Custom, Excise & Service Tax Tribunal
Suryalaxmi Cotton Mills Ltd vs Commissioner Of Central Excise on 10 December, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI COURT No. II APPEAL No.C/86413/14 (Arising out of Order-in-Appeal No.NGP/EXCUS/000/ APPL/051/13-14 dated 27/03/2014 passed by Commissioner of Central Excise & Customs (Appeals), Nagpur) For approval and signature: Honble Mr. P.R. Chandrasekharan, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial) 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 :Yes 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? ========================================
Suryalaxmi Cotton Mills Ltd., Appellant Vs. Commissioner of Central Excise, Respondent Nagpur Appearance:
Shri.V.M.Doiphode, Advocate for appellant Shri.S. Nathan, Dy. Comm. (AR) for respondent CORAM:
Honble Mr. P.R. Chandrasekharan, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial) Date of Hearing : 10/12/2014 Date of Decision : 10/12/2014 ORDER NO Per: Ramesh Nair
1. The appeal is directed against Order-in-Appeal No.NGP/EXCUS/000/ APPL/051/13-14 dated 27/03/2014 passed by Commissioner of Central Excise & Customs (Appeals), Nagpur.
2. The facts of the case is that the appellant had filed an application for refund of Customs duty of Rs.1,34,34,035/- towards excess paid Customs duty against import of goods vide 28 Bills of Entry. The ground for refund is that the appellant paid CVD in respect of import of goods, namely, Indigo Vat Blue falling under CTH 32041559 under bonafide mistake and without the knowledge about the benefit of exemption Notification No.12/12-CE dated 17/03/2012 (Serial No.133) as amended. The claim of the appellant is that the said imported goods, ie., Indigo Vat Blue is used as dying agent in the manufacture of denim fabrics in their own factory. The appellants claim was that notification provides exemption to Finishing Agents, dye carriers to accelerate the dying or fixing of dye stuffs, printing paste and other products and preparations of any kind used in the same factory for the manufacturer of textile and textile articles falling under Chapter sub heading No.3204 or 3809 of the first Schedule to the CETA, 1985. The adjudicating authority rejected the refund claim of the appellant on the grounds that:
i) The appellant has not challenged the assessment of Bills of Entry. In view of judgement of Priya Blue Industries Ltd. Vs. Commissioner - 2004 (172) ELT 145 refund claim is not maintainable when no appeal is filed against the assessment.
ii) The appellant imported VAT Indigo Vat Blue falling under CTH 32041554 which is used as dying agent in the manufacture of Denim Fabrics. These goods are categorically stated as dye. The dye is not covered under Serial No.133 of Notification No.12/12-CE which reads Finishing Agents, dye carriers to accelerate the dying or fixing of dye stuffs, printing paste and other products and preparations of any kind used in the same factory for the manufacturer of textile and textile articles.
iii) As regards the unjust enrichment, the learned adjudicating authority has given finding that though the Chartered Accountant certificate certifies that no Cenvat Credit was availed but it is silent about the period of such non-availment and also on the same imported goods.
3. Though the learned adjudicating authority has not disputed the Chartered Accountants certificate to the effect that the same was shown as refund receivable under the head advances falling under said group in trial balance. Thus, it was held that there is a case of unjust enrichment. The appellant, aggrieved by the said adjudication order, filed appeal before the Commissioner (Appeals) who in his order dealing with the above three issues held that since the appellant has not appealed against the finally assessed 28 Bills of entry the refund claim would not be maintainable. As regards the eligibility of exemption Notification No.12/2012-CE dated 17/03/2012 (Sl.No.133) relying on the judgement of Honble Supreme Court in the case of CC (Prev), Amritsar Vs. Malwa Industries Ltd. 2009-TIOL-17-SC held that the exemption notification is applicable to other products and preparations of any kind which would cover the goods imported by the appellant. As regards the unjust enrichment, as against the claim of the appellant that the amount of refund has been shown as refundable CVD as appears under the head of advances in books of accounts, the lower appellate authority did not satisfactory because though find the amount have been shown as deposit in the relevant years does not mean that subsequently they have not been apportioned towards expense accounts.
3. The learned Commissioner also contended that unless the appellants are able to show this amount was subsequently apportioned in the expenses account or will not be done so in future, it cannot be said that the incidence of duty has not been passed on. Thus, the appellant failed to establish the burden of duty incidence has not been passed on and in fact borne by them only. On the above findings, learned Commissioner (Appeals) modifying the original order, upheld the rejection of refund claim and rejected the appeal of the appellant. Hence, the appellant is before us.
4. The learned Counsel for the appellant submits that the appellant has bonafidely mistaken in non-claiming the exemption Notification No.12/12-CE dated 17/03/2012 (Serial No.133) due to ignorance about the availability of the said notification. He submits that as per the Commissioner (Appeal)s order the eligibility of the exemption notification is no more under dispute as the same attained finality particularly when the Revenue has not challenged the said findings of the Commissioner (Appeals). It is his submission that when there is no dispute as regards the eligibility of exemption Notification there is no need to challenge the assessment of bills of entry in order to claim the refund. He further submits that in the present case, it is a case of self assessment of bills of entry and there is no assessment order by any proper officer. Therefore, there is no need to challenge the self assessed bills of entry. In the present facts of the case, the ratio of the Honble Apex Court judgement in the case of Priya Blue is not applicable. The learned Counsel has placed reliance on the judgement of the Delhi High Court in the case of CC Goa Vs. SESA Goa Ltd. 2014 (299) ELT 221 Tri-Mum wherein relying on the Delhi High Court judgement in the case of Aman Medical Products Ltd., Vs. CC, Delhi - 2010 (250) ELT 30 it was held that when there is no lis between the assessee and the Revenue at the time of payment of duty, the assessee will not be deprived of refund claim and the question of filing appeal against the order of assessment does not arise.
4.1 As regards the unjust enrichment, it is his submission that the appellant has submitted all the documents and their books of accounts wherein refund amount was clearly shown as receivable in the balance sheet and the same has been certified by the Chartered Accountant. It is his submission that once the amount is shown as receivable in the balance sheet it cannot be inferred that the same has been booked as expenses. He submits that the Commissioner given a finding only on the assumption that the refund amount might have been booked as expenses in the subsequent year and thus it is not proved that the incidence of such amount has not been passed on. He stated that refund amount is shown as receivable even till date in the books of accounts and not booked as expenses. Therefore, the incidence of said amount has not been passed on to any other person. Accordingly, the unjust enrichment is not applicable in the present case.
5. The learned Deputy Commissioner (AR) appearing for the Revenue reiterates the findings of the impugned order.
6. We have carefully considered the submissions made by both the sides and perused the records.
6.1 The lower adjudicating authority had rejected the same on three points. Firstly, the appellant has not challenged the assessment of bill of entry. Secondly, the exemption Notification No.12/12-CE dated 17/03/2013 is not admissible to the appellant. Thirdly, the claim is hit by unjust enrichment. However, the learned Commissioner (Appeal) in the impugned order upheld the order on two counts, i.e. non-challenging the assessment of bill of entry and second unjust enrichment. The learned Commissioner has categorically held that the appellant is entitled for the exemption Notification No.12/12-CE. Since the eligibility of the Notification No.12/12-CE has been held in favour of the appellant and the Revenue has not challenged the same, the impugned order to that extent attained finality. As regards the issue whether the appellant is required to challenge the assessment of bill of entry in order to claim the refund of excess paid duty, we are of the view that there is no dispute on the eligibility of the exemption notification which holds the position that there is no lis between the assessee and the Revenue. The appellant is therefore, not required to challenge the assessment of bill of entry for claiming the refund of excess paid duty. As regards the reliance placed by the Revenue that assessment of bill of entry is compulsory in view of the Apex Court judgement in the case of Priya Blue Industries (supra). We have carefully observed that the judgement was pertaining to the previous period when the provisions of claim for refund of duty under Section 27 was worded as under:-
Section 27. Claim for refund of duty. (1) Any person claiming refund of any duty
(i) paid by him in pursuance of an order of assessment; or
(ii) borne by him, may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Customs or Deputy Commissioner of Customs 6.2 From the above provision, it is clear that refund was admissible in respect of duty which was paid in pursuance of the order of assessment.
6.3 If there is an order of assessment by a proper officer, it is subject to challenge by way of appeal. The new Section 27 is worded as under:-
Section 27. Claim for refund of duty. (1) Any person claiming refund of any duty or interest
(i) paid by him ; or
(ii) borne by him, may make an application in such form and manner as may be prescribed for such refund to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, before the expiry of one year, from the date of payment of such duty or interest.
6.4 On comparing the provisions of present and past it transpires that in the old provision, the refund was to be filed in pursuance of the order of the assessment and such order is subject to challenge in further appeal proceeding. In such cases the refund will accrue only after challenge the order of assessment. However, as per the present provision of Section 27, if the duty is paid by a person under self assessment refund can be filed without filing any appeal, because in the present provision if the self assessment is done then there is no order of assessment by any proper officer. So in view of the above, in the case where duty was paid after the amended Section 27 i.e., after 08/04/2011 where a person has paid duty on self assessment, the refund is maintainable. The judgement of Apex Court in the case of Priya Blue Industries Ltd. is in context of old Section 27 where the duty was to be paid in pursuance of the order of assessment. More over, in the case of Aman Medical Products Ltd., supra, the Honble Delhi High Court distinguishing the judgement of Honble Apex Court in the case of Priya Blue held as under:
3.?Before we proceed to decide the issue, it would be necessary to reproduce the relevant part of the relevant provision, namely, Section 27 of the Customs Act, 1962 which is as under :
27. Claim for refund of duty. - (1) Any person claiming refund of any duty-
(i) paid by him in pursuance of an order of assessment; or
(ii) borne by him, may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Customs or Deputy Commissioner of Customs -
(a) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, before the expiry of one year.
(b) in any other case, before the expiry of six months, from the date of payment of duty and interest, if any, paid on such duty in such form and manner as may be specified in the regulations made in this behalf and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 28C) as the applicant may furnish to establish that the amount of duty and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person:
Provided that where an application for refund has been made before the commencement of the Central Excise and Customs Laws (Amendment) Act, 1991, such application shall be deemed with in accordance with the provisions of sub-section (2).
4.?If therefore we refer to language of Section 27, it is more than clear that the duty which is paid is not necessarily pursuant to an order of assessment but can also be borne by him. Clauses (i) and (ii) of sub-section (1) of Section 27 are clearly in the alternative as the expression or is found in between clauses (i) and (ii). The object of Section 27(i)(ii) is to cover those classes of case where the duty is paid by a person without an order of assessment, i.e. in a case like the present where the assessee pays the duty in ignorance of a notification which allows him payment of concessional rate of duty merely after filing a Bill of Entry. In fact, such a case is the present case in which there is no assessment order for being challenged in the appeal which is passed under Section 27(1)(i) of the Act because there is no contest or lis and hence no adversarial assessment order.
5.?The Tribunal has referred to the cases of CCE, Kanpur v. Flock (India) Pvt. Ltd. [2000 (120) E.L.T. 285] and Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive), 2004 (172) E.L.T. 145 (S.C.). In both these cases, referred to by the Tribunal there was an assessment order which was passed and consequently it was held that where an adjudicating authority passed an order which is appealable and the party did not chose to exercise the statutory right of appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that adjudicating authority had committed an error in passing his order. These judgments will therefore not apply when there is no assessment order on dispute/contest, like as is in the facts of the present case.
6.?We, therefore, answer the question framed by holding that the refund claim of the appellant was maintainable under Section 27 of the Customs Act and the non-filing of the appeal against the assessed bill of entry does not deprive the appellant to file its claim for refund under Section 27 of the Customs Act, 1962 and which claim will fall under clause (ii) of sub-section (1) of Section 27.
7.?We accordingly set aside the impugned order dated 3-4-2008 of the CESTAT [2008 (228) E.L.T. 593 (Tri.-Del.)] and uphold the order of the Commissioner of Customs (Appeals) dated 28-1-2005 and remand of the matter to the original authority viz Deputy Commissioner of Customs (Refund) to examine the merits of the matter in accordance with law after providing due opportunity to the appellant.
7. From the above judgement of Honble Delhi High Court, if the duty is paid and borne by the assessee, refund is admissible without challenging the bill of entry. In the present case also the excess duty was paid and borne by the appellant.
8. In view of the above legal position, we are of the view that if the Customs duty was paid in excess under a self assessment of bill of entry and borne by the appellant for claiming of refund of excess paid duty, the appellant was not required to challenge the assessment of bill of entry.
9. As regards the unjust enrichment, it is the submission of learned Counsel for the appellant that they have filed all the documents such as, balance sheet, etc. from which it can be established that the amount of refund was shown as receivable in the balance sheet and therefore, it is an evidence that incidence of Customs duty paid for which the refund is sought for, has not been passed on to any other person. However, this factual aspect has to be verified by the adjudicating authority.
10. In view of our above discussion, the appellant is entitled for refund claim subject to the test of unjust enrichment. We, therefore, remand the matter to the adjudicating authority to pass a fresh order after ascertaining that the incidence of amount of refund has not been passed on to any other person on proper verification of documents submitted by the appellant. Needless to say that the adjudicating authority shall grant to the appellant, sufficient opportunity of personal hearing and for filing of additional documents, if any, for denovo adjudication of the case. The appeal is disposed of in the above terms by way of remand.
(Operative part of the order pronounced in Court) (P.R. Chandrasekharan) Member (Technical) (Ramesh Nair) Member (Judicial) pj 1 5