Custom, Excise & Service Tax Tribunal
Ultra Tech Cement Ltd vs Commissioner Of Central Tax, Bangalore ... on 22 March, 2024
ST/634/2010
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
1st Floor, WTC Building, FKCCI Complex, K. G. Road,
BANGLORE-560009
Regional Bench COURT-2
Excise Appeal No. 20535 of 2021
[Arising out of the Order-in-Appeal No.152/2020-21 CT dated
15.02.2021 passed by the Commissioner of Central Tax
(Appeals-II), Bangalore.]
ULTRA TECH CEMENT LTD., ....Appellant
Unit: Birla Super Bulk Terminal
Village, Veerappura,
Doddaballapur -561 203,
Karnataka.
Vs.
COMMISSIONER OF CENTRAL TAX ....Respondent
Bangalore NORTH No.59, HMT Bhawan, Ground Floor, Bellary Road, Bangalore, Karnataka -560 032 Appearance:
Mr. Sayeed Peeran, Advocate ....For Appellant Mr. Rajesh Shastry, AR .... For Respondent CORAM:
Hon'ble Mr. P.A. Augustian, Member (Judicial) Date of Hearing: 01.01.2024 Date of Decision: 22.03.2024 FINAL ORDER No.__20200_of 2024 The Appellant is manufacturing Cement. Appellant was paying central excise duty on the final product and were availing Page 1 of 15 ST/634/2010 CENVAT credit of duty paid on steel and cement used in construction of silos and packing plants. Appellant had availed similar credit of Rs. 41,51,499/-during July 2009 to July 2010. Alleging that appellant is claiming CENVAT credit wrongly, proceedings were initiated and during investigation, appellant had deposited an amount of Rs. 26,38,300/- including Rs.24,27,751/- being credit and interest of Rs. 2,10,549/-. On competition of the investigation, a SCN was issued on 06.08.2010 proposing to deny above said central excise credit alleging that it was incorrectly taken. Appellant submitted detailed reply and adjudication authority confirmed the entire demand as proposed in the SCN. Aggrieved by said order, appellant filed appeal before the Commissioner Appeals and Appellate authority also rejected the appeal. Thereafter appellant approached this Tribunal with a stay application to recover the demand of duty. This Tribunal vide order dated 20.11.2014 stayed recovery of the amount on the ground that the amount paid during investigation is sufficient to cover the pre-deposit for admitting the appeal. Thereafter vide Final Order No. 20808/2017 dated 24.11.2017, this Tribunal held that the credit of Cement and Steel items used in the construction taken as correctly admissible. After disposal of the appeal, appellant has not submitted any refund application and considering the amount paid during investigation as pre-deposit, appellant was expecting refund. Since there was no refund of amount paid during investigation, appellant vide letter dated 15.03.2019 reminded the respondent for refund of due amount Page 2 of 15 ST/634/2010 with interest. However a SCN was issued proposing to reject the refund claim filed by the appellant on the ground that as per Section 11B(5))ec) of Central Excise Act, 1944, appellant is legally obliged to submit a refund application within 1 year from the relevant date. In response to SCN, appellant submitted that refund sought by the appellant is not relevant to any payment of duty and it was an amount paid during investigation and as per the proviso of Section 11B, limitation of one year shall not be applied on duty paid in protest. But without considering the above submission, adjudicating authority rejected the refund claim of the appellant. Aggrieved by said order, appeal was filed before Commissioner (Appeals) and Commissioner (Appeals) upheld the Order-in-Original rejecting refund claim. Aggrieved by said order present appeal is filed.
2. When matter came up for final hearing, Ld. Counsel for the appellant submits that appellant has not paid the amount voluntarily to Excise duty and it was paid only due to compulsion of the investigating officer. Thus it has to be treated as pre- deposit and appellant is not liable to submit refund application as per Section 11B of the Central Excuse Act, 1944. In support of the above, the appellant relied on large number of decisions including judgment of the Hon'ble High Court of Karnataka in the matter of Suretex Prophylactics(India) Private Limited In W.P (c) No 2444/2022 (t-CUS) wherein the Hon'ble High Court held that:- Page 3 of 15
ST/634/2010
18. Learned Senior counsel for the petitioner is also correct in his submission that in the case of Central Excise Vs. KVR Construction - 2012(50) VST 469, while construing section 11B of the Central Excise Act, the Hon'ble Division Bench of this court held as under:-
33. We may also refer hereon a Division Bench judgment of Karnataka High Court in Commissioner of Central Excise Vs KVR Construction (2012 (50) VST 459), wherein construing Section 11B, Court said that it refer to claim for refund of duty of excise only and does not refers to any other amount collected without authority of law. That was a case of Service tax and Court said as under:
"Though under Finance Act, 1994 such service tax was payable by virtue of notification, they were not liable to pay as there was exemption to pay such tax because of the nature of the institution for which they have made construction and rendered services. In other words, if the respondent had not paid those amounts, the authority could not have demanded the petitioner to make such payment. In other words, authority lacked authority to levy and collect such service tax. In case, the department were to demand such payments, petitioner could have challenged it as unconstitutional and without authority of law. If we look at the conserve, we find mere payment of Page 4 of 15 ST/634/2010 amount would not be authorize the department to regularize such payment. When once the department had no authority to demand service tax from the respondent because of its circular dated 17.09.2004, the payment made by the respondent company would not partake the character of "Service Tax" liable to be paid by them. Therefore, mere payment made by the respondent will neither validate the nature of payment nor the nature of transaction. In other words, mere payment of amount would not make it a "service tax" payable by them. When once there is a lack of authority to demand "service Tax" from the respondent company, the department lacks authority to levy and collect such amount. Therefore, it would go beyond their purview to collect such amount. When once there is lack of authority to collect such service tax by the appellant, it would not give them the authority to retain the amount paid by the petitioner, which was initially not payable by them. Therefore, mere nomenclature will not be an embargo on the right of the petitioner to demand refund of payment made by them under mistaken notion"
3. The aforesaid judgment of the Hon'ble Division Bench has been followed by the Allahabad High Court in the case of Page 5 of 15 ST/634/2010 EBIZ COM Pvt Ltd Vs Commissioner of Central Excise, Customs & Service Tax & others (2016 (9) TMI 1405, in order to come to the conclusion that any voluntary payment made by the petitioner is in the nature of pre-deposit which was liable to be refunded back to the petitioner. As stated supra, in the facts of the instant case also that the respondents as regards the recovery of aforesaid sum of INR 1.5 crore from the petitioner on 15.10.2019 is under protest as stated by the respondents themselves, there was no order of adjudication nor any other proceedings or order which initiated by the respondents, which entitled them to recover the said amount from the petitioner in the absence of any order of adjudication or any other material in this regard, the respondents did not have recover the said amount from the petitioner.
21. At any rate, a perusal of Section 27 of the Customs Act, will also indicate that the same would apply only pursuant to an order in respect of customs duty paid by the petitioner and not when the order of tax/duty has to be collected/recovered from the petitioner, which is in the nature of pre-deposit. Under the circumstances, even this contention urged by the respondents cannot be accepted.
3. Ld Counsel also drawn our attention to the judgment of Hon'ble Supreme Court in the matter of M/s Mafatlal Industries Ltd Vs UOI (reported in 1997 (89) E.L.T 247 (SC) wherein the Hon'ble Supreme Court held that :
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ST/634/2010
82. .......All claims for refund, arising in whatever situations (except where the provision under which the duty is levied is declared as unconstitutional), has necessarily to be filed, considered and disposed of only under and in accordance with the relevant provisions relating to refund, as they obtained from time to time. We see no unreasonableness in saying so.
83. .... We think that the entire edifice of this argument is erected upon an incomplete reading of Section 11B. The second proviso to Section 11B (as amended in 1991) expressly provides that "the limitation of six months shall not apply where any duty has been paid under protest".
Now, where a person proposes to contest his liability by way of appeal, revision or in the higher courts, he would naturally pay the duty, whenever he does, under protest. It is difficult to imagine that a manufacturer would pay the duty without protest even when he contests the levy of duty, its rate, classification or any other aspect. If one reads the second proviso to sub-section (1) of Section 11B along with the definition of "relevant date", there is no room for any apprehension of the kind expressed by the learned Counsel.
4. Ld. Counsel for the appellant also draw my attention to the stay order issued by this Tribunal vide Misc order No. 23105/2014 dated 20.11.2014 held that appellant has already deposited entire Page 7 of 15 ST/634/2010 amount of Cenvat credit with interest treating it as sufficient requirement of pre-deposit of balance dues is waived and stay against recovery is granted during pendency of the appeal. Further submits that considering the law laid down by the Apex Court in the matter of M/s Mafatlal Industries Ltd (supra), refund application is not necessary and once appellant prefer to challenge the demand of duty, it is to be treated as deemed under protest. Ld. Counsel for the appellant also draw our attention to the relevant portion under proviso of Section 11B of the Central Excise Act, 1944 wherein it is stated that the limitation of 1 year shall not apply if and duty and interest paid under protest. Ld. Counsel also draw our attention to the Circular No.984/8/2014-CX dated 16.09.2014.
5. Ld Counsel also draw my attention to the judgment of the Tribunal in the matter of M/s GS Radiators Ltd Vs Commissioner of Central Excise, Ludhiana (reported in 2004 (10) TMI-158-CESTAT, New Delhi held that:-
3. On a careful consideration of the submissions made by both the sides. I find that in this case the question of limitation will not apply as provided under Section 11B of the Central Excise Act as the amount paid by the appellants on the decision of the department was being contested by them from the adjudicating stage till they won the appeal before the Tribunal. Therefore such payment will be considered as payment under protest. Tribunal under its Page 8 of 15 ST/634/2010 Final Order had given direction to give consequential relief to the appellants which should have been given by the department. But instead of giving then refund. They rejected it on time-bar which is not correct. In view of the above, I find that payment made by the appellants has to be considered as payment under protest and the refund should be allowed to them if otherwise in order. The appeal is , therefore allowed.
6. Ld. Counsel also relied in the matter of M/s Nissan Copper Ltd (reported in 2014- VIL-924-CESTAT-AHM-CE) and Commissioner of C. Ex & Service Tax, Bhavnagar Vs M/s HK Dave Ltd (reported in 2015 (38) S.T.R 77 (Tr.Ahmd)
4. Heard both sides and perused the case records. Brief facts of the case are that appellant paid certain amount during the course of investigation and contested the issue on merits in the appeal proceedings. The amounts paid by the present Respondent were considered sufficient by CESTAT in an appeal filed by Respondent for satisfying the deposit requirement under Section 35F of the Central Excise Act, 1944. Respondents won the case on merits and sought refund of the amount paid. it is the case of Revenue that as refund sought was after the period of limitation as per Section 11B of the Central Excise Act, 1944, the same should be consider as time barred and Page 9 of 15 ST/634/2010 that first appellate authority has wrongly allowed the appeal of the Respondent. It is observed from the case records that the amounts were paid during the investigation and issue was agitated by the appellant on merits. In the appeal proceedings, Respondent won the case on merits and filed refund claim. Action of the Respondent be contesting the issue on merits itself constitute as case of 'deemed protest' and on time limit will be applicable even as per the second proviso to Section 11B of the Central Excise Act, 1944. However, the amounts were not paid as duty as the time of providing of services but was paid only when the investigation was initiated by the Revenue. In the facts and circumstances the amount paid will be ca case of "deposit" and will not be a situation of payment of duty when on merits. Respondent got a favorable order from the appellate channel. The amount so paid was not recovered on the invoices and department has also not rejected the refund claim on unjust enrichment. Accordingly, it is held that amounts paid by the Respondent was a "Deposit" and not payment of duty when on merits the case was decided in favour of the Respondent.
4.1 Once it is held that the amount paid by the Respondent is a "Deposit" the law laid down by CESTAT, Bangalore in the case of Kunj Behan Dye Page 10 of 15 ST/634/2010 Chem Private Ltd Vs CCE (Appeals-II), Bangalore (supra), relying upon the Supreme Court judgment and the other case laws, will be squarely applicable to the facts of the present case.
7. Ld. Counsel also drawn my attention to the judgment of Hon'ble Supreme Court in the matter of M/s Shree Ram Food Industries Vs Union of India (reported in 2003 (152) E.LT 285 (Guj)
12. We have examined the claim of the petitioner in the light of the aforesaid provisions contained in Section 11B of the Act. We have already made it clear hereinabove that the payment of Rs. 21,09,893/- made by the petitioner on 21.08.1995, was not the voluntary payment and it was made pursuant to the demand made by the respondent authorities towards the central excise duty for DTA sales and threats were administered for extracting the said payment from the petitioner, and hence for all purposes said payment can be treated as the payment under protest. The petitioner's case, therefore squarely falls within the second proviso to Section 11B(1) of the Act which says that the limitation of six months shall not apply where any duty has been paid under protest. The petitioner therefore moved an application for refund of Rs.5,40,847/- on 23/02/2000 pursuant to the order Page 11 of 15 ST/634/2010 passed by the respondent No.2 on 18.04.2000 confirming the demand of Rs. 15,69,046/- and order for refund of balance amount of Rs. 5,40,847/- being excess payment. In this context, the following observations made by the Hon'ble Supreme Court in the case if Mafatlal Industries Ltd Vs. Union of India (supra) are very pertinent.
8. The Ld. DR reiterated the finding of the adjudicating authority and appellate authority. Ld. DR submits that the refund claim was filed on 14.03.2019 which is beyond the relevant dated prescribed under Section 11B (5)(ec) of the Central Excise Act, 1944. Ld DR relied on the judgment of the Hon'ble Gujrat High Court in the matter of M/s Ajni Interiors Vs Union of India & one another (reported in 2019 (9) TMI 529- GUJRAT)
13. Considering the Section itself, it is clear that a person claiming refund of any excise duty and interest, has to make an application for refund of such duty and interest to the authority enumerated therein that too, before expiry of one year from the relevant date, in such form and manner as may be prescribed. Therefore, a claim for refund has to be filed in the prescribed form within one year from the relevant date. Again relevant date is also defined in the Explanation (B) (ec) considering the explanation with regard to the relevant date, it is the date on which the Tribunal allowed the appeal preferred by the petitioner Page 12 of 15 ST/634/2010 i.e 07.08.2007. Thus within one year from that date, the petitioner had to prefer claim for refund of Excise Duty in a prescribed form.
14. Considering the arguments advanced by learned advocates of the parties and scanning the materials on record, it is clear that the case of the petitioner that payment towards Excise Duty is in the form of pre- deposit is misconceived. Considering the annexures annexed with the petition, i.e Challans for deposit of Central Excise Duty in Form NO.TR-6, that too, without protest is the payment towards the Excise duty and can never be considered as pe-deposit. If any payment is made as a pre-condition for exercising the statutory right it can be termed as pre-deposit. However it cannot be equated with voluntary deposit of Excise Duty paid even during the course of investigation and prior to show cause notice or adjudication to assert that it is pre-deposit.
9. The Ld. DR also relied on the judgment of M/s AAR AAR Metal Refinery Vs Commissioner of GST & Central Excise, Chennai (reported in 2021 (3) TMI-884- CESTAT Chennai 6.1 Mandatory condition prescribed at (ec) under Explanation (B) to Section 11B to stress that the statute itself has granted one year time to prefer application for refund and hence any further delay cannot be entertained. Ld Department representative Page 13 of 15 ST/634/2010 also contended that the refund claim in the case on hand is not in the normal course but claimed as a consequence of an Order of an appellate forum and hence, the case of the appellant clearly falls within the ambit of relevant date as defined in (ec) under Explanation (B) to Section 11B of Central Excise Act, 1944.
6.2 He also argued that the relevant date as defined in (ec) ibid, clearly carves out an exception from a claim for refund in the normal course, i.e where refund is not claimed as a consequence of any Act specified thereunder.
10. The Ld DR further submits that there is no such order issued by Tribunal considering the amount deposited by the appellant as pre-deposit. The claim of refund is strictly governed by Section 11B of the Act and the impugned order is sustainable.
11. Ld. Counsel appearing for the appellant submitted an additional written submission wherein it is held that the judgment of Hon'ble High Court relied by respondent in the matter of M/s Ajni Enterprises and M/s AAR Metal Refinery (supra) are not sustainable considering the facts and circumstances of the present case. In the matter of M/s Ajni Enterprises, there is no such order issued by Tribunal considering the amount deposited by the appellant as pre-deposit as held by this Tribunal while considering the stay petition submitted by the appellant. Further submitted Page 14 of 15 ST/634/2010 that the judgment of the Hon'ble High Court in the matter of M/s Ajni Enterprises was distinguished by Hon'ble High Court of Madras in the case of M/s Daily Tamthi (reported in 2021 (376) E.L.T 515 (Mad)) wherein it has been clearly held that the decision of the Gujrat High court is contradictory to the law laid down in UOI Vs Suvidha (1997 (94) E.L.T A159 (SC). Similarly, Tribunal in the matter of M/s Industrial Equipment Co Ltd (2019 (TMI) also considered the issue and following the following view taken by Hon'ble High court of Karnataka in the matter of KVR Construction(supra), distinguished the judgement of Ajni interiors (supra) held that refund claim is not barred by limitation.
12. Considering the above facts, the provisions of Section 11B(5) (ec) of Central Excise Act, 1944 will apply only in respect of excise duty paid by the appellant and not applicable for refund of Rs. 26,38,300/- including Rs.24,27,751/- being credit and interest of Rs. 2,10,549/- deposited by appellant during investigation to cover the alleged wrong claim of CENVAT Credit which was held unsustainable by this Tribunal in appeal.
13. Hence appeal is allowed with consequential relief, if any in accordance with law.
(Order pronounced in open court on 22.03.2024.) (P.A.Augustian) Member (Judicial) Page 15 of 15