Custom, Excise & Service Tax Tribunal
Ce & Cgst Noida vs Simbhaoli Sugar Ltd on 27 November, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT No. I
Excise Appeal No.70657 of 2019
(Arising out of Order-in-Appeal No.NOI-EXCUS-001-APP-227-19-20 dated
23.05.2019 passed by Commissioner (Appeals) CGST & Central Excise, Noida)
Commissioner of Central Excise &
Service Tax, Noida .....Appellant
(C-42/56, Sector-62, Noida)
VERSUS
M/s Simbhaoli Sugar Ltd., ....Respondent
(Unit-Brijnathpur, Simbhaoli, Distt.-Hapur-245207) APPEARANCE:
Shri A. K. Choudhary, Authorized Representative for the Revenue Shri S. C. Kamra, Advocate for the Assessee CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.- 70801/2024 DATE OF HEARING : 27.11.2024 DATE OF DECISION : 27.11.2024 SANJIV SRIVASTAVA:
This appeal has been filed by the Revenue against the Order-in-Appeal No.NOI-EXCUS-001-APP-227-19-20 dated 23.05.2019 passed by Commissioner (Appeals) CGST, Central Excise, Noida. By the impugned order Commissioner (Appeals) has held as follows:-
"6. I further, find that the appellant had reversed the amount of credit taken on molasses „under protest‟ on the insistence of the audit and the demands in this respect were dropped by the Commissioner vide OIO dated 25.07.2018. There was no order appropriating the amounts paid/ reversed by the appellant. Under the circumstances, there was no authority of law to hold back the amounts reversed by the appellant. The amounts so Excise Appeal No.70657 of 2019 2 reversed remained deposits with the government, the retention of which was without the authority of law. The Hon‟ble CESTAT, South Zonal bench, Bangalore, in the case of NSP Electronics Ltd. vs. CCE, Bangalore [2016 (331) E.L.T. 451 (Tri.-Bang.)] has held that - "Amount debited on direction of audit team not appropriated - Once amount debited, Revenue under legal obligation to initiate proceedings for confirmation of amount - In absence of any proceedings to appropriate the amount provisions of Section 11B of Central Excise Act, 1944 not applicable -
Appellant entitled to refund." Moreover, the Hon‟ble CESTAT, in their F.O. dated 28/06/2018 settled the issue in favour of the appellant holding that Rectified Spirit (RS) and Extra Neutral Alcohol (ENA) were manufactured excisable goods and Cenvat credit of central excise duty paid on molasses used in the manufacture of RS and ENA was admissible. The adjudicating authority has grossly erred in rejecting the refund on the ground that the CESTAT had not ordered for consequential relief. The logic given by the adjudicating authority was preposterous and rejection of the refund due to the appellant not only amounted to miscarriage of justice but also non- compliance of the order the Tribunal in which the admissibility of the Cenvat credit on molasses was ruled in favour of the appellant. This was in addition to the fact that vide order dated 25.7.2018 the commissioner had also dropped the demands. It is settled law that if the order of the lower authority is set aside by the Tribunal, all the consequences follow, and it is not necessary to make any specific mention of the benefits to be given to the party. There was no denying the fact that the appellant had paid/reversed the amount under protest, only at the insistence of the departmental audit, for which the refund was sought. Therefore, the appellant was entitled to refund of the said amount with interest at the prescribed rate from the date of the deposit/reversal till the payment Excise Appeal No.70657 of 2019 3 thereof. In the case of Amidhara Texturising (P) Ltd. versus Commr. of Central Excise, Surat [2012 (278) E.L.T. 257 (Tri.-Ahmd.), the Hon‟ble CESTAT, West Zonal Bench, Ahmedabad have held as under-
Interest - Amount deposited on insistence of Department
- Commissioner (Appeals) allowed refund of the amount so deposited - Appellant seeks interest on the same - Tribunal has held in the case of Binjrajka Steel Tubes Ltd. in 2007 (218) E.L.T. 563 (Tribunal) and also in the case of Omjai Bhawani Silk Mills (P) Ltd. in 2009 (243) E.L.T. 560 (Tribunal) that interest is payable on the amount illegally collected from the date of payment of duty to the date of actual payment of refund - In view of these decisions, appellant is eligible for interest - Section 11BB of Central Excise Act, 1944.[para 5].
There are several case laws holding that the amounts paid during investigation/adjudication, in which the demands were set aside, remained deposit which was required to be refunded alongwith interest from the date of the deposit till the payment thereof.
7. In view of the above discussion and findings, the Order- in-Original No.34/REFUND/AC/HPR/2018-19 dated 19/12/2018 is set aside, and the appeal bearing No.1997/CE/NOIDA/APPL/NOI/2018-19 dated 22/02/2019 filed by M/s Simbhaoli Sugars Limited, Unit - Brijnathpur, Hapur is allowed with consequential relief which should be granted forthwith to avoid any further interest liability." 2.1 As a consequence of this order Assistant Commissioner has vide his order dated 29.07.2019 already implemented the order and refunded the amount alongwith interest due to the Respondent.
2.2 Revenue has subsequently filed this appeal on 06.09.2019 reviewed the order of the Commissioner (Appeals) and directed the filing of this appeal which was filed by the Assistant Commissioner and the signature on appeal memo is dated 09.09.2019.
Excise Appeal No.70657 of 2019 4 2.3 Revenue has filed appeal on 11.09.2019 stating following grounds:-
"The Order-in-Appeal No.NOI-EXCUS-001-APP-227-2019- 20 dated 23.05.2019 passed by the Commissioner (Appeals), Central Goods & Service Tax, Noida, in the case of M/s Simbhaoli Sugar Ltd. Unit Brijnathpur Hapur, does not appears to be proper & legal to the extent of observation regarding payment of interest from the date of deposit. It appears that the appellate authority erred in making conclusion for payment of interest from the date of deposit on the amount which party has debited through the CENVAT credit in terms of Rule 6 of the CENVAT Credit Rules, 2004. The Commissioner (Appeals) has misinterpreted the provisions of Section 11B and 11BB of Central Excise Act, 1944 as there is no specific provisions under Central Excise Act, 1994 for payment of interest on reversal of CENVAT credit debited in terms of the CCR, 2004. The Section 11BB of the Central Excise Act, 1944 appears not applicable in this case. Further, the case laws referred by the Commissioner (Appeals) are not regarding interest payment on credit reversed in terms of Rule 6 of CCR 2004. Therefore, case laws referred appears are not applicable in the instant case and order passed by the Commissioner (A) is without supporting case laws."
3.1 We have heard learned Authorized Representative Shri A.K. Choudhary appearing for the Revenue and Shri S.C. Kamra learned Advocate appearing for the Assessee. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 We find that once the order has been implemented the appeal filed should have become infructuous by itself without any protective show cause notice being issued under Section 11A.
4.3 We also find that the Respondent had paid the due under protest by following the prescribed procedure. Once due was Excise Appeal No.70657 of 2019 5 paid under protest the said protest letter should be treated as a claim of refund filed.
4.4 In their appeal revenue has not challenged the refund of the amount of credit reversed by the Respondent under protest. The refund of the amount of credit reversed could not have been considered under any other provision then Section 11B of the Central Excise Act, 1944. In the case of Mafatlal Industries [1997 (89) E.L.T. 247 (SC)] Hon'ble Supreme Court has held as follows:-
"14.Though different provisions governed the subject of refund during different times, there is one feature uniformly common to them all, viz., they purport to be exhaustive on the subject of refund and they provide a period of limitation for making such claims. Rule 11, as it stood prior to August 6, 1977, not only carried the title "No refund of duties or charges erroneously paid unless claimed within three months", it provided specifically that no duties/charges "shall be refunded unless the claimant makes an application for such refund under his signature and lodges it to the proper officer within three months from the date of such payment or adjustment, as the case may be". Similarly, Rule 11, as it obtained between August 6, 1977 and November 16, 1980, provided that claims for refund shall be made "before the expiry of six months from the date of payment of duty". (Of course, this period of limitation did not apply where the duty was paid under protest.) Sub-rule (4) of Rule 11 provided in express terms that "save as otherwise provided by or under these rules, no claim for refund of any duty shall be entertained". The situation obtaining under Section 11B, as it stood during the period November 16, 1980 to September 19, 1991, was no different. Sub-section (1) provided that a claim for refund shall have to be filed "before the expiry of six months from the relevant date" and sub-section (4) provided in specific terms that "save as otherwise provided by or under this Act, no claim for refund of any duty of excise shall be Excise Appeal No.70657 of 2019 6 entertained". Section 11B, as amended by 1991 (Amendment) Act, is similarly worded. Sub-section (1) now provides that a claim for refund has to be filed "before the expiry of six months from the relevant date" and sub-
section (3) declares in emphatic terms that "notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any court or any other provision of this Act or the rules made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub-section (2)". Sub-section (2), it may be mentioned, provides the circumstances in which and the grounds on which a refund shall be made, or shall be denied, as the case may be. It is necessary to emphasis that the exclusivity of these provisions relating to refund - and conversely the bar to other proceedings created by them - is specific to the subject of refund and is apart from and in addition to the general bar implicit in the Act or expressed in some of its other provisions, as the case may be. Because the Act creates new rights and liabilities and also provides the machinery for assessment and adjudication of those rights and liabilities, a bar to the jurisdiction to civil court arises by necessary implication - an aspect dealt with at some length later. [Also see Principle No. 3 enunciated in Kamala Mills Ltd. v. State of Bombay [1966 (1) S.C.R. 64] dealt with in Paras 30 to 33.] The point to be stressed is that the exclusive nature of the refund provisions expressly declared in Rule 11 and Section 11B, at all points of time, is an express and specific one contained in a special statute. It is not the usual finality clause found in several statutes; it is much more.
99.The discussion in the judgment yields the following propositions. We may forewarn that these propositions are set out merely for the sake of convenient reference and are not supposed to be exhaustive. In case of any doubt or Excise Appeal No.70657 of 2019 7 ambiguity in these propositions, reference must be had to the discussion and propositions in the body of the judgment.
(i) Where a refund of tax/duty is claimed on the ground that it has been collected from the petitioner/plaintiff - whether before the
commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 or thereafter - by mis- interpreting or mis-applying the provisions of the Central Excises and Salt Act, 1944 read with Central Excise Tariff Act, 1985 or Customs Act, 1962 read with Customs Tariff Act or by mis-interpreting or mis- applying any of the rules, regulations or notifications issued under the said enactments, such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactment before the authorities specified thereunder and within the period of limitation prescribed therein. No suit is maintainable in that behalf. While the jurisdiction of the High Courts under Article 226 - and of this Court under Article 32 - cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11B. This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it.
The said enactments including Section 11B of Central Excises and Salt Act and Section 27 of the Customs Act do constitute "law" within the meaning of Article 265 of the Constitution of India and hence, any tax collected, retained or not refunded in accordance with the said provisions must be held to be collected, retained or not refunded, as the case may be, under the authority of law. Both the Excise Appeal No.70657 of 2019 8 enactments are self-contained enactments providing for levy, assessment, recovery and refund of duties, imposed thereunder. Section 11B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim of refund and cannot form a basis for maintaining a suit or a writ petition. All refund claims except those mentioned under Proposition (ii) below have to be and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal - which is not a departmental organ - but to this Court, which is a civil court."
Apart from Section 11B there is no other provision in the Central Excise Act, 1944 under which the claim of refund even of amount of CENVAT Credit reversed under protest could have been processed. If the refund claim of this amount is processed and sanctioned as per Section 11B, then the provisions of Section 11BB are automatically attracted in view of specific wordings of that Section.
4.5 In case of Reliance Jio Infocomm Ltd. [2022 (64) G.S.T.L. 362 (Tri.- Mumbai)] Mumbai bench held as follows:-
"55. It is seen that Cenvat credit was reversed by the appellant under protest without there being determination of the liability. After the credit was reversed, the appellant was advised that such a reversal was not warranted. It accordingly, applied for refund of the credit reversed by it which was a method by which such a credit that had been reversed could have been restored. This is what was observed by the Tribunal in Usha International v. Commissioner of Customs, Mumbai [2017 (357) E.L.T. 532].
Excise Appeal No.70657 of 2019 9 The Tribunal held that where an assessee has reversed credit under protest, without there being any determination, such an assessee can seek restoration of such reversal by filing a claim for refund and it is impermissible for the authorities dealing with the refund claim to reject the same as being premature. For coming to this conclusion, the Tribunal relied upon the judgment of the Punjab and Haryana High Court in Century Metal Recycling v. Union of India [2009 (234) E.L.T. 234], wherein it was held that irrespective of whether or not the amount deposited during the course of investigation was voluntary or otherwise, there is no justification in retaining the amount unless there is an assessment and that in all such cases, the assessee is entitled to claim refund. The relevant observations of the Tribunal are reproduced below :
"9. Shri Vipin Jain, Ld. Counsel appearing for the appellant has assailed this view by citing a plethora of judgments and decisions of which two judgments, one of the Punjab & Haryana High Court and other of the Madras High Court are directly on the point. The judgment of the Punjab & Haryana High Court in the case of Century Metal Recycling Pvt. Ltd. v. Union of India - 2009 (234) E.L.T. 234 was dealing with a situation where refund was claimed of the amounts deposited in the course of investigation and there was a dispute, as in the present case between the two parties on the question whether such payments had been made voluntarily or under duress. The High Court held that the question whether the payment was voluntary or under coercion was irrelevant and that as long as there was an assessment and demand, the amount deposited could not be appropriated. The relevant paragraph of this judgment is extracted below :
"13. As far as the amount deposited by the petitioners is concerned, case of the petitioners is that the same was deposited under coercion. Case of the respondents was that the same was deposited voluntarily. Whatever be the Excise Appeal No.70657 of 2019 10 position, unless there is assessment and demand, the amount deposited by the petitioners cannot be appropriated. No justification has been shown for retaining the amount deposited, except saying that since it was voluntarily deposited. In view of this admitted position, the petitioners are entitled to be returned the amount paid."
A division bench of the Madras High Court in the case of Sanmar Foundaries Ltd. v. Commissioner reported in 2015 (325) E.L.T. 854 held that the revenue had no right to retain amounts deposited in the course of an investigation, unless such amounts had been paid either towards a confirmed demand or if such payments were being made in terms of Section 11A(6) of the Central Excise Act, 1944, which corresponds to Section 28(2) of the Customs Act. Various judgments, including the judgment of the Punjab & Haryana High Court were taken note of in this order. We therefore hold that the findings of the lower authorities that the claim for refund was premature is untenable.
10. Even otherwise, we find that once an application of refund has been filed before the refund sanctioning authority, the said authority is duty bound to decide the refund application one way or the other. The refund application can either be rejected or allowed in part or in full. The provisions of Section 27 do not entitle the refund sanctioning authority to return the refund application by terming the same to be premature. Therefore, the action of the Asstt. Commissioner in terming the application as premature is really an act of refusal to exercise a statutory duty to decide upon the refund application one way or the other. For this reason also, the order of the lower authorities is untenable."
4.6 We do not find any merits in the appeal filed by the Revenue or the decision relied upon. In the case of Ranbaxy Laboratories Ltd. [2012 (27) S.T.R. 193 (S.C.)] Hon'ble Supreme Court interpreting the Section 11BB has held interest become Excise Appeal No.70657 of 2019 11 due after three months from the dated receipt of refund claim, which in this case is the letter of protest filed by the Respondent. 5.1 Appeal filed by the revenue is dismissed.
(Dictated and pronounced in open court) (P. K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) LKS