Customs, Excise and Gold Tribunal - Delhi
Rasan Detergents vs Collector Of Central Excise on 4 October, 1996
Equivalent citations: 1997(89)ELT95(TRI-DEL)
ORDER
U.L. Bhat, President
1. These appeals are directed against Order-in-Appeal No. 124-CE/87 and Order-in-Appeal No. 231- CE/CHG/89 passed by the Collector of Central Excise (Appeals), New Delhi.
2. The common appellants are engaged in the manufacture of soap (T.I. 15) and OSA (T.I. 15AA). The dispute in these appeals relates to the period 1-6-1979 to 31-5-1983. The price lists filed by the appellants from time to time showed the equalised freight being collected from the buyers. The price lists were approved without any claim of deduction of the freight charges. The goods were cleared on payment of duty on the basis of approved price lists. On 23-6-1983, the appellants filed refund claim in respect of the duty paid on freight element. The Assistant Collector rejected the claim on the ground of limitation and other grounds. Collector (Appeals) set aside the order in regard to the period within six months prior to the date of the filing of the refund claim and directed the Assistant Collector to dispose of that part of the refund claim afresh. He confirmed the rejection of the refund claim in regard to duty paid prior to six months prior to the date of the filing of the refund claim. This order of the Collector (Appeals) is being challenged in Appeal E/1498/87-A. After remand, the Assistant Collector once again rejected the refund claim and that was confirmed by the Collector (Appeals). Against this order the appellants have filed Appeal E/3700/89-A. Shri C.L. Sawhney, Consultant appearing for the appellants submitted that appellants are now pressing their claim only in regard to duty paid on the freight element within the period of six months prior to the date of the filing of the refund claim. The lower authorities rejected the claim on the ground that approval orders on the price lists had become final since the appellants did not challenge the same by way of appeal and duty had not been paid under protest. They also indicated that there could not be suo moto claim for refund on the basis of the judgment of the Supreme Court in Bombay Tyre International Ltd. - 1983 (14) E.L.T. 1896 (SC).
2A. Whether the duty had been paid under protest or not has relevance only in regard to the question of limitation and can have no effect on the merits of the claim in view of the provisions of Section 11B of the Central Excise Act, 1944. So also the other contentions cannot stand in view of the aforesaid provisions.
3. Sections 11A and 11B were incorporated in the Act by amending Act 25 of 1978. Section 11A enables the Department to initiate action for recovery of duty not levied or not paid or short levied or short paid or erroneously refunded. Section 11B enables the assessee to claim refund of any duty of excise. Both provisions contain requirement of initiating action within the particular limit of time indicated therein. It is in view of this limitation under Section 11B of the Act that the appellants have given up the claim for refund of duty paid on equalised freight prior to six months prior to the date of filing of the refund claim. Section 11B does not contain any other restriction.
4. The High Court of Calcutta in ITC Ltd. and Anr. v. Union of India and Ors. -1988 (34) E.L.T 473 (Cal.) considered the provisions in Sections 11A and 11B of the Act and indicated that they are substantive provisions and that Section 11A constitutes a complete code for realisation of excise duty in case of short levy or short payment and similarly Section 11B constitutes a complete code containing a substantive and machinery provision for refund of excess duty paid. These twin sections were introduced in the interest of the revenue as well as the assessee and that is why the legislature has not laid down any condition precedent or restriction in the matter of exercise of its power. The High Court held that the view taken by the Tribunal in an earlier decision that where price lists or classification lists had been approved and the approval had become final, there could be no refund claim sustainable under Section 11B, was erroneous, since such a view would result in a disastrous effect and would make the provision completely nugatory and unworkable. We may also refer to the decision of the Supreme Court in M/s. Elson Machines Pvt. Ltd. v. Collector of Central Excise - 1988 (38) E.L.T. 571 (SC) rejecting the contention that since classification list had been approved at an earlier stage, the excise authorities were estopped from taking a different view sub- sequently, since there can be no estoppel against law and the claim was based on the legal effect of provision of law. The Tribunal in Tata Oil Mills Co. Ltd. v. Collector of Central Excise, Pune -1991 (53) E.L.T. 361 (Tribunal) followed the above decisions and overruled the contention that assessee's claim for refund was not sustainable on the ground that duty had been paid on the basis of the approval of the price lists and the approval had become final. We, therefore, hold that the lower authorities were not justified in rejecting the refund claim on the ground of the finality of the approval of the price lists and the payment of duty without protest. The view that there could not be a suo moto claim by an assessee is pointless. Where the assessee has a case that excess duty had been paid, for whatever reason, he would be entitled to take advantage of Section 11B of the Act and he is entitled to succeed if his claim is tenable.
5. The law is well-settled that freight charges, whether equalised or not, from the factory gate to the depot or the buyer's premises cannot be part of the assessable value. The lower authorities did not examine whether the entire freight collected was only in respect of charges from the factory gate to outside places or whether any part of it includes charges for movement within the factory premises. The claim, therefore, has to be rejected.
6. Since the appellants have given up the contention regarding limitation, Appeal E/1498/87-A is dismissed. The orders impugned in Appeal E/3700/89-A are set aside and the matter is remanded to the jurisdictional Assistant Commissioner for fresh decision in accordance with law and in the light of the observations in this order. Since the matter is an old one, the Assistant Commissioner will decide the case within four months from the date of receipt of a copy of this order. The appellants shall place before the Assistant Commissioner all relevant materials on receipt of the refund claim within one month from today. Appeal E/3700/89-A is allowed.