Custom, Excise & Service Tax Tribunal
Cce, Lucknow vs M/S. Oswal Chemical & Fertilizers Ltd on 24 February, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO. 2, R.K. PURAM, NEW DELHI COURT III CENTRAL EXCISE APPEAL NO. 1182 OF 2008 [Arising out of Order-in-Appeal No. 23-CE/LKO/2008 dated 29.02.2008 passed by the Commissioner (Appeals), Customs & Central Excise, Lucknow] For approval and signature: Honble Mr. M. Veeraiyan, Member (Technical) Honble Mr. P.K. Das, Member (Judicial) 1. Whether Press Reporters may be allowed to see the order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would 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 of the order? 4. Whether order is to be circulated to the Departmental authorities? CCE, Lucknow Appellant Vs. M/s. Oswal Chemical & Fertilizers Ltd. Respondent
Appearance:
Shri Virender Kumar Chaudhary, D.R., for the Revenue, Shri K.K. Anand, Advocate for the respondent Coram:
Honble Mr. M. Veeraiyan, Member (Technical);
Honble Mr. P.K. Das, Member (Judicial), Date of hearing/decision: 24th February, 2009 FINAL ORDER NO._________________ dated __________ Per P.K. DAS:
Revenue filed this appeal against Order-in-appeal No. 23-CE/LKO/2008 dated 29.2.2008 passed by the Commissioner (Appeals), Lucknow whereby adjudication order was set aside and the appeal filed by the respondent was allowed with consequential relief.
2. The relevant facts of the case, in brief, are that the respondents are engaged in the manufacture of Fertilizers i.e. Ammonia & Urea classifiable under Chapter 28 and 31 of Central Excise Tariff Act, 1985. On 12.1.1996 the respondents applied for registration under Rule 192 of the erstwhile Central Excise Rules, 1944 to procure Naptha for use in the manufacture of Fertilizers without payment of duty under notification No. 75/84-CE dated 1.3.84, as amended by notification No. 8/96-CE dated 17.1.96. By order dated 8th July, 1997 the Asst. Commissioner, Central Excise, Sitapur rejected the application to issue CT-2 certificate for procuring duty free Raw Naptha. The respondents filed appeal before the Commissioner (Appeals) for procurement of duty free Raw Naptha under Chapter 10 procedure of the erstwhile Rules, who by order-in-appeal No. 304/CE/KNP dated 30.10.98 held that the respondents are eligible to avail the benefit of exemption notification and to procure duty free Raw Naptha under CT-2 certificate under Chapter 10 procedure of the erstwhile Rules. He allowed their application dated 12.1.1996. The respondents filed two refund claims on 6.3.99 for an amount of Rs. 9,10,26,730/- and 52,18,698/- which they paid under protest during the period July, 1996 to December, 1998 on Raw Naptha. The Adjudicating Authority rejected the refund claims on the ground that refund is barred by limitation and they failed to fulfill the condition of Unjust Enrichment and also on the goods were not accompanied by the proper duty paying documents. The Commissioner (Appeals) set aside the adjudication order. Hence, Revenue filed this appeal.
3. Learned SDR reiterates the grounds of appeal. He submits that the respondents purchased the Raw Naptha from the manufacturer. So, the relevant date for availing the refund claim as provided under clause (B)(e) of Explanation to Section 11B of Central Excise Act, 1944 would be the date of purchase of the goods by such person. He submits that the respondents filed the refund claim on 8.3.99. He, further, purchased Raw Naptha during the period 1996-97 and 1997-98 is hopelessly barred by limitation. He also submits that the claim of the respondents that they paid the duty under protest without observing Rule 223B of the erstwhile Rules is not sustainable. He also submits that the respondents have submitted the original duty paying documents i.e. invoice to prove that the incidence of duty is paid on the goods. So, there is a violation of Principle of Unjust Enrichment. He, further, submits that the Commissioner (Appeals) passed the order following the decision of the Tribunal in the case of Oswal Chemical & Fertilizers Ltd. vs. CCE, Gauhati, reported in 2004 (172) ELT 216 (Tri.-Del.) which was not accepted by the department and they filed appeal before the Honble High Court of Gauhati.
4. Learned Advocate reiterates the grounds of appeal. He submits that the respondents have several units in different parts of the country. He, further, submits that on the identical issue the Tribunal in respondents own case (supra) has allowed the refund claim. He, further, submits that in their own case on the identical issue the Ahmedabad Bench of the Tribunal vide order No. A/2510/WZB/Ahd./2007 dated 1.10.2007, after giving detailed finding, the matter was remanded to the Commissioner (Appeals) to decide the issue of unjust enrichment on the basis of observation of the Tribunal. He also submits that in the remand proceedings the Commissioner (Appeals), Rajkot, by order-in-appeal NO. 35/2008 dated 14.8.2008 allowed their appeal and set aside the adjudication order and as per his knowledge Revenue has not filed any appeal against the said order.
5. After hearing both the sides and on perusal of the records we find that the facts of the present case are identical to the facts of the respondents own case cited supra i.e. Oswal Chemical & Fertilizers Ltd. vs. CCE, Gauhati, reported in 2004 (172) ELT 216. It is seen that in the said case the respondents filed the application on 12.1.96 for registration under Rule 192 of the Central Excise Rules, 1944 for the purpose of obtaining Naptha under concessional rate of duty. The said application was rejected by the Asst. Commissioner. By Order-in-appeal dated 30th October, 1998 the Commissioner (Appeals) allowed the appeal filed by the respondents holding that the respondents are eligible for the benefit of concessional rate of duty under Chapter 10 procedure w.e.f. 12.1.96. It is noticed that in the said case the stand of the Revenue is that the refund claim was filed on 17.5.99 which is beyond the period of 6 months from 20.10.98 being the date of order of the Commissioner (Appeals) and, therefore, it is barred by limitation. In the present case we find that the respondents filed the refund claim within 6 months from the date of the order of the Commissioner (Appeals). It has also been observed that there is no question of unjust enrichment when Fertilizer Industry Coordination Committee issue certificate showing that while fixing price of Fertilizer Urea made from Naptha was not taken into consideration.
6. The main contention of the learned SDR is that the respondents are the purchaser of the goods and, therefore, relevant date would be the date of purchase. Further, it is contended that the respondents have not paid the duty and, therefore, payment of duty cannot be treated under protest. It is seen that Section 11B(1) of the Act provides that any person claiming refund of any duty of excise may make an application for refund of such duty to the Asst. Commissioner of Central Excise or Dy. Commissioner of Central Excise before the expiry of one year from the relevant date. Second proviso to Section 11B(1) provides that limitation of one year shall not apply when duty has been paid under protest. In the present case we find that the respondents claimed the benefit of concessional rate of duty by their application dated 12.1.96, which was rejected by the Asst. Commissioner. The respondents filed appeal before the Commissioner (Appeals), which was allowed by Order-in-appeal dated 30.10.1998. So, there is no doubt that the respondents paid the duty under protest by way of filing appeal before the Commissioner (Appeals). The submission of the learned DR that the respondents are purchaser and, therefore, date of purchase of the goods is the relevant date. But we are unable to accept such submission in the particular facts and circumstances of the case. In this connection we reproduce the finding of the Tribunal in the respondents own case vide order dated 1.10.2007 as under:-
We find that the appellant had applied for issuance of CT-2 certificate for procurement of Naphtha on concessional rate of duty in terms of Notification No. 75/84. The said request was rejected by the Asst. Commissioner. As such, the appellant was bound to obtain Naphtha on full payment of duty. Further, they filed an appeal against such rejection order before the Commissioner (Appeals). As such, filing of appeal by the appellant has to be treated as protest, especially when there is no separate provision in the law to file protest by the buyer of the good. Challenging the order of the Asstt. Commissioner, before the higher appellate forum is nothing but protest against the action of the adjudicating authority and any duty paid during the intervening period i.e. during the pendency of the appeal before the Commissioner (Appeals) has to be treated as payment of duty under protest. Tribunal in the case of Bayshore Glass Trading Pvt. Ltd. 2002 (148) ELT 1243 (Tri.-Kolkata) has held that filing of an appeal against the assessment order is by itself a protest. Hence, it has to be held in the present case that challenging of order of refusal to issue CT-2 certificate before the Commissioner (Appeals) amounted to protest only. Viewed from another angle, the claim of the appellant for refund of excess duty paid is as a consequence of passing of the appellate order in their favour and is basically implementation of the order of the Commissioner (Appeals). When non-issuance of CT-2 certificate was challenged by the appellant, the success of their appeal is not an empty formality and the appellate order is required to be implemented, as a result of which CT-2 certificate is required to be issued right from the date of their first claim and the benefit of concessional rate has to be extended from that date onwards. In view of this also, we hold that refund made by the appellant cannot be held to be held barred by limitation.
7. While arriving at the above conclusion we would like to look into the matter in different futtings. There is no dispute that the respondents claimed concession of duty, who is also purchaser of the goods. Chapter 10 of the erstwhile rules provides remission of duty on goods used for special industrial purpose. Rule 92 of Chapter 10 of the said rules provides that where the Central Government has, by notification under Rule 8 or Section 5A of the Act, as the case may be, sanctioned the remission of duty on excisable goods other than sale used in any specialized industrial process, any person wishing to obtain remission of duty on such goods, shall make application to the Commissioner. In the present case the respondents who are also purchaser of the goods claimed exemption benefit under the proper notification of the Act to the Central Excise authorities. Therefore, the respondents cannot be treated as purchaser as mentioned in clause (e) of Explanation (B) of Section 11B(5) of the Act. Therefore, the duty deposited by the respondents would come within the purview of Second proviso to Section 11B(1) of the Act. The limitation of 6 months shall not apply as the duty was deposited by the respondents under protest.
8. In view of that we hold that the respondents paid the duty under protest and the normal period of limitation under Section 11B(1) would not apply. Accordingly, we do not find any infirmity in the order of the Commissioner (Appeals). Appeal filed by the Revenue is rejected.
(Operative part pronounced in the Open Court.) (M. VEERAIYAN) MEMBER (TECHNICAL) (P.K. DAS) MEMBER (JUDICIAL) RK