Custom, Excise & Service Tax Tribunal
Cewat (India) Processors vs Commissioner Of Central Excise on 7 June, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI COURT No. II APPEAL No.E/1097/04 (Arising out of Order-in-Appeal No.SDK(278)19/MV/2004 dated 30/01/2004 passed by Commissioner of Central Excise (Appeals), Mumbai) For approval and signature: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.R. Chandrasekharan, Member (Technical) 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 : 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? ========================================
CEWAT (India) Processors Appellant
Vs.
Commissioner of Central Excise, Respondent
Mumbai
Appearance:
Shri.T.C. Nair, Advocate for appellant
Shri.V.K. Singh, SDR, for respondent
CORAM:
Honble Mr. Ashok Jindal, Member (Judicial)
Honble Mr. P.R.Chandrasekharan, Member (Technical)
Date of Hearing : 07/06/2011
Date of Decision : 07/06/2011
ORDER NO
Per: P.R. Chandrasekharan
1. This appeal is directed against the order-in-appeal No.SDK(278)19/MV/2004 dated 30/01/2004 passed by the Commissioner of Central Excise (Appeals), Mumbai. In the said order, the Ld. Commissioner (Appeals) had rejected the appellants claim for refund as barred by limitation of time, upholding the order passed by the lower adjudicating authority vide order dated 24/11/2003.
2. Briefly stated the facts of the case are as follows:-
2.1 The appellants are engaged in the processing of fabrics and they had opted for the compounded levy scheme for textile fabrics with effect from 16/12/1998 under Section 3A of the Central Excise Act, 1944. As per the said scheme their capacity of production was provisionally determined at 10.61 chambers for the two stenters in their licensed premises vide the provisional capacity fixation order dated 03/11/99. The appellant was directed to pay the duty on that basis, which was paid by them under protest for the period from March 99 to December 99. Subsequently, the matter was considered by the Commissioner of Central Excise, Mumbai-V, who finally determined and fixed the annual production capacity for the two stenters vide final order dated Feb 2001 for the year 1998-99 and similarly for the year 1999-2000. As per the said final order, the total number of chambers was determined at 10.61 chambers. The said final order of the Commissioner was accepted by the appellant and was not challenged by them and the assessment was finalized by the department, which was also not challenged by the appellant.
2.2 The honble Supreme Court in the case of Sangam Processors Bhilwara Ltd., (SPBL) reported in 2002 (146) ELT 254 (SC) passed a judgement wherein it was held that the length of galleries is not to be included while determining the number of chambers for the purpose of fixing the annual capacity of production of processed textile fabrics.
2.3 On the basis of Honble Supreme Courts judgement, the appellant filed a refund claim dated 11/04/2003 claiming refund of an amount of Rs.7,46,250/- being the excess duty excise paid by them on account of inclusion of galleries in the determination of the number of chambers. The refund claim was for the excess excise duty paid by them for the period from December 98 to February 2001. The said claim was rejected by the jurisdictional Deputy Commissioner on the ground that they had not challenged the final assessment based on the final determination of annual production capacity by the Commissioner of Central Excise vide order dated February 2001 and also on the ground that the claim was barred by limitation of time.
2.4 The appellant went in appeal against the said order before the Commissioner (Appeals) and the impugned order was passed, upholding the Deputy Commissioners order and rejecting the refund claim.
3. The Counsel for the appellant submits that the correct position of law as regards the determination of capacity of production was settled by the Honble Supreme Court only vide their judgement in the case of CCE Vs.SPBL Ltd., reported in 2002 (146) ELT 254 (SC) and only thereafter they could have filed the refund claim. During the material time they had paid duty under protest and, therefore, the refund should be allowed to them. He has placed reliance on the following judgements in support of his contention:
i) Om Textle Pvt Ltd Vs. CCE, Belapur 2006 (74) RLT 233 (Bom)
ii) CCE, Kanpur Vs. Premium Suiting Pvt Ltd., - 2008 (232) ELT 167 (Tri-Del)
iii) Premium Suitings Pvt Ltd., Vs. CCE, Kanpur 2009 (247) ELT 120 (All.)
iv) CCE, Kanpur Vs. Premium Suiting Pvt Ltd., - 2010 (251) ELT 71 (Tri-Del)
v) Rungta Sizing Works & Process Vs. CCE, Thane 2006 (206) ELT 974 (Tri-Mumbai)
4. The Ld. DR appearing for the department submits that the refund claim is clearly time barred and has been filed with the department after a lapse of more than two years from the date of payment of duty and, therefore, in terms of provisions of Section 11B of the Central Excise Act, 1944, the claim is not eligible to be entertained and allowed. He further submits that in terms of the judgement of the honble apex Court in the case of Mafatlal Industries Ltd., Vs. UOI, reported in 1997 (89) ELT 247 (SC), merely because a favourable order has been passed, it does not result in automatic refund and the claimant has to prove that the burden of duty has not been passed on to the third party. In the instant case, the appellant has not discharged this burden cast on them and on that ground also the claim is liable to be rejected.
5. We have considered the rival submission very carefully.
6. In the Om Textile Pvt Ltd., case relied upon by the party, the appellants therein had challenged the correctness of the order whereunder the determination of annual capacity of production was made. In the instant case, the annual capacity of production was finally determined vide order dated February 2001 which has not been challenged and which was accepted by the appellants and the assessments were also finalized. Accordingly, the facts of clearly distinguishable. In asmuch as the final determination of the annual capacity of production was not challenged and consequent duty payments were also not made under protest, the limitation of time prescribed under Section 11B for filing of the refund claim would apply. From that perceptive, the refund claim by the appellant in the instant case is clearly time-barred. As regards the reliance placed by the party on the Premium Suiting Pvt Ltd. case passed by this Tribunal, it is seen that this Tribunal had held that in the absence of any appeal challenging the determination of production capacity and paying duty accordingly, the assessee cannot challenge the correctness of that order in the refund claim as per the decision of the honble apex Court in the case of CCE Vs. Flock India (Pvt) Ltd. (2000 (120) ELT 285 (SC). A reading of this citation clearly indicates that without challenging the assessment, the refund claims cannot be admitted and the said decision does not support the case of the appellant in any way. Similarly, in the case of Rungta Sizing Works & Process, relied upon by the appellants, the matter had not attained finality as far as the determination of the production capacity is concerned and, therefore, this Tribunal in the said case directed that the annual capacity of production be re-determined in accordance with the direction of the honble apex Court in the case of SPBL Ltd., cited supra. In case under consideration, that is not the position and we find that the annual capacity of production was finally determined by the Commissioner vide order passed in February 2001, which was accepted by the appellant and the duty assessment was also finalized in accordance with the said order. Once the assessments have been finalized, which was not challenged, the question of filing a refund claim thereafter will not sustain as per the apex Courts decision in the Flock India case cited supra.
7. Thus, we find that in the instant case, refund claim is clearly time-barred as has been rightly held by the lower adjudicating and appellate authorities. Accordingly, we dismiss the appeal as devoid of merits.
(Dictated in Court) (Ashok Jindal) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) pj 1 2