Custom, Excise & Service Tax Tribunal
Ruby Mills Ltd vs Commissioner Of Central Excise, ... on 5 May, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/622/10-MUM [Arising out of Order-in- Appeal No. SB/14/M-IV/10 dtd. 4/2/2010 passed by the Commissioner(Appeals) Central Excise, Mumbai- Zone I] For approval and signature: Honble Mr Ramesh Nair, 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 :
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?
=======================================================
Ruby Mills Ltd.
:
Appellants
VS
Commissioner of Central Excise, Mumbai-IV
:
Respondent
Appearance
Shri. Vinay Sejpal, Advocate for the Appellants
Shri. Ashutosh Nath, Asst. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 5/5/2015
Date of decision: 5/5/2015
ORDER NO.
Per : Ramesh Nair
This appeal is directed against Order-in- Appeal No. SB/14/M-IV/10 dtd. 4/2/2010 passed by the Commissioner(Appeals) Central Excise, Mumbai- Zone I, wherein Ld. Commissioner upheld the order-in-original and rejected the appeal of the appellant. The fact of the case is that the appellant is engaged in the manufacture of yarns, man made fabric and cotton fabrics falling under Chapter 52, 54 & 55 of CETA, 1985. The appellant filed refund claim of Rs. 1,11,220/- consequent to the dropping of demand on sizing of yarn by order-in-original No. H/Addl/7 to 19/2000 dated 28/7/2000. The said duty was paid under protest on sizing of yarn, captively used in the manufacture of Interlining cloth, which was exported. The refund claim was rejected by then Asstt. Commissioner vide order-in-original No. H/165/2000 dated 4/12/2000 on the ground that the appellant had not produced any evidence to establish that the incidence of duty has not been passed on directly or indirectly to any other person. Aggrieved by the said order the appellant filed appeal before the Commissioner(Appeals) who vide order-in-Appeal No. KKS(56)56M-IV/2001R dated 15/9/2001 rejected the appeal of the appellant on the ground that the appellant has not produced any proof of incidence of duty, for which refund was sought for, has not been passed on to any other person. Aggrieved by the said order-in-appeal dated 15/9/2001 the appellant preferred appeal before the CESTAT, Mumbai, who vide Order No. A-341/C-IV/WZB/04 dated 20/4/2004 set aside the order of Appellate Commissioner and remanded the case to Adjudicating Authority for denovo adjudication on the ground that the appellant had now produced before the Honble CESTAT, copies of the AR-4s, the export invoices, and the Bank Realization Certificates, indicating that the duty paid on sizing portion was not passed on to the overseas buyers. The adjudicating authority once again rejected the refund claim on the ground that appellant has failed to prove that incidence of duty has not been passed on to any other person as required under Section 11B of Central Excise Act, 1944. Being aggrieved by the said order-in-original appellant filed before the Commissioner(Appeals) who rejected the appeal vide the impugned order therefore the appellant is before me.
2. Shri. Vinay Sejpal, Ld Counsel for the appellant submits that at the stage of initial proceedings they were taking stand that since duty was paid under protect therefore bar of unjust enrichment is not applicable. He submits that in view of the earlier Tribunals order, appellant produced all the documents showing that incidence of duty paid on sizing of the yarn was not passed on toany other person. Without prejudice, he also submits that refund sought for in respect of duty paid on sizing of yarn and sized yarn was further used in the manufacture of fabric which undisputedly exported, therefore refund is otherwise payable in terms of Rule 18. He submits that in spite of refund of the duty paid on the material used in the export of the goods in terms of Rule 18 the bar of unjust enrichment is not applicable in terms of proviso to subsection (2) of Section 11B, therefore even if it is not proved whether incidence of duty has been passed on or otherwise, refund is admissible without going into such facts as the provisions of unjust enrichment is not applicable in respect of duty paid either on the final product which is exported or on the material which is used in the manufactured goods. Therefore on both the counts i.e. incidence of duty has not been passed on to any other person as well as on legal matrix, the refund is admissible.
3. On the other hand, Shri. Ashutosh Nath, Ld. Asst. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that the refund is in respect of duty paid on sizing of yarn and since it is not paid on fabric, which are exported, unjust enrichment is applicable. He placed reliance on following judgments:
(a) Western Coalfields Ltd. Vs. CESTAT, New Delhi[2013(288) E.L.T. 203 (BOM.)
(b) C.C.(Import), Mumbai Vs. Forever Living Health Nutrition & Beautycare products Pvt. Ltd. [2014(304)E.L.T. 721(Tri. Mum)].
(c) Commissioner of C. Ex. Vs. Elgi Ultra Industries [2002(146) E.L.T. 396(Tri- Chennai)].
In view of the above judgments he submits that the appellant is under obligation to prove that incidence of duty has not been passed on to any other person, then only refund can be granted, which appellant has failed to prove, therefore refund was rightly rejected by the original authority and upheld by the Commissioner (Appeals), accordingly he prays for dismissing the appeal.
4. I have carefully considered the submissions made by both the sides and perused the record.
5. From the adjudication as well as before the Ld. Commissioners (Appeals), the fact is undisputed that duty was paid on sizing of yarn and such sized yarn used in the manufacture of fabric which has been exported. The refund of duty either paid on the exported goods or on the material used in the manufacture of exported goods is covered under Rule 18 of Central Excise Rules,2002 which is reproduced below:
Rebate of duty?RULE 18.. Where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification.
From the above Rule 18, it is clear that in case of export of goods the rebate of duty not only paid on exported goods but also on material used in the manufacture of exported goods is allowed. Further the issue whether unjust enrichment is applicable in respect of duty paid on the material which has been used for export goods, relevant Section 11B has been referred, which is reproduced below:
SECTION 11B. Claim for refund of duty and interest, if any, paid on such duty (1) Any person claiming refund of any duty of excise and interest, if any, paid on such duty may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12A) as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person :
Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) substituted by that Act :
Provided further that] the limitation of one year shall not apply where any duty and interest, if any, paid on such duty has been paid under protest.
(2) If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise and interest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund :
Provided that the amount of duty of excise and interest, if any, paid on such duty as determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise]under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to
(a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India;
(b) unspent advance deposits lying in balance in the applicants account current maintained with the Commissioner of Central Excise;
(c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act;
(d) the duty of excise and interest, if any, paid on such duty paid by the manufacturer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person;
(e) the duty of excise and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person;
(f) the duty of excise and interest, if any, paid on such duty borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify :
From the clause (a) of first proviso to subsection (2) of Section 11B of Central Excise Act, 1944, it is clear that the provision of unjust enrichment is not applicable in respect of rebate of duty of excise paid on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India.
In the present case fact which is undisputed is that duty paid in respect of sized yarn which has been used in the manufacture of fabric and the said fabric was exported out of India, therefore duty so paid on sized yarn is clearly rebatable under Rule 18 and in accordance with clause (a) of first proviso to subsection (2) of Section 11B, the bar of unjust enrichment is not applicable. Therefore without going into the facts whether incidence of such duty has been passed on or otherwise refund of duty is admissible. In view of the above undisputed and unambiguous position in law, I set aside the impugned order. The appeal is allowed with consequential relief, if any, in accordance with law.
(Dictated in court) Ramesh Nair Member (Judicial) sk 9