Custom, Excise & Service Tax Tribunal
Cc, Trichy vs M/S. S.A. Safiullah & Co on 20 August, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/51/03, E/MISC/162/09 & E/117/04
(Arising out of Order in Appeal No. 149/2002 TRY (ADK) dated 18.10.2002 and Order in Appeal No. 508/2003 (SCN) TRY II dated 27.10.03, passed by the Commissioner of Central Excise (Appeals), Trichy).
For approval and signature
Honble Ms. JYOTI BALASUNDARAM, Vice President
Honble Dr. CHITTARANJAN SATAPATHY, Technical Member
_________________________________________________________
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CC, Trichy : Appellant
Vs.
M/s. S.A. Safiullah & Co. : Respondent
Appearance Shri V.V. Hariharan, JCDR, for the appellant Shri Shankararaman, Adv., for the respondent CORAM Ms. JYOTI BALASUNDARAM, Vice President Dr. CHITTARANJAN SATAPATHY, Technical Member Date of hearing : 20.08.09 Date of decision : 20.08.09 Final ORDER No._____________ Per: Jyoti Balasundaram, The assessees herein cleared bulk quantities of Scented Supari on payment of duty under protest to M/s. A.R.S.& Co., Pudukottai and M/s. Abdul Razak, Pudukottai, who are registered dealers and registered owners of the brand name Nizam. M/s. S.A. Safiullah & Co. cleared the supari in bulk to the job workers for packing the same into unit containers; job workers took credit of the duty paid on the supari and after packing cleared the same back to M/s. S.A. Safiullah & Co. on payment of duty under protest. Thereafter, the dealer sold the supari to various customers. The dealers filed a writ petition in te Honble High Court of Madras for issue of declaration that the scented supari was not excisable; vide order dated 29.06.99, the High court accepted the contention of the petitioners but however added that the consequential remedy of refund of excise duty paid on supari was subject to the test of unjust enrichment and remanded the matter for decision on this aspect. Subsequent to the decision of the Honble High Court, the dealers filed the claim on 24.09.99 for refund of duty of Rs. 1,06,85,548/- borne by them in trading supari during the period 25.05.94 to 14.03.95. A Show Cause Notice proposing rejection of their claim both on the ground of limitation and on the ground of unjust enrichment issued to the dealers; the notice was adjudicated by the Assistant Commissioner holding against the claim both on the ground of limitation as well as on the ground of unjust enrichment. The assessees carried the matter to the Commissioner (Appeals) who allowed the appeal by way of remand to the lower appellate authority to consider only the question of unjust enrichment. As far as the time bar is concerned, he hold that when recovery of duty is illegal and without jurisdiction of law, no limitation is applicable in the case of claim for refund, following the decision of the Honble High Court of Bombay in the case of M/s. Shalimar Textiles Vs. UOI 1986 (25)ELT 625; he had considered the evidence produced before him by the dealer which was not produced before the adjudicating authority and held that there was no unjust enrichment. He, therefore, allowed the appeal of the dealers with consequential relief. The Revenue is in appeal against the said order.
2. As regards the time bar aspect, we note that the decision of the Larger Bench of the Tribunal in the case of National Winder Vs. CCE, Allahabad 2000 (118) ELT 236 (Tri.-LB), holding that when duty is paid under protest by a manufacturer, purchaser does not acquires right to claim refund of duty paid by manufacturer under protest, refund claim to be filed by purchaser within six months from the date of purchase. In its decision reported in 2003 (154) ELT 350 (S.C.), the apex Court has held that if duty is paid by a manufacturer under protest, the limitation of six months will not apply even to a claim for refund by the purchaser. We therefore, hold that the claim for refund by the assessees herein is not hit by limitation.
3. We have heard both sides. We reproduce the findings of the Commissioner (Appeals) on the aspect of unjust enrichment:
With regard to the aspect of unjust enrichment the Asst. Commissioner charges that the claimant produced only sales invoices, Balance Sheets and not any other evidence to prove that the duty incidence have not been passed on to others. But with reference to the documents so produced, the Asst. Commissioner has not recorded any findings whether refund claim is hit by unjust enrichment or otherwise. Now, the appellant has produced all corroborative evidences before me during personal hearing and on scrutiny of those documents it was found to be in order. The Asst. Commissioner who decided the case was also called for the same personal hearing which party attended. However, Asst. Commissioner should have come and examined these documents whether they are allowable or not. But he failed to do so. The lower appellate authority has not listed out the nature of the corroborative evidence produced before him by the assessees. No opportunity was given to the revenue to verify the evidence stated to have been produced before him. We therefore, agree with the Ld. JCDR that the finding of the Commissioner (Appeals) that bar of unjust enrichment is not attracted against the assessees is scriptive and non-speaking. Interest of justice require that the aspect of unjust enrichment should be examined by verifying the evidence placed by the assessees both before the adjudicating authority as well as fresh material produced by them before the lower appellate authority.
4. In the light of the above discussion, the appeal No. E/51/03 is allowed by way of remand for the purpose of examining the issue as to whether the assessees have passed on the incidence of duty to their customers. Appeal No. E/117/04 is a consequence to the Commissioner (Appeals) s order which has been challenged by the Revenue in appeal No. E/51/03. Since the basic questing is as to whether the claim for refund is hit by bar of unjust enrichment has been remanded to the adjudicating authority, the impugned order in E/117/04 is also set aside and the case is remitted for fresh decision along with the earlier case namely E/51/03. The assessees are at liberty to raise the plea that even though the manufacturer had paid the duty out of their cenvat credit account, the dealer was entitled to cash refund, before the adjudicating authority. The appeals are thus allowed by way of remand.
5. The miscellaneous application filed by the revenue for changing the expression M/s. SAS & Co. to M/s. S.A. Safiullah & Co. is allowed for the reason that M/s. SAS & Co. is a manufacturing unit which is distinct from M/s. S.A. Safiullah & Co. who is a dealer.
(Order dictated and pronounced in the open Court)
(Dr. CHITTARANJAN SATAPATHY) (JYOTI BALASUNDARAM)
TECHNICAL MEMBER VICE PRESIDENT
BB
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