High Court vide its order dated 1/7/2003 directed department to decide the refund application filed by the appellant vide their application dated 3/5/1990 in accordance with law as expeditiously as possible at any date within six months from the date of receipt of the Writ order from the Court. Accordingly, the adjudicating authority rejected the refund claim on the ground that the appellant has passed on the incidence of duty to their customers. Being aggrieved by the said adjudication order, the appellant filed appeal before the Commissioner (Appeals), who rejected the appeal of the appellant on the ground of unjust enrichment vide the impugned order dated 16/5/2005, therefore the present appeal.
3. Shri. Vishal Agarwal, Ld. Counsel for the appellant submits that in case of first show cause notice dated 17/7/1989 revenue sought to reject the refund claim on the ground of unjust enrichment which was travelled up to Commissioner (Appeals) and the Commissioner (Appeals) vide order dated 13/3/1990 allowed the appeal of the appellant wherein it was categorically held that the unjust enrichment was alien to Section 11AB and same is not applicable in the present case. Since the said order was not appealed against by the Revenue, as regard the unjust enrichment, it attained finality, therefore in the present round of litigation Asstt. Commissioner should not have issued show cause notice and rejected the claim on unjust enrichment. The Commissioner (Appeals) also gravely erred in taking u-turn in the impugned order in as much as he denied the refund claim on the ground of unjust enrichment. The Order-in-Appeal dated 30/3/1990 attained finality thereafter neither Asstt. Commissioner nor the Commissioner (Appeals) has jurisdiction to again decide the same issue by issuing a fresh show cause notice, adjudication order and Order-in-Appeal. In this regard the Ld. Counsel placed reliance on the judgment of Commissioner of C. Ex. Mumbai-IV Vs. Beekalene Fabrics Pvt. Ltd. [2008(229) ELT 659 (Bom.)]. As regard the rejection of the refund claim on the ground of limitation holding that the appellant have not paid duty under protest, therefore the same is time bar being filed beyond the one year, it is his submission that firstly in the first show cause notice the Asstt. Commissioner has not disputed limitation. In the same case it is not permissible in law to issue another show cause notice raising new ground i.e. limitation therefore whole proceedings in the show cause notice of the present case is vitiated and the rejection of refund on the ground of limitation is not sustainable. Without prejudice, he submits that refund arises due to settling of classification dispute, therefore when matter was disputed by the department on classification that itself is the ground that duty was paid by the appellant under protest. It is settled position in law that when the contention of the department is not acceptable to the appellant and appellant contest the same in the process of adjudication and further appeal by the Appellant itself is amount to protest. Excise duty paid during such litigation shall be treated as payment under protest, therefore in the appellants case also it cannot be said that there is no protest from the appellant. He also submits that the appellant filed classification list in the year 1982, when the dispute has started, wherein appellant categorically declared in the said classification list that duty will be paid in protest. The refund is for the period 1982-88 therefore the protest expressed by the appellant in the classification list filed in 1982 was operative through out the period till 1988 therefore payment of duty made during 1982-88 is payment of duty under protest. In these facts, there is no dispute that duty was paid under protest and hence limitation is not applicable. In support of his claim, Ld. Counsel relied upon judgment of Collector of Central Excise, Bombay-III V/s Pidilite Industries Ltd. [1998(101) ELT 693 (Tri.)].
4. On the other hand, Shri. V.K. Shastri, Ld. Asstt. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that as regard the unjust enrichment as and when refund is processed for sanction, aspect of unjust enrichment has to be verified. Since in the present case, refund was not sanctioned so far therefore at the time of sanctioning the refund claim, unjust enrichment was correctly gone into by the sanctioning authority and found that appellant could not prove that incidence of refund amount has not been passed on to any other person. Ld. Lower authority has correctly invoked the provisions of unjust enrichment and rightly rejected the refund claim on the ground of unjust enrichment. As regard the limitation on which refund claim was rejected, he submits that since limitation has not been verified in the first round therefore before sanctioning, vital aspect of limitation has to be considered, therefore Asstt. Commissioner first time, before disposal of the claim verified aspect of limitation and found that appellant has not complied with the procedure of the Rule 233(b) for the purpose of payment of duty under protest. Therefore Ld. Lower authority was correct in rejecting the refund on the ground of unjust enrichment and also on limitation.
5. I have carefully considered the submissions made by both sides.
6. In the impugned order the refund was rejected explicitly on the ground of unjust enrichment. However, though the original authority rejected the refund on the ground of unjust enrichment and on the issue of limitation also and appellant filed appeal on the both the points but first Commissioner (Appeals) has not given any findings on the limitation and he only decided the case on the ground of unjust enrichment. It appears that Ld. Commissioner (Appeals) in the impugned order rejected the claim only on the ground of unjust enrichment from which it appears that Commissioner (Appeals) is convinced with the ground taken by the appellant on the limitation.
6.1 As regard the rejection of claim in the proceedings of second show cause notice on the ground of unjust enrichment it is observed that the Ld. Commissioner (Appeals) in the same case in first appellate order given following findings I have considered matter carefully; I am in agreement with the appellant that the subject of unjust enrichment is alien to the provisions of Section 11B of the Act ibid. Why Government desire to make such provisions, it would have incorporated the same in the Section itself and has been done under Section 11C of the Act. Even other wise, Central Board of Excise and Customs vide Telefax No. 390/93/88-AU has advised that the grant of refund should not be deal on account of concept of unjust enrichment. In view of what is stated above, I set aside the impugned order and allowed the appeal of the appellant.
From the above order of the Commissioner (Appeals), it is clear that the refund which was rejected on the ground of unjust enrichment by the original authority vide order dated 13/9/1989 has been allowed by setting aside the Order-in-Original. It is undisputed that after this order in appeal dated 24/4/1990, the Revenue has not filed any appeal against the said order dated 24/4/1990 therefore same attained finality. Thereafter by way of another show cause notice the Asstt. Commissioner again raised point of unjust enrichment and the same was adjudicated against assessee and Commissioner (Appeals) upheld the same vide impugned order. I am very clear in my mind that such proceedings is absolutely non est and infructuous for the reason that once the issue has been settled by the Commissioner (Appeals) without challenging the same, Rvenue could not again raised the same issue by way of another show cause notice and deciding the same contrarily by taking U-turn. The Asstt. Commissioner and Ld. Commissioner (Appeals) in the subsequent proceedings held that the provision of unjust enrichment is applicable in the case pertaining to the period before the enactment of provision of unjust enrichment and that the refund is sanctioned subsequent to the enactment. Even though contention of the Ld. Asstt. Commissioner is taken as correct but this contention could have been raised not by issuing fresh show cause notice but by way of appeal against the earlier order (dated 24/4/1999) of the Commissioner (Appeals). Since the department failed to file an appeal against the said order, the order dated 24/4/1999 passed by the Commissioner (Appeals) has attained finality and all the proceedings subsequent to that by way of another show cause and adjudication and appeal become non-est and therefore the order dated 24/4/1999 shall prevail by which it was held that unjust enrichment is not applicable. In view of this position the refund claim rejected on the ground of unjust enrichment in the impugned order is not sustainable. As regard the limitation, I find that the refund claim arises only due to the payment of duty on departments contention regarding the reclassification of the goods. Since the appellant has been contesting the issue of classification and finally succeeded, present refund arise in respect of excess duty paid. The appellants contest on the classification itself is expression of protest and in my view no separate procedure for payment of duty is required to be carried out. The concept of under protest is not mere procedural formality but essence payment under protest is that the assesees expression of protest should be informed to the department. I am of the view that the contest on the issue which is the cause for payment of duty is better expression then mere filing a letter. Therefore, in my view excess duty payment made for which refund is sought for, is under protest. Moreover, I have gone through the classification list of the year 1982 wherein the appellant in the classification list mentioned as duty will be paid in protest. From the said classification list also, it can be seen that the appellant have explicitly declared to the department that duty shall be paid under protest. This also clearly evident that appellant have paid duty under protest. The payment of duty during the period of 1982-88 is covered by this classification list which is evidence of payment of duty under protest. It was held by this Tribunal in the case of Pidilite Industries Ltd (supra) as cited by the Ld. Counsel that provisional payment of duty such as shown in the classification list shall be compliance of Rule 233(b) of Central Excise Act and the said payment of duty is made under protest.
6.2 In view of the above discussion and the records, I find that the impugned order rejecting claim on the ground of unjust enrichment as well as limitation is not sustainable, hence, the same is set aside. The appeal is allowed with consequential relief, if any, in accordance with law.
(Operative order pronounced in court) Ramesh Nair Member (Judicial) sk 10 E/2737/05