Custom, Excise & Service Tax Tribunal
Astamed Healthcare [I] Pvt. Ltd vs Commissioner Of Central Excise, ... on 30 October, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No.E/1038/10-Mum (Arising out of Order-in-Appeal No. SB/58/Th-II/10 dated 18/03/2010 passed by Commissioner of Central Excise (Appeals), Mumbai-I) For approval and signature: Honble Mr. M.V. Ravindran, 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 : No 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?
====================================================== Astamed Healthcare [I] Pvt. Ltd. Appellant Vs. Commissioner of Central Excise, Thane-II Respondent Appearance: Shri Vinay S. Sipal, Advocate for Appellant Shri S.V. Nair, Supdt. (AR), for Respondent CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Date of Hearing : 30/10/2015 Date of Decision : 30/10/2015 ORDER NO Per: M.V. Ravindran
This appeal is directed against Order-in-Appeal No. SB/58/Th-II/10 dated 18/03/2010.
2. Filtering out unnecessary details, the relevant facts that arise for consideration are during the period April, 2007 to December, 2007, appellant herein manufactured pharmaceutical goods, under loan licence for Karnataka Antibiotics & Pharmaceuticals Ltd. (Government of India Enterprises) discharging the duty liability. Subsequently, it was noticed that they have discharged excess duty and was not in accordance with the contract entered by them with Karnataka Antibiotics & Pharmaceuticals Ltd.; appellant filed a refund claim for the amount of Excise duty paid by them in appropriate form. A show cause notice was issued to appellant directing to show that the burden of unjust enrichment has been passed by them. The adjudicating authority after following the due process of law rejected the refund claim. On an appeal, the first appellate authority concurred with the views of the adjudicating authority.
3. Learned counsel would draw my attention to the various documents as also the show cause notice and the impugned orders. He would submit that before the adjudicating authority, appellant had filed the agreement copy, the agreement, Chartered Accountants certificate and letter from Karnataka Antibiotics & Pharmaceuticals Ltd. indicating that they are eligible for the refund of amount paid excess by them; the adjudicating authority has gone beyond the show cause notice and rejected the refund claim on a different ground i.e. inter pretating the provisions of agreement, entered by appellant with Karnataka Antibiotics & Pharmaceuticals Ltd.; he would then draw my attention to the order passed by the first appellate authority and submit that the same findings are recorded by the first appellate authority. He would draw my attention to the Chartered Accountants certificate dated 25-06-2008, before the adjudication and letter dated 28-03-2008, received from Karnataka Antibiotics & Pharmaceuticals Ltd., which stated clearly that Excise duty paid in excess is the problem of the appellant and to apply for refund from the department, as also the fact that amount which has been claimed as refund is balance as at 31.03.2015, shown as receivable from the department. He also reproduces the current Chartered Accountant certificate indicating that the amount is still shown as receivable from the department, he would submit that the issue is not covered by the judgment of the tribunal in case of Brindavan Tex Processors Pvt. Ltd. 2006 (196)ELT 61 (tri. Bang.) & Corning S.A. 2005 (192) ELT 355(Tri. Del.).
4. Learned departmental representative on the other hand submits that the appellant should have taken up all this point before the lower authorities. It is his submission that appellant having discharged the duty liability on the invoices raised by them must have collected the amount from the Karnataka Antibiotics & Pharmaceuticals Ltd. He would then draw my attention to the grounds of appeal taken by the appellant before the first appellate authority and submit that they were seeking remand of the matter before the first appellate authority and submits that he has no objection if the matter is remanded back to the adjudicating authority. It is his submission that the amount has been paid correctly as Excise duty and they should have proceeded against Karnataka Antibiotics & Pharmaceuticals Ltd. for recovery of said amount.
5. Considered the submissions made at length by both sides and perused the records.
6. On perusal of records, I find that the issue involved in this case is regarding the amount excise duty paid by the appellant in the excess, not payable as per the agreement whether refund arises or otherwise.
7. Undisputed facts are that the appellant entered in to an agreement with Karnataka Antibiotics & Pharmaceuticals Ltd. for manufacturing Pharmaceutical goods under job work/loan license basis. It is also undisputed that clause no. 3.17 of the agreement discuses about the amounts they are supposed to get and also discharge of Central Excised duty on the amount of consideration received, working backwards. It is seen form the records that there is no dispute that the appellant has discharged Excise duty, which is not due from him.
8. In my considered view, the lower authorities were in error in rejecting the refund claim filed by them to appellant for more than one reason.
8.1. Firstly, agreement entered by the appellant with Karnataka Antibiotics & Pharmaceuticals Ltd. indicates that the appellant is required to discharge duty liability on the products on the agreed rates including all taxes and duties would mean that the assessable value needs to be worked back by the appellant for discharging the duty liability. Appellant has discharged the duty liability on the rates which are indicated on agreement. The adjudicating authority has relied upon clause no. 3.17 and clause no. 4.3 of the said agreement the appellant has correctly discharged the Central Excise duty; I find that the reasoning adopted by the both the lower authorities is incorrect as clause no. 4.3 requires the appellant herein to discharge the Central Excise duty correctly and clear the goods after payment of duty while clause no. 3.17 is very particular as to the rates which are to be considered for discharge of duty liability by the appellant.
8.2. Secondly, appellant have before the adjudicating authority produced a Chartered Accountant certificate dated 25/06/2008, which reads as under.
It can be seen from the above reproduced Chartered Accountant certificate, he has come to conclusion that the appellant had not recovered the amount from Karnataka Antibiotics & Pharmaceuticals Ltd. I also find that on 28.03.2008, Karnataka Antibiotics & Pharmaceuticals Ltd. has categorly informed the appellant that they will not be making any payment separately on account of Central Excise duty for the excess duty, if any, paid by appellant in various invoices and they also suggested that suitable refund claim be filed before the jurisdictional authorities and they would be discharging their obligation of making payment to the appellant in accordance with para no. 3.17 of the agreement. The said letter is there indicator that the appellant was not paid excess Excise duty, by Karnataka Antibiotics & Pharmaceuticals Ltd.
8.3. Thirdly, I do find from the balance sheets produced before me, as also recent certificate of Chartered Accountant (dated 24/09/2015), that the appellant has been showing the amount for which refund is claimed, in the balance sheet under head loan and in advances. This also indicates that appellant has not expensed out the amounts which have been paid by them as excess Central Excise duty in this appeal.
9. In view of the forgoing factual findings, the order and the judgment of the tribunal in the case of Brindavan Tex Processors Pvt. Ltd.(supra) and Corning S.A.(supra) would cover issue in favour of the appellant herein.
10. In view of the forgoing and the peculiar facts and circumstances of this case, the impugned order are held as unsustainable and liable to be set aside and I do so.
11. The impugned order is set aside and the appeal is allowed with the consequential relief, if any.
(Dictated in Court) (M.V. Ravindran) Member (Judicial) akp 1 7 APPEAL No.E/1038/10-Mum