Custom, Excise & Service Tax Tribunal
M/S Dalmia Cement (Bharat) Ltd vs The Commissioner on 8 June, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench Single Member Bench Court I Appeal No.E/23837/2014 (Arising out of Order-in-Appeal No.41/2014(T)CE, dated 24-09-2014 passed by Commissioner of C.CE&ST(Appeals), Guntur) For approval and signature: Honble Ms. Sulekha Beevi, C.S. 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 Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s Dalmia Cement (Bharat) Ltd. ..Appellant(s) Vs. The Commissioner. C&C.E, Nellore. ..Respondent(s)
Appearance Shri S.Gokarnesan, Advocate for the Appellant Shri V.Ramakrishna, AR for the Respondent Coram:
Honble Ms. Sulekha Beevi,C.S. Member(Judicial) Date of Hearing : 31/03/2016 Date of decision: 08/06/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi,C.S] The appellant is aggrieved by rejection of refund claim on the ground that the amount is hit by the doctrine of unjust enrichment.
2. The appellant, M/s Dalmia Cement(Bharat) Ltd is engaged in manufacture of Cement and Clinker and are registered with Central Excise Department. They are clearing finished products in three manner;
i) Cement cleared in packaged form meant for retail sale, where the duty is payable on the basis of Retail Sale Price + Specific Rate of duty, in terms of Section 4 A of the Central Excise Act, 1944.
ii) Cement cleared in packaged form, where RSP is not required to be affixed on the bags(not for Retail sale but for Industrial or Institutional Consumers) The duty is payable on the basis of transaction value in terms of Section 4 of the Central Excise Act, 1994.
iii) Cement cleared in other packaged form(loose cement) where duty is payable on the basis of transaction value in terms of Section 4 of Central Excise Act, 1944.
3. The Issue in the present case is in respect of cement cleared in packaged form, where RSP is not required to be affixed on bag (S.No.(ii) above) and duty is payable on the basis of transaction value.
4. The cement in packaged form where RSP is not required to be affixed on bags attracted the same rate of duty (10% on transaction value) as is applicable to cement cleared in other than packaged form(Loose cement) in terms of proviso to Sl.No.52 contained in Notification No.4/2006 CE, prior to 17-03-2012. To make it more clear, the notification No.4/2006 in Sl.No.52 contained a proviso which stated that even packaged cement when cleared to customers where the MRP is not required to be affixed as per Legal Metrology, Act & Rules (ie. sale to Industrial and Institutional Consumers) the rate of duty would be the same as that of loose cement.
5. Later by Notification No.12/2012.CE dated 17-03-2012, the rate of duty for cement other than those cleared in packaged form (ie. loose cement was enhanced from 10% to 12%. This notification did not contain the proviso to Sl.No.52. As such the duty payable on loose cement was 12% and that of cement cleared in packaged form where RSP is not required to be affixed (sale to Industrial and Institutional Consumers) was 12% Adv. + Rs.120 per mt. specific rate.
6. Later, a corrigendum to Notification No.12/2012 was issued as F. No.334/1/2012-TRU dated 22-03-2012 by which proviso was inserted to Sl.No.52. Thus, the rate of duty payable on Sale to Industrial & Institutional Consumers became 12%, same as that of loose cement and not 12% Adv. + Rs.120/- per Mt. Specific rate.
7. During the period from 18-03-2012 to 24-03-2012, the appellant cleared the goods to Industrial/ Institutional Consumers at the rate of 12% Adv. + Rs.120/- per MT. specific rate. Pursuant to the Corrigendum, appellant filed refund claim for the excess duty paid. According to the appellant as the corrigendum relates back to 17-03-2012, the excess amount paid is not a duty at all and that being merely a deposit, it has to be refunded. Being merely a deposit unjust enrichment is not applicable. The second argument is that, there is no change in the price collected from customers. That therefore, the incidence of duty has not been passed on and therefore, refund is not hit by unjust enrichment.
8. The original authority rejected the refund claim on the finding that rate of higher excise duty was mentioned in the invoices. The original authority observed as under:
The assessees contention that the unjust enrichment clause does not arise is not acceptable. The invoices issued during the relevant period showed higher rate of duty which has been transferred as Cenvat credit to the receivers. This cannot be taken back by the assessee except by issue of credit note to the customers. No such proof /evidence have been produced. There is no indication of reduction in prices pursuant to reduction in duties.
9. The appellant carried the issue in appeal before the Commissioner (Appeals) and vide the Order impugned herein, the Commissioner (Appeals) rejected the refund upholding the order of the original authority. The Commissioner (Appeals) observed that appellant had cleared the goods on charging applicable rates of duty liability in the invoices, though the sale price remained the same before as well as after change of rate of duty. Refuting this the appellant contends that duty liability was shown in the invoice only because it was required under law to do so and as the price remained uniform, the incidence of duty has not been passed on. The Commissioner (Appeals) placed reliance on the judgment in the case of Interach Building Products(P)Ltd 2005(184) ELT 154(Tri-Delhi) in which it was held that mere stability in price does not lead to an irresistible conclusion that burden of duty has not been passed on to the customers. In the absence of documents to substantiate that incidence of duty is borne by them, the refund amount is hit by unjust enrichment.
10. The Commissioner (Appeals) failed to rely on the Order-in-Appeal dated 22-01-2014 passed in appellants own case in which, the Commissioner (Appeals) applied the dictum laid in the case of CCE, Gurgaon Vs Uniproducts Ltd. reported in 2009(238) ELT 735(P&H) where it was held that the difference in duty paid being excess amount paid as deposit, does not have the colour of duty and therefore, is not hit by unjust enrichment. The appellants have filed the present appeal against the rejection of refund on the ground that it is hit by unjust enrichment.
11. I have heard both sides and perused the appeal records.
12. The contentions put forward by the appellant are as under:
(i) The composite price was always kept the same. There is no change in price collected from customers before or after issuance of notification 12/2012 or the corrigendum issued on 22-03-2012.
(ii) Though the higher duty was shown in the invoices, it was done so only on account of statutory requirement as per Rule 11 of Central Excise Rules, 2002.
(iii) The difference amount(excess paid ) paid is only a deposit and not duty. After issuance of corrigendum, the Government has no power to collect excess amount as duty. It becomes only a deposit. For the amount paid as deposit, unjust enrichment is not applicable.
13. Countering these contentions, the learned AR vehemently argued that when the appellant has issued invoices showing the higher duty, it definitely means that the incidence of duty has been passed on. Unless the appellant furnishes credit notes or other documents, to establish that duty has not been passed on to another, the refund claim is hit by unjust enrichment. He argued that duty can be collected by appellant only by issuing Central Excise invoices. On issuing such invoices, the presumption under Section 12B arises, and unless the contrary is proved, the duty is deemed to be passed on to the buyer.
14. It is not disputed that rate of duty payable is 12% Adv. during the relevant period(from 18-03-2012 to 24-03-2012), so also it is not denied that appellant mentioned the duty separately in the invoices.
15. The appellant has furnished a comparison chart showing excess duty paid in the case of Institutional/industrial customers on particular invoices during the period 18-03-2012 to 24-03-2012. He relies upon this statement to canvas the contention that the price remained uniform even when the appellant paid the higher duty (from 18-03-2012 to 24-03-2012) and that therefore, the appellant has not passed on the duty to the customer. Details of one invoice contained in the comparison chart is give below as example:
(A) Excise duty paid computation as per original invoice(the higher duty paid).
(B) Date : 18-03-2012
(C ) Invoice No :1300161013
(D) Customer Name : Chamundi Constructions
(E) Quantity : 25
(F) Total invoice amount : Rs.1,27,000/-
(G) VAT : Rs.16,083/-
(H) Total Excise Duty : Rs.14,457/-
(I) Base value including freight
in invoice : Rs.96,460/-
(J) Less freight : Rs.4,493/-
(K) Assessable Value : Rs.91,967/-
The appellant has done a backward calculation to arrive at the excess duty paid consequent to corrigendum issued.
(L) Gross amount as per invoice : Rs.1,27,000/-
(M) Less VAT : Rs.16,083/-
(N) Freight : Rs. 4,493/-
(O) Revised assessable value
(L-M-N)/ 1.1236 : Rs.94,717/-
(P) Revised duty (0*0.1236) : Rs.11,707/-
(Q) Difference (excess duty paid )
( H- P) : Rs. 2,750/-
16. The learned counsel by this chart attempts to establish that the price( Rs.1,27,000/-) remained the same always and that therefore, the duty has not been passed on. The learned counsel contends that the price to customer is a composite price and such price has not changed prior to 17-03-2012 or after during the period 17-03-2012 to 24-03-2012.
17. Another argument advanced by the counsel is that the excise duty was mentioned in the invoices due to statutory requirement. That only because the excise duty happened to be mentioned in invoices it does not mean that duty has been passed on, as the price remained the same. The learned counsel relied on the judgment laid in Commissioner Vs Dhariwal Industries Ltd 2014(303) ELT 496(Guj) which though appealed before the Honble Supreme Court by department the SLP was dismissed.
18. In the said case, the department disputed the classification of goods, and directed the assessee to classify the goods under the heading 2404.90. The duty payable under such classification was higher @ 16%. The assessee under protest paid higher duty. Later, w.e.f. 01-03-2001, the tariff rate settled the controversy of classification. The assessee filed refund claim of the higher duty paid which was rejected for the reason of unjust enrichment. The assessee produced a comparison chart establishing that incidence of duty was borne by assessee and not passed on to customers. However, taking note of the fact, that invoices had separately shown the Central Excise Duty, which would mean that duty is passed on to customer, the refund claim was rejected. In second appeal, the Tribunal compared the invoices of the disputed period as well as the period immediately preceding to such period and came to the conclusion that the price remained exactly the same. The Tribunal referred to the judgments to the decisions laid in Mafatlalal Industries case 1997(89) ELT 247 SC and Asst.Collector of Customs Vs Anam Electrical Manufacturing Company 1997(90) ELT 260 SC.
19. It is correct that the appellant has issued Central Excise invoices showing the duty element. But by the issuance of corrigendum the amount shown as duty in the invoices looses the colour/character of duty and becomes a mere deposit. In Polyplex Corp Ltd Vs UOI 2014(306) ELT 377(All) the Honble High Court had occasion to analyse the nature and effect of corrigendum. It was observed that corrigendum is not an amendment or modification or alteration in the earlier notification so as to make a change therein as such, but when the author of document makes a correction, it relates back to the date of initial authority for the reason that correction means whatever written was not correct or there was some mistake which needs to be corrected. A correction or corrigendum precedes an inherent admission on the part of the person making correction/issuing corrigendum that the initial document or initial authored material has some mistake and admitting this mistake the same is being rectified/corrected and hence a corrigendum /correction.
20. This brings me to the position that after issuance of corrigendum the excess duty, paid lacks the colour of duty and is merely a deposit. The Honble Court of Kerala in W.P.(c ) No.18126/2015(M) vide Order dated 06-05-2015 in M/s Geojit BNP Paribas Financial Services Ltd Vs CCE, Customs & ST, Kochi referring to the judgment laid in CCE, Bangalore Vs KVR Constructions 2012(26) STR 195(Kar) quoted that when once there was no compulsion or duty cast to pay the service tax, the amount of Rs.1,23,96,948/- paid under mistaken notion would not be a duty or service tax payable in law. Therefore, once it is not payable in law there was no authority for the department to retain such amount. By any stretch of imagination, it will not amount to duty of excise to attract Section11B. Therefore, it is outside the purview of Section 11B. The Honble Court held that when no service tax is leviable, the amount paid is not relatable to Section 11B. It needs also to be mentioned that on the very same issue, in respect of appellants other units at Dalmiapuram and Ariyalur, Tamil Nadu, the Commissioner(Appeals) had allowed refund vide Order-in-Appeal No.3/2013 dated 28-01-2013 and Order-in-Appeal No.10/2014 dated 22-01-2014.
21. From the above, I am of the view, that the excess paid is only an amount deposited by appellant, not being duty is not hit by doctrine of unjust enrichment. In the result, I hold that appellant is eligible for refund. The appeal is allowed with consequential reliefs, if any.
(Pronounced on 18/06/2016 in open court) (SULEKHA BEEVI C.S.) MEMBER (JUDICIAL) ..dks 11