Custom, Excise & Service Tax Tribunal
The Commissioner vs M/S Essar Steels Ltd on 13 December, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench Single Member Bench Court I Appeal No. C/21346/2015 (Arising out of Order-in-Appeal No.225/2014-15-VCH, dated 09-03-2015 passed by Commissioner (Appeals), C.CE&ST, Visakhapatnam ) For approval and signature: Honble Ms. Sulekha Beevi, C.S., 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 should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? The Commissioner C&CE, Visakhapatnam ..Appellant(s) Vs. M/s Essar Steels Ltd ..Respondent(s)
Appearance Shri Arun Kumar, AR for the Appellant.
Shri Nikhil Rungta, Advocate for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Date of Hearing: 13/12/2016 Date of Decision: 13/12/2016 FINAL ORDER No.A/31415/2016 [Order per: Sulekha Beevi, C.S.]
1. The issue that arises for consideration in this appeal is whether the refund arising out of provisional assessment prior to 13-07-2006 would be hit by the doctrine unjust enrichment.
2 The above appeal is filed by the department challenging the order passed Commissioner (Appeals), who set aside the order of original authority and allowed the refund claimed by the respondent herein.
2.1 Brief facts are that the appellant imported 1,11,506 WMT of Iron Ore concentrate from Brazil vide Bill of Entry No.2310 dated 13-08-1999. The Assistant Commissioner vide Order-in-Original No.5/2001 dated 23-03-2001 increased the AV by an amount of Rs.1,84,10,756/- . On being agitated by the Appellant, the said Order was set aside by the Commissioner (Appeals) Visakhapatnam vide Order-in-Original No.27/2004-VCH, dated 25-08-2004. The subsequent appeals filed by the department before Honble CESTAT, Bangalore and Honble Supreme Court have been rejected vide Final Order No.2022/2006 dated 30-11-2006 and order dated 13-03-2008 respectively. The Review Petition filed by the Department was also dismissed by the Honble Supreme court vide its Order dated 10-12-2008.
2.2 Consequent to the above, the appellant vide letter dated 09-04-2007 filed a refund claim for the refund of excess paid duty of Rs.18,51,681/-. The refund sanctioning authority sanctioned the refund but directed to credit the sanctioned refund amount of Rs.18,51,681/- to Consumer Welfare Fund observing that the appellant could not substantiate that incidence of duty has not been passed on.
2.3 The appellant thereafter filed an appeal before the Commissioner (Appeals), who vide order impugned herein allowed the refund claim. Hence this appeal.
3. On behalf of the appellant/department, the Ld. AR, Sri Arun Kumar reiterated the grounds of appeal. He submitted that the Commissioner (Appeals)has erred in granting the relief of refund to the respondent, as the refund has arisen consequent to the finalisation of provisional assessment U/s 18 of Customs Act, 1962. He submitted that Section 18 has to be read along with Section 27 and that any person who applies for refund of duty in pursuance of order of final assessment has to establish that the refund is not hit by unjust enrichment. The appellant having failed to establish the same, the Commissioner (Appeals) ought to have upheld the order of the original authority, directing to credit the refund to Consumer Welfare Fund.
4. Against this the Ld. Counsel Sri Nikil Rungta, appearing for the respondent adverted to Section 18 of the Customs Act and also relied upon the decisions laid in the following cases.
- CCE Vs Hindalco Industries Ltd. 2008(231)ELT36(Guj)
- CCE Vs Hindalco Industries Ltd. 2010(262)ELT-106(Guj)
- CCE Vs Sayonara Exports Pvt.Ltd. 2015(321)ELT583(Mad)
- CCE Vs Pradeep Phorserate Ltd. 2010(252)ELT502(Ori)
- CCE Vs Hindustan Zinc Ltd. 2009(235)ELT-629(Tri-LB) He submitted that the issue stands settled by the above judgment.
5. I have heard both sides.
6. The Commissioner (Appeals) has discussed in detail with regard to the amendment brought forth by introduction of Section 18 into Customs Act w.e.f 13-07-2006 and also the judgment laid in the case of Hindalco Industries by the Honble High Court of Gujarat . In Hindalco Industries Ltd case, the 2nd issue under consideration by the Honble High Court of Gujarat was whether in the facts and circumstances of the case, the Tribunal is justified in allowing the refund claim on the ground that the finalisation was done prior to amendment to Section 18 of the Customs Act, 1962 effective from 13-07-2006 and, therefore, the doctrine of unjust enrichment would not be applicable. The Honble High Court dismissed the appeal filed by Revenue, holding the issue in favour of assessee, following the decision laid in Commissioner Vs Hindalco Industries Ltd. 2008(231) ELT 36( Guj). The Honble Court has analysed the non-applicability of the decision laid in the case of Bussa Overseas and Properties Pvt.Ltd. Vs UOI 2004(164)ELT A177(SC). Similar view was taken by Honble Madras High court in the case of Sayonara Exports Pvt.Ltd 2015(321) ELT 583(Mad). The present contention put forward by the Ld AR has been considered. In para 17 the Honble Court observed that the contention of Department that the provisions of Explanation-11 to Section 27 of the Act would apply, as is settled in the original order, does not arise in case of refund, which is the case on hand, as the claim in the present case arose prior to 13-07-2006. The Honble High Court of Gujarat in Hindalco Industries Ltd 2008(231) ELT 36(Guj) relied in the above judgments has given a categorical finding on the issue in para 21 and 22 of the judgment as under.
21.?Therefore, on both counts, in light of the authorities referred to hereinbefore, and on interpretation of provisions of Section 18 of the Act, on finalisation of assessment if any excess duty is found to have been paid at the time of provisional assessment Revenue is bound in law to make the refund without any claim being required to be made by an assessee. This would be the position in law upto 12-7-2006 and not thereafter.
22.?In the circumstances, on none of the grounds pleaded can the revenue succeed. Therefore, principles of unjust enrichment found in Section 27 of the Act cannot be read into the provisions of Section 18 of the Act without considering and applying the amendment to Section 18 with effect from 13-7-2006. The Appeal is accordingly dismissed with no order as to costs. The above view has been reiterated by the Honble High Court of Orissa in the case of CC.E&ST, Bhubaneswar-1 Vs Pradeep Phosphates Ltd.2010(2520 ELT 502( Ori) and also by Honble Delhi High Court in the case of CCE Vs Indian Oil Corpn 2012(282) ELT 368(Del) . The larger Bench of Tribunal in the case of CCE, Kandla Vs Hindustan Zinc Ltd 2009(235) ELT 629(Tri-LB) has decided the issue in favour of assessee. The issue stand settled by the judgments discussed above in favour of respondent Therefore, I hold that in the present case, as the period involved is prior to 13-07-2006, the refund is not hit by the doctrine of unjust enrichment. In view thereof, the appeal filed by the department is devoid of any merits and hence dismissed. The cross objections are disposed accordingly.
(Dictated & Pronounced in open court) (SULEKHA BEEVI C.S.) MEMBER(JUDICIAL) dks.
2