Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Indian Oil Corporation Ltd on 5 March, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/48/2009-SM [Arising out of Order-in-Appeal No. 21/2008 dated 29/08/2008 passed by the Commissioner of Customs, Central Excise and Service Tax, Visakhapatnam] For approval and signature: HON'BLE Mr. B.S.V. MURTHY, TECHNICAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Commissioner of Central Excise, Service Tax and Customs Visakhapatnam-II Central Excise Buildings, Port Area, Visakhapatnam 500 035 Andhra Pradesh Appellant(s) Versus Indian Oil Corporation Ltd. Rajamundry Terminal, Gummaladoddi, Korukonda Post, East Godavari Dist.- 533 289 Respondent(s)
Appearance:
Mr. J. Dhinakaran, Authorized Rep.
Marketing Division, Southern Region, Indian Oil Bhavan, 139, Mahatma Gandhi Road, (Nungambakkam High Road) Chennai 600 034 For the Appellant Mr. S. Ila, AR For the Respondent Date of Hearing: 05/03/2015 Date of Decision: 05/03/2015 CORAM:
HON'BLE Mr. B.S.V. MURTHY, TECHNICAL MEMBER Final Order No. 20546 / 2015 Per: B.S.V. MURTHY Revenue is in appeal against the impugned order wherein the Commissioner has taken a view that respondent-assessee is eligible for the refund of Rs. 6,16,188/- (Rupees Six Lakhs Sixteen Thousand One Hundred and Eighty Eight only) and claimed by them. The refund was claimed on the ground that appellants had paid full duty on the motor spirit obtained by them for blending with ethanol and sell it. For motor spirit received for blending with Ethanol, concessional rate of duty was availed under Notification No. 28/2002-CE dated 13.05.2002. The notification also prescribed a condition that the person who seeks to obtain motor spirit for blending with Ethanol is required to follow the procedure prescribed under Central Excise (Removal of Goods at Concessional Rate of Duty for manufacture of Excisable Goods) Rules, 2001 (Rules).
2. The refund claim was rejected by the original authority in the second round of litigation on three grounds. The first ground was that the appellants had not followed the procedure prescribed under the Rules, the second ground was that the appellants had not crossed the hurdle of unjust enrichment and thirdly the appellant had not shown the duty liability separately in their invoices. On the appeal filed by them, the learned Commissioner held that the appellant is eligible for the benefit and hence the Revenue is in appeal.
3. Heard both the sides. Learned AR submits that the appellants did not follow the procedure prescribed under the Rules and therefore the refund claim is clearly not admissible. They should have declared their intention of availing concessional rate of duty to the department and obtained motor spirit only after such declaration of intention and obtaining the registration certificate and following the procedure prescribed under the law. Since they have failed to do so the refund claim is fairly not admissible. He also draws my attention to paragraph 3 (II) of grounds of appeal wherein it has been shown that the average benefit of the oil companies due to Ethanol clearance is Rs. 5.42 whereas the difference between the Ethanol blended motor spirit and other motor spirit is only Rs. 1. Therefore there is unjust enrichment.
4. The respondents have filed cross objections. The authorized representative of the assessee submitted that the Government of India decided to launch Ethanol blended petrol in Andhra Pradesh. Since they got information about the proposals, they had approached the department to obtain the registration in the middle of 2003. The assessee had felt that registration is not required since the process did not amount to manufacture but the officers of the Revenue felt that registration is required. In the meanwhile before a decision could be taken on this issue, the respondents received motor spirit on which refund has been claimed now. Thereafter the assessee requested the HPCL to charge concessional rate of duty and on 14.02.2003, the registration certificate was received. Thereafter HPCL paid the differential duty and refund claim was filed by the assessee.
5. I have considered the submissions made by both the sides. As regards the procedure to be followed and the departments objection to the sanction of the refund by the Commissioner (Appeals) for having not followed the procedure, I find that the Commissioner (Appeals) has relied on the fact that the Commissioner (Appeals) in the first round of litigation had already taken a view that the assessee is free to apply for registration and departmental officer will examine merits and grant refund if they are otherwise eligible for refund. He has interpreted this to mean that the procedure relating to registration was held to be unnecessary in this case having regard to the facts and circumstances. The unjust enrichment issue also was considered by the Commissioner and he held that when there is no change in the price, it cannot be said that assessee has benefited unjustly. In this connection, the authorized representative relied upon the decision of this Tribunal in the appellants own case reported in [2011 (263) E.L.T. 698 (Tri.-Ahm.)].
6. I find that the decision of the Tribunal relied upon by the assessee in this case is applicable to the facts of this case and on this ground also the stand taken by the Revenue that there is unjust enrichment cannot be sustained. Further I also find myself in agreement with the Commissioners observation as regards unjust enrichment. I also agree that the observations of the learned Commissioner that the issue as to whether without following procedure prescribed under the Rules, assessee was eligible for the benefit or not attained finality with the order passed by the Commissioner (Appeals) on 30.01.2006 vide Order-in-Appeal No. 26/06 (V-II) CE. This order was not appealed against by the Revenue and in such a situation, the observations of the Commissioner that refund claim has to be examined on merits and the assessee can apply for registration now is correct. In this case the assessee had already applied for the registration which was granted on 14.02.2003 that is within less than a month of the receipt of the first consignment. Therefore both on procedural aspect as well as on unjust enrichment aspect, the appeal filed by the Revenue cannot be considered in their favour. In view of the above discussion appeal is rejected with consequential relief to the assessee, if any.
(Order pronounced in open court) (B.S.V. MURTHY) TECHNICAL MEMBER iss