Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S. Pudumjee Plant Laboratories Ltd ... on 20 January, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/1392/05-MUM [Arising out of Order-in-Appeal No. PIII/070/05 dated 11/2/2005 passed by the Commissioner(Appeals), Central Excise, Pune-III] For approval and signature: ancestor Honble Mr Ramesh Nair, Member(Judicial) Honble Mr. Raju, Member (Technical) =======================================================
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?
=======================================================
Commissioner of Central Excise, Pune-III
:
Appellants
VS
M/s. Pudumjee Plant Laboratories Ltd Pune
:
Respondent
Appearance
Shri. Ashutosh Nath, Asstt. Commissioner(A.R.) for the Appellants
Shri. S.R. Prabhune, Asstt. General Manager for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Honble Mr. Raju, Member (Technical)
Date of hearing: 20/1/2016
Date of decision /2016
ORDER NO.
Per : Ramesh Nair
This Revenues appeal is directed against Order-in-Appeal No. PIII/070/05 dated 11/2/2005 passed by the Commissioner(Appeals), Central Excise, Pune-III, wherein Ld. Commissioner (Appeals) allowed the appeal in respect of refund of Rs. 18,91,609/-.
2. The issue involved in the present case is that the appellant being 100% EOU, whether they are required to pay duty on the cut flowers grown and sold in DTA. Since the respondent already paid duty on the cut flowers i.e. non excisable goods, whether they are entitle for the refund claim and whether refund claim hit by unjust enrichment.
3. Shri. Ashutosh Nath, Ld. Asstt. Commissioner(A.R.) appearing for appellant(Revenue) reiterating the grounds of appeal submits that the respondent being 100% EOU are required to pay duty on the cut flowers which is equal to the custom duty leviable on the cut flowers as if the same is imported into India. However on query from the bench that in the grounds of appeal, the Revenue seeks to demand duty on the imported input consumable used in the production of the cut flowers cleared to DTA, he submits that it is majority of duty of equal to custom duty on the input which is to be levied on the cut flowers. He submits that in the following judgments this has been decided, the duty is leviable on the cut flowers even though it is not excisable.
(a) Union of India Vs. Adarsh Metals Corporation[1994(74) ELT 821(Raj.)]
(b) Xlo India Ltd Vs. CCE, Pune[2004(178) ELT 639(Tri. Mum)]
(c) Jay Enterprises Vs. Union of India[2004(178) ELT 72(Guj)]
(d) Andrew Telecom (I) Pvt. Ltd Vs. CCE, Goa[2014(34) S.T.R 562(Bom.)]
(e) Western Coalfields Ltd. Vs. CESTAT, New Delhi[2013(288) ELT 203(Bom.)]
(f) Harinagar Sugar Mills Ltd Vs. CCEX, Mumbai III[2012(295) ELT 553(Tri. Mum)]
(g) C.C.Ex & Cus Nashik Vs. Crompton Greaves Ltd[2011(22) S.T.R. 380(Tri. Mumbai)]
(h) Green Brilliance Energy P. Ltd Vs. C. C. Ex. &S.T. Vadodara-I[2015(325) ELT 351(Tri. LB)]
(i) Commissioner of Central Excise, Pune-I Vs. Horizon Flora India Ltd[2015(323) E.L.T. 177(Tri. Mum)] 3.1 On the issue of Unjust Enrichment, he submits that the Ld. Commissioner held that unjust enrichment is not applicable in the case where duty was paid without authority of law however Ld. Commissioner(Appeals) has not dealt with the factual aspect of any documentary evidence. From the findings of the Ld. Commissioner (Appeals) order it appears that the respondent have not submitted any evidence of non passing of incidence of duty for which the refund is sought for.
4. Shri. S.R. Prabhune, Ld. Asstt. General Manager appearing on behalf of the Respondent submits that the Ld. Commissioner sanctioned the claim of the duty only to the extent of duty as whole paid on the cut flowers. The cut flowers is non excisable goods, he submits that the judgment relied upon by the Revenue are not applicable to the facts of the present case for the reason that in case of Horizon Flora India Ltd(supra) which is based on LR Brothers, Indo Flora Ltd. In the said judgment it was clearly held that as per the Notification No. 126/94-Cus dated 3/6/1994 in case of non excisable goods duty is required to be paid on the imported input and not on the value of the cut flowers being non excisable goods. Ld. Commissioner (Appeals) applying modification held that duty of Rs. 1,18,760/- on the imported input such as, fertilizers, chemicals, etc. is payable and refund to that extent was disallowed. In this fact the duty over and above the custom duty leviable on the imported inputs is not payable on the cut flowers. He submits that judgment rather support the respondents case.
4.1 As regard unjust enrichment, he submitted certain invoices and books of account and argument that as per the loss in the balance sheet and also fact that in the invoice excise duty was not charged, it was paid subsequent clearance of the goods, incidence of duty has not been passed on.
5. We have carefully considered the submissions made by both sides.
6. We find that the cut flowers produced by the respondent is not excisable goods at the relevant time, they were working under Notification No. 126/94-Cus dated 3/6/1994 as amended by Notification No. 56/2001 dated 18/5/2001. Relevant portion of both the notification prior to amendment and after the amendment are reproduced below:
5.1 Para 3(a) of the Notification No. 126/94-CUS. during the period of dispute read as under :-
"Notwithstanding anything contained in this notification the exemption contained herein shall also apply to the said goods which on importation into India are used for the purposes of production, manufacture or packaging of articles and such articles (including rejects, waste and scrap material arising in the course of production, manufacture or packaging of such articles), even if not exported out of India, are allowed to be sold in India under and in accordance with the Export-Import Policy and in such quantity and subject to such other limitation and conditions, as may be specified in this behalf by the Development Commissioner, on payment of duty of excise leviable thereon under Section 3 of the Central Excises and Salt Act, 1944 (1 of 1944) or where such articles (including rejects, waste and scrap material) are not excisable, on payment of Customs duty on the said goods used for the purpose of production, manufacture or packaging of such articles in an amount equal to the Customs duty leviable on such articles as if imported as such."
5.1.1 With effect from 18-5-01, by amending Notification No. 56/2001-CUS., the Notification No. 126/94-CUS. was amended and the old para 3(a) was substituted by new para 3(a). The new para 3(a) reads as under :-
"Notwithstanding anything contained in this notification the exemption contained herein shall also apply to the said goods, which on importation into India are used for the purposes of production, manufacture or packaging of articles and such articles (including rejects, waste and scrap material arising in the course of production, manufacture or packaging of such articles), even if not exported out of India, are allowed to be sold in India under and in accordance with the Export-Import Policy and in such quantity and subject to such other limitation and conditions, as may be specified in this behalf by the Development Commissioner, on payment of duty of excise leviable thereon under Section 3 of the Central Excises and Salt Act, 1944 (1 of 1944) or where such articles (including rejects, waste and scrap material) are not excisable, Customs duty equal in amount to that leviable on the inputs obtained under this notification and used for the purpose of production, manufacture or packaging of such articles, which would have been paid, but for the exemption under this notification, shall be payable at the time of clearance of such articles."
From the above paras, it is very clear that though the duty is required to be paid but only equal to the amount of custom duty on the input used in the production of non excisable goods In the present case the cut flowers is non excisable goods, by application of above notification the duty require to be paid is equal amount of duty leviable on the input used in the production of cut flowers. In the impugned order, Ld Commissioner has upheld the duty of input like fertilizer, chemical therefore duty over and above this amount is not payable on the cut flowers. The judgment cited by the A.R. are on the issue that what duty is to be paid on the non excisable goods and it was held that duty is required to be paid as per notification no. 126/94-Cus i.e. equal amount of custom duty leviable on input used in the excisable goods therefore we find that Ld. Commissioner(Appeals) has correctly held that the duty of the total duty paid by the respondent of amount of Rs. 18,91,609/- is not payable. This tribunal in another case of Commissioner of Central Excise, Pune-I Vs. Vikram Greentech(I) Ltd vide Final Order No. A/2454-2458/15/EB dated 8/4/2015 issued on 5/8/2015 held that no duty can be demanded on cut flowers being non excisable goods. As per above legal position, we are of the view that the duty is not chargeable on the cut flowers produced by the respondent.
6.1 As regard unjust enrichment, we find that the respondent has taken a stand that since duty was not payable, the payment made by them is without authority of law, in such case unjust enrichment is not applicable. The Ld. Commissioner (Appeals) also held that payment made is without authority of law, unjust enrichment is not applicable. We disagree with these submissions as well as findings of the Ld. Commissioner(Appeals) at the time of payment of duty it was paid as excise duty only and refund of the said duty was sought for therefore it cannot be said that duty was paid without authority of law. If the contention of the Ld. Commissioner (Appeals) is accepted then in all the cases where amount paid by the assesee which was not laible to be paid and refund is sought for, the payment will be treated as without authority of law and in such cases the law of unjust enrichment will become redundant. We find that neither the Adjudicating authority nor Ld. Commissioner(Appeals) has verified the documentary evidence produced before us claiming that incidence of duty so paid was not passed on to any other person, we therefore remand the matter to Adjudicating authority to consider all the documents produced/to be produced by the respondent and pass a fresh order only on the aspect of unjust enrichment. Since the matter pertains to 2000-02 it is expected from the Adjudicating authority to pass the denovo adjudication order within a period of two months from the receipt of this order. Appeal is disposed of by way of remand.
(Order pronounced in court on______________) Raju Member (Technical) Ramesh Nair Member (Judicial) sk 8