Custom, Excise & Service Tax Tribunal
Jindal Stainless Ltd vs Commissioner Of Customs And Service Tax ... on 26 May, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CIRCUIT BENCH AT HYDERABAD Appeal(s) Involved: C/19/2008-DB [Arising out of Order-in-Appeal No. 71-2007 dated 06/10/2007 passed by CCE&C(Appeals) Visakhapatnam] For approval and signature: HON'BLE SHRI JUSTICE G. RAGHURAM, PRESIDENT HON'BLE SHRI 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? 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 of the Order? 4 Whether Order is to be circulated to the Departmental authorities? JINDAL STAINLESS LTD (FORMERLY KNOWN AS M/S JINDAL STRIPS LTD) JINDAL NAGAR, KOTHAVALASA, VIZIANAGARAM Appellant(s) Versus Commissioner of Customs And Service Tax VISAKHAPATNAM-CUS NULL CENTRAL EXCISE BUILDING... PORT AREA, VISAKHAPATNAM, - 530035 ANDHRA PRADESH Respondent(s)
Appearance:
Shri Karan Talwar, Advocate For the Appellant Shri G. Shiril Saraj, Authorised Representative For the Respondent Date of Hearing: 26/05/2015 Date of Decision: 26/05/2015 CORAM:
HON'BLE SHRI JUSTICE G. RAGHURAM, PRESIDENT HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER Final Order No. 21448 / 2015 Per : B.S.V. MURTHY The appellants had imported gas coke under 8 Bills of Entry which were assessed provisionally. Appellants had paid anti dumping duty under protest. After finalization of Bills of Entry, it was found that appellants had paid excess duty of Rs.2,36,99,324/- on account of anti dumping duty. The refund was sanctioned but credited to the Consumer Welfare Fund of India in the absence of proof that the burden of duty has not been passed on to the buyer.
2. After hearing both the sides, we find that the issue involved is only whether the rejection of refund claim on the ground of unjust enrichment of the amount becoming due as refund on finalization of provisional assessment is correct. The appellants relied upon the decision of the Honble High Court of Gujarat in the case of CC Vs. Hindalco Industries Ltd. [2008(231) ELT 36 (Guj.)] wherein it was held that provisions relating to unjust enrichment would not be applicable for Bills of Entry provisionally assessed prior to 13/07/2006, the date on which Section 18 of Customs Act, 1962 was amended. In this case, the Bills of Entry were provisionally assessed during the period from June 2000 to August 2004. It was also submitted that this ratio has been followed by the Larger Bench of this Tribunal in the case of CC, Kandla Vs. Hindustan Zinc Ltd. [2009(235) ELT 629 (Tri. LB)]. Further it was also submitted that similar issue which had arisen in the case of finalized provisional assessments under Rule 9B of Central Excise Rules also a similar decision was available and Honble Supreme Court in the case of CCE, Chennai Vs. TVS Suzuki Ltd. [2003(156) ELT 161 (SC)], had taken a view in favour of the assessee.
3. We have considered the submissions. Section 18 of Customs Act as it existed prior to the amendment on 13/07/2006 and thereafter is reproduced below(relevant provisions only):-
Section 18. Provisional assessment of duty (1) ..
(2) When the duty leviable on such goods is assessed finally in accordance with the provisions of this Act, then
(a) in the case of goods cleared for home consumption or exportation, the amount paid shall be adjusted against the duty finally assessed and if the amount so paid falls short of, or is in excess of the duty finally assessed, the importer or the exporter of the goods shall pay the deficiency or be entitled to a refund, as the case may be;
(b) in the case of warehoused goods, the proper officer may, where the duty finally assessed is in excess of the duty provisionally assessed, require the importer to execute a bond, binding himself in a sum equal to twice the amount of the excess duty.
Section 18. Provisional assessment of duty (1) .
(2) When the duty leviable on such goods is assessed finally in accordance with the provisions of this Act, then
(a) in the case of goods cleared for home consumption or exportation, the amount paid shall be adjusted against the duty finally assessed and if the amount so paid falls short of, or is in excess of the duty finally assessed, the importer or the exporter of the goods shall pay the deficiency or be entitled to a refund, as the case may be;
(b) ..
(3) .
(4) Subject the sub-section (5), if any refundable amount referred to in clause (a) of sub-section (2) is not refunded under that sub-section within three months from the date of assessment of duty finally, there shall be paid an interest on such unrefunded amount at such rate fixed by the Central Government under Section 27A till the date of refund of such amount.
(5) The amount of duty refundable under sub-section (2) and the interest under sub-section (4), if any, shall, instead of being credited to the Fund, be paid to the importer or the exporter, as the case may be, if such amount is relatable to-
(a).
(b)..
(e) The provisions of reproduced sections would clearly show that prior to amendment on 13/07/2006, there was no provision for crediting the refund amount to the Consumer Welfare Fund.
4. The decision of the Honble High Court of Gujarat in the case of Hindalco Industries Ltd. (supra) is squarely applicable to the facts of this case. In this decision, Honble High Court of Gujarat had considered the issue in great detail and had also considered the decision of the Honble High Court of Bombay in the case of Bussa Overseas and Properties Pvt. Ltd. Vs. UOI [2004(164) ELT A177 (SC)] and had relied upon the decision in the case of TVS Suzuki Ltd. (supra).
5. Learned AR had relied upon the decision in the case of Bussa Overseas and Properties Pvt. Ltd. which we have already seen that that was considered by the Honble High Court of Gujarat. He also place reliance upon the decision of the Honble Supreme Court in the case of Sahakari Khand Udyog Mandal Ltd. Vs. CCE&C [2005(181) ELT 328 (SC)] to submit that according to Honble Supreme Court, the doctrine of unjust enrichment is based on equity and therefore irrespective of applicability of Section 11B of Central Excise Act, 1944, doctrine can be invoked to deny benefit to which a person is not otherwise entitled. On the one hand it has to be appreciated that the decisions of the Honble High Court relied upon by the assessee are on the very same issue and are applicable in terms of law. Whereas the decision in the case of Sahakari Khand Udyog Mandal ltd. (supra) was rendered in relation to rebate on excess production of sugar. Therefore it cannot be said that the legal provisions are pari materia. Moreover the observations of the Honble Supreme Court in paragraph 48 & 49 are relevant and are reproduced below:-
48.?From the above discussion, it is clear that the doctrine of unjust enrichment is based on equity and has been accepted and applied in several cases. In our opinion, therefore, irrespective of applicability of Section 11B of the Act, the doctrine can be invoked to deny the benefit to which a person is not otherwise entitled. Section 11B of the Act or similar provision merely gives legislative recognition to this doctrine. That, however, does not mean that in absence of statutory provision, a person can claim or retain undue benefit. Before claiming a relief of refund, it is necessary for the petitioner/appellant to show that he has paid the amount for which relief is sought, he has not passed on the burden on consumers and if such relief is not granted, he would suffer loss.
49.?In the present case, not only no such case has been made out by the appellant-Mandal, the position is to the contrary. All the authorities below have expressly recorded a finding that the appellant-Mandal has recovered the amount from consumers and as such excise duty is passed on to consumers/customers. In view of specific finding, in our opinion, the conclusion is inescapable that the appellant-Mandal is not entitled to claim any amount. Allowing exemption or refund of amount would result in unjust enrichment by the appellant which cannot be permitted. In our opinion, therefore, even on that count, orders passed by the authorities and refusal to grant benefit cannot be held arbitrary, unreasonable or inequitable. The said ground also, therefore, has to be rejected.
6. From the reproduced paragraphs, it can be seen that Honble Supreme Court held that the unjust enrichment doctrine can be invoked to deny the benefit to which a person is not otherwise entitled and further it was also held that this does not mean that in the absence of statutory provisions, a person can claim or retain undue benefit. In this case, there is a clear statutory provision which provides that he is entitled to refund. Further the concept of unjust enrichment was incorporated only on 13/07/2006. In the absence of any clear legislative intention emerging from the amendment that such an amendment would have retrospective effect and also in view of the fact that in exactly similar circumstances Honble Supreme Court has already taken a view, it would be proper to follow the decisions in favour of the assessee and further the decision of the Honble Supreme Court also appear to take a view that only if the statute denies the benefit or the statute does not provide for the benefit, the unjust enrichment can be invoked. Further it has to be noted that in para 49, the Honble Supreme Court took note of the fact that in that case there was clear finding that the appellants had recovered the amounts from consumers.
7. In view of the above discussion, we find that the rejection of refund claim on the ground of unjust enrichment is not correct. Accordingly, the appeal is allowed with consequential relief to the appellant.
(Operative part of this order pronounced on conclusion of the hearing) JUSTICE G. RAGHURAM PRESIDENT B.S.V.MURTHY TECHNICAL MEMBER Raja 7