Customs, Excise and Gold Tribunal - Bangalore
The Commissioner Of Central Excise vs Nutrine Confectionery Co. Pvt. Ltd. on 19 October, 2006
Equivalent citations: 2007(217)ELT347(TRI-BANG)
ORDER T.K. Jayaraman, Member (T)
1. This appeal has been filed by the Revenue against the Order-in-Appeal No. 25/2005 (T) CE dated 21.11.2005, passed by the Commissioner of Customs & Central Excise (Appeals), Guntur.
2. The brief facts of the case are as follows:
Consequent to the Hon'ble Andhra Pradesh High Court's order dated 23.9.1982 in Writ Petition No. 4280 of 1982, the Deputy Commissioner of Central Excise, Tirupati Division had finalized the provisional assessment of the Respondent's unit for the period from July 1986 to March 1999. The Restoration Petition filed by the Department in respect of the Appeal No. 10230-31 of 1983 was dismissed by the Supreme Court on 8.3.1999. On finalization of provisional assessment, it was found that the assessee had paid an amount of Rs. 2,12,19,638/- in excess. Therefore, the assessee were asked to file an application for refund under Section 11B of Central Excise Act, 1944, in terms of amended proviso to Rule 9B(5) of the Central Excise Rules, 1944 which relates to unjust enrichment. The Respondents vide their letter dated 09.04.2001 stated that they were not required to file an application for refund under Section 11B of the Central Excise Act, 1944 as the refund has become due consequent to the finalization of provisional assessment. The Deputy Commissioner in his order dated 24.11.2004 rejected the request of the Respondents for refund of the amount paid by them on provisional basis. Therefore, the Respondents approached the Commissioner (Appeals). Following ratio of the various decisions of the Apex Court and the Tribunal, the Commissioner (Appeals) held that the Respondents are rightly eligible for refund of excess duty paid by them during the period from July 1986 to March 1999. He further held that the amendment to Rule 9B(5) made on 25.6.1999 is not relevant as after 1.4.99, there was no provisional assessment pending and only the calculation of the excess amount paid was pending to be quantified which was also quantified by the Range Superintendent before 25.6.1999, when the amended provisions of Rule 9B(5) was made effective. He has also observed in the impugned order that the Department ought to have paid excess amount of duty collected immediately after 31.3.1999, simply because the Department took long time to settle the refund claim. It is not open to the Department to press into service the amended provisions of Rule 9B(5), which came into operation much later than the issue of provisional assessment was settled in principle in the assessee's favour. He had also stated that for the period prior to 25.6.99, there is no legal authority for insisting on filing of refund application under Section 11B in respect of the refund arising out of finalization of provisional assessment under Rule 9B(5). With the above observation, the Commissioner (Appeals) allowed the appeal of the Respondents. The Revenue is aggrieved over the decision of the Commissioner (Appeals) on the ground that the law applicable on the date of filing the refund claim should be applied. In the instant case, the provisional assessment were finalized by jurisdictional authority on 19.4.2000 vide its order dated 19.4.2000 and the assessee was asked to file refund application as per the amended provisions of Rule 9B(5) of the Central Excise Rules and therefore, the law applicable is the amended provision only namely Rule 9B(5) of the Central Excise Rules. In these circumstances, there was a prayer by the Revenue to set aside the impugned Order-in-Appeal.
3. Mr. Anil Kumar, learned JDR appeared for the Revenue and Mr. R. Santhanam, learned Advocate appeared for the Respondents.
4. The learned JDR maintained that when the assessment was finalized, amendment to Rule 9B(5) has already been taken place and therefore, the correct law to be applied is the law prevailing on the duty of the assessment.
5. The learned Advocate made very detailed submissions on behalf of the Respondents. He also cited a large number of case laws to hold that for the relevant period, the doctrine of 'unjust enrichment' cannot be made applicable.
6. We have carefully considered the submissions made by both the sides. The undisputed fact is that the period of finalization of the provisional assessment in the present case is from 1986 to March 1999. The finalization of the provisional assessment is based on the order of the Hon'ble Andhra Pradesh High Court dated 23.9.1982 in Writ Petition No. 4280 of 1982 by which the rule nisi issued earlier on 29.6.1982 was made absolute and the Department was directed to determine the amount of Excise duty refundable to the assessee. The refund amount is in relation to the duty paid on post manufacturing expenses. The Revenue filed an appeal before the Supreme Court against the above judgment of Andhra Pradesh High Court on the grounds of unjust enrichment. The Supreme Court after hearing both the sides, passed a format order dated 29.4.1987 and issued certain directions for computing duty liability and for making assessment with further directions that the assessment initially made stand set aside and fresh assessment be made in accordance with the format order. Subsequently the Supreme Court dismissed the appeal of the Revenue due to non-compliance with directions of the Apex Court to the Revenue. The application for restoration of the dismissed appeal also came to be finally dismissed on 08.3.1999 after hearing the Counsel for the Revenue. Therefore, we agree with the learned Respondent that the order of the High Court stand confirmed by the Apex Court. It should be borne in mind that the High Court order is dated 23.9.1982. The implementation of the above order was kept pending because of the Department's appeal to the Apex Court and finally the restoration application of the Department was also dismissed on 8.3.1999. In view of this development, the Respondents in their letter dated 22.3.1999 requested the Assistant Commissioner to finalise the assessment and to grant refund without further delay. The above letter was followed by a further letter dated 22.6.1999. The Revenue took up finalization of provisional assessment and completed the same on 19.4.2000. The finalization was communicated by the Superintendent in his letter dated 23.5.2000. The Apex Court in the case of Tata Refractories Ltd. v. State of Orissa (2003) 260 ITR 312 has held that the statutory provisions relating to unjust enrichment incorporated under the respective taxing statute cannot be invoked in cases where the High Court has exercised the writ jurisdiction and issued mandamus to the Revenue to pass orders in certain manner and to grant a consequential refund. The order of the Andhra Pradesh High Court is very clear which reads as follows:
2. that the respondent herein be and hereby is directed to determine the Excise Duty refundable after notice to the petitioner and that the said excise duty shall be refunded to the petitioner upon his furnishing Bank guarantee;
Andhra Pradesh High Court order has become final as can be seen from the subsequent events culminating the dismissal of the restoration application of the Revenue by the Supreme Court. It should also be kept in mind that during the relevant period, the doctrine of unjust enrichment was not made applicable to the finalization of provisional assessment. In the case of Hyderabad Industries Ltd. v. CCE , it is held that refund due to the assessee pursuant to the orders of High Court and the Supreme Court must be granted especially when those orders have been passed by the Court/s long before the provisions of Section 11B came to be amended in 1991 to take into consideration the question of unjust enrichment. It is well settled that in respect of the provisional assessment finalized by the Revenue, the question of unjust enrichment and application of Section 11B of the Central Excise Act as amended in 1991 does not arise. This is clear from the following judgments of the Apex Court:
(i) Mafatlal Industries Ltd. v. Union of India
(ii) CCE v. TVS Suzuki Ltd.
(iii) CCE v. Allied Photographics India Ltd. .
The Apex Court in the case of Hindustan Metal Pressing Works v. CCE 2003 (153) ELT 11 (S.C.) has held that in respect of refund for the period prior to 20th September 1991 when Section 11B was amended to empower the Revenue to examine the question of unjust enrichment and deny refund, the matters which became final earlier, cannot be reopened nor can be Revenue pass orders contrary to the decision taken earlier having regard to the principles laid down in the case of Sarai Kella Glass Works Pvt. Ltd. v. CCE in which Rule 173 was interpreted to make it obligatory for the Revenue to grant refund on finalization of assessment and the question of issue of show cause notice for any short fall in duty paid, would not also arise nor can the refund be withheld/denied by invoking Section 11B. In the present case, amendment of Rule 9B has been clearly held to be not retrospective by the Supreme Court in the case of TVS Suzuki (supra) and period covered by the provisional assessment being July 1986 to March 1989, long before the amendment of Rule 9B on 26.6.1999. There is no question of invoking the amended Rule 9B to require the assessee to file refund claim and prove that there is no unjust enrichment as a pre-condition for grant of refund already worked out. It was also pointed that the prior to the amendment of Rule 9B, there was no need to file any refund claim and refund has to be done suo motu on finalization of provisional assessment. It was also urged that Rule 173 as it stood earlier mandatorily requires the refund to be given or the demand to be paid without any further proceedings by way of notice, hearing, order, etc. by any authority. In the present case, the assessment was finalized in 2000 on account of the Departmental efforts to go in appeal against the order of the Andhra Pradesh High Court. The plea of the unjust enrichment was already taken before the High Court and the Supreme Court by the Revenue and the same had been rejected by both the Courts long before the amendment to Rule 9B and therefore, it is not correct to nullify the orders of the High Court which had become final on the ground that the assessment was finalized in 2000 and the law as on the date of finalization of assessment would prevail. The High Court order cannot be circumvented in its manner. The facts of the case law in the case of Hindustan Lever Ltd. v. CCE relied upon by the Revenue are distinguishable. In that case, there was no judgment of the High Court in a Writ Petition giving mandamus to the Revenue to grant the refund nor there was a decision of the Supreme Court dismissing the appeal of the Revenue after hearing both sides. In any case, an amendment to Rule by the executive in exercise cannot over-ride the statute or nullify the judgments of the High Court rendered under the Constitution. The Apex Court in the case of MRF Ltd. v. CCE has held that once refund become due pursuing the orders of the higher authority and court, there is no need even for an application to be filed by the assessee to claim the refund due and the Revenue is duty bound to grant the refund. Section 11B (3) as it existed, clearly provided that -
where as a result of any order passed in appeal or revision under this Act, refund of any duty of excise becomes due to any person, the Assistant Collector of Central Excise may refund the amount to such person without his having to make any claim in that behalf.
In view of our above findings, we do not find any merit in the Revenue's appeal and the same is rejected.
(Operative portion of the order has been pronounced in the open court on completion of hearing)