Custom, Excise & Service Tax Tribunal
Cce, Bhopal vs M/S. Presvels Pvt.Ltd on 23 April, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-DB
COURT-III
Excise Appeal No.E/3000-3001/2005-EX[DB]
[Arising out of Order-in-Appeal No.816-817-CE/BPL/2004 dated 27.12.2004 passed Commissioner (Appeals-II) Bhopal (MP)]
For approval and signature:
HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)
HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
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?
__________________________________________________
CCE, Bhopal Appellant
Vs.
M/s. Presvels Pvt.Ltd. Respondent
Present for the Appellant : Shri.M.SA.Negi, D.R.
Present for the Respondent: Shri.Z.U. Alvi, Advocate
Coram:HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)
HONBLE MR.S.K. MOHANTY, MEMBER (JUDICIAL)
Date of Hearing/Decision: 23/04/2015
FINAL ORDER NO. 51579-51580/2015
PER: RAKESH KUMAR
The facts giving rise to filing of these appeals by the Revenue are in brief as under:-
1.1 The respondents are manufacturers of LPG cylinders which were being cleared by various oil marketing companies. During July, 1999 to October 2000 period and from 10.04.2001 to 21.05.2001 period the respondent cleared LPG cylinders to HPCL against contract where the price mentioned was provisional price which was finalized subsequently. However, neither the respondent applied for provisional assessment nor any orders in this regard were passed under Rule 9 B of the erstwhile Central Excise Rules, 1744. This was so, as earlier, sometime during 1995 the Assistant Commissioner had ordered provisional assessment which was finalized vide order dated 13.08.1998 on the respondents plea that final prices are available within a period of 3 to 4 months and the respondent had given an undertaking in this regard. In this regard the Assistant Commissioner in his order dated 13.08.1998 finalizing the provisional assessment for the period from April 1997 to March, 1998 had observed as under:-
It is seen that M/s.Presvels Pvt. Ltd. are enagaged in the manufacture of LPG cylinders; entire supply of which is made to Government owned oil companies. Final prices are available within a period of 3 to 4 months. The party has also given an undertaking, therefore Government interest remains safeguarded even without recourse to provisional assessment under Rule 9 B. Assessee requested to withdraw provisional assessment order is hereby accepted. Assessee is directed to submit final prices within a period of 3 to 4 months and ensure timely payment of differential duty.
In view of the above assessment made provisional vide order No. v (73) 17-5/93/CX- 2 883 dated 08.03.1995 is hereby made final, The Assistant Commissioner as per above order withdrew the provisional assessment order dated 08.03.1995 and treated the assessment for 1997-98 as final on the understanding that the final prices would be available within 3 to 4 months from the date of supply and that they will pay the differential duty immediately on the final prices being available. However, it appears that during July, 1999 to October, 2000 period and subsequently during April to 21.05.2001 period, though the supplies of LPG cylinders to HPCL were made without any provisional assessment order and without any formalities followed for provisional assessment, the final prices were not fixed within 3 to 4 months and as such the differential duty was not paid on that basis. Subsequently, the final prices were available and which were lower than the provisional prices on which the duty had been paid. The respondent, therefore, filed 2 refund claims. The refund claim for the period from July 1999 to October 2000 was filed on 28.08.2001 and the refund claim for the period from 10.04.2001 to 21.05.2001 was filed on 16.04.2002. In both the cases, the Assistant Commissioner by two separate orders rejected the quantum of refund claim which was beyond the limitation period of one year from the relevant date. Accordingly, in respect of the first refund claim for the period from July 1999 to October 2000, the refund claim of Rs.12,67,122/- was rejected and in respect of the second refund claim for the period from 10.04.2001 to 21.05.2001, the claim of Rs.3,93,783/- was rejected as time barred.
1.2 The respondent filed appeals to Commissioner (Appeals) against these orders and the Commissioner (Appeals) vide Order in appeal dated 31.03.2004, set aside the Assistant Commissioners order and allowed the appeal. The Commissioner (Appeals) in his order held that the refund claim are neither hit by limitation nor are hit by the bar of unjust-enrichment.
1.3 The Revenue filed an appeal No.E/3396/2004-NB against the above order of the Commissioner (Appeals) which was disposed of by the Tribunal vide final order No.861/2004 dated 08.10.2004 by which the Tribunal remanded the matter to the Commissioner (Appeals) for denovo decision, keeping in view its observations in the stay order. The Tribunal in para 4 of its order dated 08.10.2004 had observed that:-
We find from the record that the ld. Commissioner (Appeals) has decided the matter by presuming that the assessment of the respondents was provisional. But we do not find any specific order passed by any competent authority under Rule 9 B of the Rules in that regard. The principle of unjust enrichment has been discarded by the Commissioner (Appeals) on the ground that the same had no application as the assessments were provisional. But he has lost sight of the amended provisions of rule 9 B and the law laid down by the Apex Court in its latest pronouncement in the case of CCE, Mumbai-II Vs. Allied Photographics India Ltd. reported in 2004 (166) ELT 3 (SC) 1.4 Accordingly, in the denovo proceedings, the Commissioner (Appeals) was required to specifically examine as to whether there is any specific provisional assessment order passed by the competent authority under Rule 9 B of Central Excise Rules, 1944 and also examine the unjust-enrichment question in the light of the Apex Court judgment in the case of CCE, Mumbai-II Vs. Allied Photographics India Ltd. reported in 2004 (166) ELT 3 (SC).
1.5 The matter was decided denovo by the Commissioner (Appeals) vide order in appeal No.816-817/CE/BPL/2004 dated 27.12.2004 and by this order the Commissioner (Appeals) again allowed both the appeals. Against this order of the Commissioner (Appeals) these appeals have been filed by the Revenue.
2. Heard both the sides.
3. Shri M.S. Negi, the ld. DR, assailed the impugned order by reiterating the grounds of appeal In the Revenues appeal and pleaded that the Tribunal in the remand order had specifically directed to Commissioner (Appeals) to examine as to whether there was any specific order of the competent authority ordering provisional assessment under Rule 9 B of the Central Excise Rules, 1944, and that the Commissioner (Appeals) in the impugned order has wrongly treated the cases where the prices were not finalized, as the cases of provisional assessment, that for the periods of disputes there was no specific order for provisional assessment, that in terms of Apex Court judgment in the case of Metal Forgings vs. Union of India reported in 2002 (146) ELT 241 (SC) (para 12) to establish that the clearances were made on provisional assessment basis there should be, first of all, an order under Rule 9 B of the Central Excise Rules, 1944 and also the material to show that the goods were cleared on provisional assessment basis and the payment of duty was also made on the said provisional basis, that same view has been taken by Honble Bombay High Court in the case of Maharashtra Cylinders Pvt. Ltd. vs. CESTAT, Mumbai reported in 2010 (259) 360 (Bom.), wherein while examining the question as to whether time limit for filing refund under section 11B of the Central Excise Act would be applicable when the price at which the goods had been supplied by an assessee to its customers was provisional and the duty had been paid on self-assessment basis, Honble Court held that if the procedure for provisional assessment was not followed for the impugned clearances and the records do not indicate that the clearance were affected on provisional basis, the same cannot be treated as provisional assessment, that in the present case the provisional assessment ordered by the Assistant Commissioner in 1995 has been finalized vide its order dated 31.07.1998, and after this no separate order either under Rule 9 B of the Central Excise Rules 1944 had been passed and hence payment of duty during the period of dispute cannot be said to be under provisional assessment and accordingly the bar of limitation for filing refund claim under section 11B - one year from the relevant date would be applicable. He, therefore, pleaded that the impugned order holding that the refund claims were not time barred is not correct. On the question of unjust enrichment, Shri Negi cited the judgment of Tribunal in the case of Sangam Processors reported in 1994 (71) ELT 989 which held that the subsequent adjustment by the assessee by issue of credit notes to the customers will not save him from the bar of unjust enrichment, and once the goods have been cleared on payment of duty at higher rate or higher value, the incidence of the excess duty would be deemed to have been passed on to the customers. Shri Negi, therefore, pleaded that the impugned order passed by the Commissioner (Appeals) is not correct.
4. Shri ZU Alvi, Advocate, the ld. Counsel for the respondent defended the impugned order by reiterating the findings of the Commissioner (Appeals). With regard to the question of applicability of limitation, he pointed out to the findings of the Commissioner (Appeals) in para 3 (iii) of the impugned order, wherein the Commissioner (Appeals) has observed that initially on the assessees request dated 27.05.1995, the Assistant Commissioner had ordered provisional assessment under Rule 9 B on 08.03.1995 on the ground that final prices of the goods are not available at the time of removal, that subsequently on the assessees undertaking to pay differential duty and also their undertaking that the final prices would be available within a period of 3 to 4 months, the Assistant Commissioner vide his order dated 31.07.1998 accepted the respondents request to withdraw the provisional assessment order, that this withdrawal of the provisional assessment order dated 08.03.1995 was only on the understanding that the final prices would be available within 3 to 4 months from the date of clearance and, accordingly, the order dated 31.07.1998 would not apply to the situation where the final prices were not available within 3 to 4 months and that in such cases the assessments would have to be treated as provisional. Shri Alvi also pleaded that B-13 General Bond earlier executed in March, 1995 had been discharged only on 30th May, 2002 and that bond was in existence during the period of dispute. He also pleaded that the delay in finalization of the supply price was only on account of delay on the part of the oil marketing companies to whom the LPG Cylinders were being supplied and, therefore, in such cases, the assessments have to be treated as provisional, even if, there was no specific provisional assessment order for those period. With regard to the question of unjust-enrichment, Shri Alvi reiterated the findings of the Commissioner (Appeals) in para 3 (iv) of the impugned order and also pleaded that the Order-in-Original itself states that there is no unjust enrichment. Shri Alvi pleaded that though the respondent had cleared the goods on payment of duty at higher price on provisional basis, subsequently when the prices were finalized and the final prices were lower than the provisional prices, they received the payment only on the basis of final prices and the duty chargeable on the same, and as such the respondent have not been reimbursed the excess duty which had been paid by them and hence the Tribunal judgment in the case of Sangam Processors case would not apply. Shri Alvi with regard to the refund claim of Rs.3,93,783/- also pleaded that in this case the duty of which refund is sought had been paid on 19.04.2001, 30.04.2001 and 15.05.2001 and, therefore, the refund claim filed on 16.04.2002 would be within the limitation period of one year from the relevant date as the relevant date as defined in section 11B in this case would be the date of payment of duty. He pleaded that the Assistant Commissioner has wrongly taken the dates of clearance as the relevant date, while it is the date of payment of duty which is to be treated as relevant for the purpose of refund under section 11B.
4.1 Shri Alvi, therefore, pleaded that the refund claim of Rs.3,93,783/- had been filed well within the limitation period of one year from the relevant date.
5. We have considered the submissions from both the sides and perused the records.
6. Coming first to the refund claim of Rs.3,93,783/-, this refund claim is in respect of the clearances made during the period from 10.04.01 to 21.05.2001. However, it is not in dispute that the excess duty paid whose refund has sought had been paid on 19.04.2001, 30.04.2001 and 15.05.2001. The Assistant Commissioner has taken the date of clearance as the relevant date under section 11 B for counting the limitation period of one year and on this basis has held that the refund claim filed on 16.04.2002 is barred by limitation. However, in terms of definition of the term relevant date in section 11 B, in the present case the relevant date would be the date of payment of duty. Since the excess duty paid whose refund has sought had been paid on 19.04.2001, 30.04.2001 and 15.05.2001, in our view, the refund claim of the duties filed on 16.04.2002 would be within limitation period and hence on this point the Commissioner (Appeal)s order is correct.
7 Coming to the question of unjust enrichment, the respondents plea is that though the duty initially had been paid on final price which was higher than the final price, the duty reimbursement received by them from the HPCL was only of the duty payable on the final price and not of the duty paid on the provisional price which was higher. If this is so, the bar of unjust enrichment would not apply and such a situation the Tribunal judgment in the case of Sangam Processors Ltd. (supra) would not be applicable. In the present case, in our view, it is the judgment of the Tribunal in the case of CCE, Jaipur vs. Universal Cylinder reported in 2004 (175) ELT 202 (Tri.-Del.) which would be applicable and this judgment has been affirmed by the Apex Court by judgment reported in 2005 (179) ELT A 41 (SC). In the case of Universal Cylinders initially LPG Cylinders had been cleared to oil marketing companies at a provisional price on payment of duty on that price and subsequently final prices fixed were lower than the provisional price and the excess price including excess duty had been adjusted from the subsequent supplies made by the assesses and in these circumstances, it has been held by the Tribunal that the bar of unjust enrichment would not apply. In view of this, so far as this refund claim is concerned, the bar of unjust enrichment would not apply and as such there is no infirmity in the Commissioner (Appeals) order.
8. Coming to the second claim of Rs.12,67,122/- in respect of the clearances during the period from July, 1999 to October, 2000, which had been filed on 28.08.2001 there is no dispute that this refund claim had been filed after expiry of limitation period of one year from the relevant date as prescribed. The dispute in this case is as to whether the payment of duty in respect of goods cleared during the period of dispute is to be treated as under provisional assessment, as if the assessment was provisional in terms of the provisions of section 11B, the limitation period prescribed therein would not be applicable. In this regard, the appellants plea is that in the year 1995 on the appellants request dated 27.02.1995 for provisional assessment the Jurisdictional Assistant Commissioner has passed an order dated 08.03.1995 ordering provisional assessment. However, subsequently on 31.7.1998 the Assistant Commissioner accepting the assessees request for withdrawal of the provisional assessment order ordered finalization of the assessment for 1997-98 on the undertaking given by the assessee that final prices are available within 3-4 months and that they would pay the differential duty as soon as the final prices are available. According to the Commissioner (Appeals), in a situation where on account of delay on the part of the HPCL, the prices were not finalized within 3 to 4 months, the assessment should be treated as provisional, even though there is no formal provisional assessment order and for refund of the excess duty paid during such period the bar of unjust enrichment would not apply. We do not agree with this order of the Commissioner (Appeals), as the Apex Court in the case of Metal Forgings vs. Union of India reported in 2002 (146) ELT 241 (SC) in para 11 and 12 of the judgment has held that clearances can be treated as having been made on provisional basis only when an order under Rule 9 B had been passed and beside this, the record should show that the goods were cleared on the basis of the said provisional assessment order. Same view has been taken by Honble Bombay High Court in the case of Maharashtra Cylinders Pvt. Ltd. vs. CESTAT, Mumbai (supra). In the present case during the period of dispute i.e. July 1999 to October, 2000, the goods had been cleared on payment of duty on self-assessment basis and, as such, there was no order for provisional assessment issued under Rule 9 B. Therefore, just because the prices were not finalized by the respondents customers within 3 to 4 months, the assessment cannot be treated as provisional, and, therefore, the limitation period prescribed under section 11B would be applicable for filing of the refund claim. Therefore, this refund claim had been correctly rejected as hit by limitation by the Assistant Commissioner and the Commissioner (Appeals) order holding that the same is not time barred is not correct.
9. In view of the above discussion, while the appeal No.E/3001/2005 filed by the Revenue in respect of refund claim of Rs.12,67,122/- is allowed and in respect of this appeal while the order passed by the Commissioner (Appeals)s is set aside and the Assistant Commissioner order is restored, the appeal No.E/3000/2005 filed by the Revenue is dismissed, and as such, the Commissioner (Appeals)s order in respect of refund claim covered under this appeal is upheld.
[Dictated & Pronounced in the open Court].
(S.K.MOHANTY) (RAKESH KUMAR) MEMBER (JUDICIAL) MEMBER (TECHNICAL) Anita ?? ?? ?? ?? 0 14