Custom, Excise & Service Tax Tribunal
Amar Enterprises vs Commissioner, Central Excise & ... on 8 April, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. IV
EXCISE Appeal No. 51715 OF 2021
(Arising out of Order in Appeal No. 51(SM)/CE/JPR/2021 dated 05.03.2021
passed by Commissioner (Appeals), Customs, Central Excise & Central Goods
and Service Tax, Jaipur)
M/s. Amar Enterprises ...Appellant
44, Engineers Enclave,
Pitampura, Delhi-110044
Versus
Commissioner of Customs, ....Respondent
Central Excise & Central GST, Jaipur NCRB, Statue Circle, Jaipur-302005 APPEARANCE:
Mr. Prem Ranjan Kumar, Advocate for the appellant Mr. Mahesh Bharadwaj, Authorised Representative for the Respondent CORAM : HON'BLE Ms. RACHNA GUPTA, MEMBER (JUDICIAL) Date of Hearing/Decision: 08.04.2022 FINAL ORDER No. 50412/2022 RACHNA GUPTA
1. The appellant in the present case is a 100% EOU engaged in copper index. Proceedings were initiated against the appellant alleging that during December 2003 to October 2004 Copper ingots got cleared by appellant in DTA by under valuing the same despite that the value of DTA clearances should be equal to FOB value of the exported goods. The proposed demand as was confirmed vide order in appeal no. 168 dated 27.05.2005 was set aside by the final order of this Tribunal bearing no. 58014 dated 2 E/51715/2021 10.10.2013. Along with the said appeal was filed a stay application also which was already decided by the order dated 09.01.2006 holding that the amount of Rs.5 lakhs as has already been deposited by the appellant is sufficient for hearing the appeal.
Accordingly, the remaining payment of amount was waived off. Pursuant to the aforesaid final order that the appellant filed the refund claim of the said already deposited amount of Rs.5 lakh, on 14.10.2019. The said refund was initially been rejected vide order in original no. 4962 dated 23.12.2019. The appeal thereof has been rejected vide order in appeal no. 31/2021 dated 10.03.2021. Still being aggrieved, the appellant is before this Tribunal.
2. I have heard Mr. Prem Ranjan Kumar, Advocate for the appellant and Mr. Mahesh Bharadwaj, Authorised Representative for the Department.
3. It is submitted on behalf of the appellant that the refund has wrongly been rejected on the ground of limitation. It is submitted that the amount in question was considered to be an amount of pre deposit by this Tribunal and it was otherwise deposited at the stage of the investigation of the impugned litigation which came to an end by the aforesaid final order of 10.10.2013. To such an amount, in the form of deposit, there is no limitation prescribed under the Act. It is submitted that the limitation of one year as mentioned in section 11B of the Central Excise Act has wrongly been invoked by the adjudicating authorities. The said section is applicable only to such amount which can be called as duty. As already mentioned above the amount in question cannot be called 3 E/51715/2021 as duty as it was an amount paid during investigation under protest and subsequently was held to be an amount of pre deposit. Once the allegation of it to be duty has been set aside by this Tribunal and the Department has not filed any appeal against the same. The amount was the deposit of the appellant which the Department is not allowed to retain with themselves. While relying upon the decision in the case of ESTEE Auto Pressings Pvt. Ltd. vs Commissioner of C. EX Chennai reported as 2017 (346) ELT 72 (Mad), learned Counsel has prayed for the appeal to be allowed.
4. While rebutting the submissions, learned DR has laid emphasis upon the findings of Commissioner (A) precisely in para 7 of the order under challenge. It is submitted that the case law as relied upon by the appellant has duly been distinguished by Commissioner (A) while rejecting the impugned demand. Learned DR further mentioned that the appellant became entitled for the impugned refund pursuant to the final order of this Tribunal dated 10.10.2013. Though the relevant date in terms of Section 11B of the Central Excise Act (cc) is the date of the said final order instead of date of deposit. But still the claim had to be within one year from the said relevant date. The order of this Tribunal entitling appellant to the refund is of 2013 whereas the refund application is of the year 2019. The application has been filed after expiry of almost six years. The refund claim is therefore rightly held to be barred by time. Appeal accordingly is prayed to be dismissed.
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E/51715/2021
5. After hearing the rival contentions and perusing the records, it is observed and held as follows:
The apparent and admitted fact is that the amount of Rs. 5 lakhs was actually deposited by the appellant in the form of two bank guarantees of Rs. 2.5 lakhs each in the year 2003 and 2004 i.e. much prior to the initiation of the impugned proceedings against the appellant. No doubt the Departmental adjudicating authorities had confirmed the alleged demand of duty on the noticed difference between the value of DTA clearance and the FOB value of exported goods. But the said confirmation of demand was set aside by this Tribunal vide order dated 10.10.2013. It is also perused from the record that the Department had requested Canara Bank which issued the aforesaid guarantees for invocation of the said two bank guarantees, in favour of Deputy Commissioner (Customs) Bhiwadi, Alwar. The above admitted facts are sufficient to hold that the amount in question is the amount which was never deposited as duty. Though it had been claimed by the Department from the Bank after the adjudicating authorities confirmed the duty demand against the appellant but the said order of Departmental authorities stands set aside vide the order of this Tribunal dated 10.10.2013 with no appeal there against by the Department. It becomes crystal clear that the amount in question cannot be called as duty. Since appellant has been held not liable for any amount to be paid to the Department, the amount in question becomes the deposit of the appellant with the Department.5
E/51715/2021
6. Refund claim of the said amount of Rs. 5 lakhs (fixed in two bank guarantees initially of Rs. 2.5 lakhs each) has wrongly been denied to be refunded invoking section 11B of Central Excise Act. Perusal of the provision shows that the provision relates to the claim for refund of duty. Once it is clear that the amount in question is not the amount of duty, the said provision cannot be invoked. It is also an apparent fact that the aforesaid amount has already been treated by this Tribunal as an amount of pre-deposit (vide order on stay application dated .9.01.2006). The relevant provision applicable to impugned amount is section 35F and 35FF. The very perusal of section 35FF which talks about interest on delayed refund of amount of pre deposit under section 35F makes it clear that the provision is absolutely silent about any time limit for the assesee to claim his amount which was deposited by him for the purpose other than duty. The Hon'ble Apex Court in the case of Union of India vs Suvidhe Ltd. as reported in 1997 (94) ELT A159 (SC) while holding the decision of Bombay High Court reported as 1996 (82) ELT 177 (Bom) has held that Section 11B of the Act can never be invoked to cases of pre- deposit of duty in compliance of section 35 of the Act. Since the pre-deposit condition is not payment of duty but it is only pre- deposit for availing the right of appeal that the time bar of Section 11B cannot be imposed on such an amount while sanctioning the refund thereof. Hon'ble Apex Court in the decision titled as CCE Hyderabad vs. ITC Ltd. reported as 2005 (179) ELT (SC) has observed that even the Department had issued a circular no. 6
E/51715/2021 225/37/2K-CX8A dated 08.12.2004 wherein the Commissioner of Central Excise were directed to advice the officials to order the refund of pre-deposit amount in terms of Section 35F of the Act. A circular was rather fixing the time limit on the Department of three months for sanctioning of the refund of pre-deposit amount. Hon'ble High Court of Madras also in the case of Commissioner Central Excise Coimbatore vs. Pricol Ltd. reported as 2015 (39) STR 190 (Mad.) has held as follows:
"There are also very many judgments of various Courts, which have also reiterated the same principles that in case any amount is deposited during the pendency of adjudication proceedings or investigation, the said amount would be in the nature of deposit under protest and, therefore, the principles of unjust enrichment would not apply. In view of the catena of decisions, available on this issue, this Court answers the first substantial question of law against the Revenue and in favour of the assessee."
7. It becomes clear from the above discussion that the provision of Section 11B of Central Excise Act is not applicable to the refund in question. The Department cannot be allowed to retain the said amount. For the purpose I rely upon the decision of Hon'ble High Court of Punjab and Haryana in the case of Commissioner of Central Excise Gurgaon vs. Alcatel Modi Network System Ltd. reported as 2008 (221) ELT 358 (P&H) and also the final order of this Tribunal in the case of Bajaj Auto Ltd. vs. Commissioner of Central Excise Aurangabad reported as 2007 (213) ELT 577 (Tri) wherein it was held that the amount which was deposited during the initial stages of proceedings cannot be retained by the Revenue and if the same is retained 7 E/51715/2021 then such retention is without the authority of law, that the same will amount violation of Section 365 of Constitution of India. Department also cannot be allowed to be unjustly enriched by retaining the amount for which it had no authority of law to collect.
8. In view of the entire above discussion, it is held that the Commissioner (A) has wrongly invoked the time bar of Section 11B of Central Excise Act despite that the amount in question was not the amount of duty. The order is accordingly set aside and appeal stands allowed. Consequential benefit along with the interest at the rate of 6 percent from the date of deposit till the sanction of amount be extended in favour of the appellant.
(Order dictated and pronounced in the open court) (RACHNA GUPTA) MEMBER (JUDICIAL) Bhanu