Telangana High Court
The Commissioner Of Customs And Central ... vs M/S. Amrutanjan Limited on 18 November, 2025
Author: P.Sam Koshy
Bench: P.Sam Koshy
THE HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE SUDDALA CHALAPATHI RAO
C.E.A. Nos.114 of 2011 and 155 of 2017
COMMON JUDGMENT:(per the Hon'ble Sri Justice P.Sam Koshy) Heard Mr. Dominic Fernandes, learned Senior Standing Counsel for CBIC appearing on behalf of the appellant / Revenue in both C.E.As., Mr. S.Sriram, learned counsel for the respondent / assessee in C.E.A. No.114 of 2011, and Mr. Siddram Maneendra, learned counsel for the respondent / assessee in C.E.A. No.155 of 2017.
2. These are two appeals under Section 35G of the Central Excise Act, 1944 (for short 'the Act') preferred by the appellant i.e. the Customs Department.
3. C.E.A.No.114 of 2011 is one where the challenge is to the Final Order No.882 of 2009, dated 26.03.2009 in Appeal No.CE/938/2008, passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zone Bench at Bangalore. The issue in this Appeal relates to the period between February, Page 2 of 14 1985 to 26.04.1995. Further, C.E.A. No.155 of 2017 is one where the challenge is to the Final Order No. A/30782/2016, dated 03.08.2016 in Appeal No. E/964/2011, passed by the Customs, Excise and Service Tax Appellate Tribunal, Regional Bench, Hyderabad.
4. Vide the impugned order in C.E.A. No.155 of 2017, the CESTAT held that pursuant to the Final Order No.882 of 2009, dated 26.03.2009, refund arising out of the finalization of provisional assessment during the period February, 1985 to April, 1995 need not pass the test of unjust enrichment and accordingly held that the assessee is entitled for refund of Rs.2,86,39,117/- for the period between March, 1985 to April, 1991 and March, 1994 to April, 1995.
5. In C.E.A. No.155 of 2017, the claim of the assessee was finalized in terms of the order dated 26.03.2009 passed by the CESTAT which is under challenge in C.E.A. No.114 of 2011.
6. The primary contention of the learned Senior Standing Counsel for CBIC in C.E.A. No.155 of 2017 was that since the order dated 26.03.2009 of the CESTAT has already been challenged in C.E.A. No.114 of 2011, it cannot Page 3 of 14 be presumed that the provisional assessment has attained finality and therefore the CESTAT ought not to have decided the appeal of the assessee which is under challenge in C.E.A. No.155 of 2017 and should have waited till the finalization of C.E.A. No.114 of 2011. Thus, the fate of C.E.A. No.155 of 2017 solely revolves around the fate of C.E.A. No.114 of 2011. If the appeal of the Revenue viz., C.E.A. No.114 of 2011 fails or is dismissed, as a natural corollary C.E.A. No.114 of 2011 also would automatically get dismissed as the very ground of challenge in C.E.A. No.155 of 2017 would no longer survive and the result would be in converse if C.E.A. No.114 of 2011 is allowed in favour of the Revenue.
7. In view of the aforesaid factual backdrop, we proceed to decide C.E.A. No.114 of 2011. The substantial question of law raised in this appeal for ready reference is reproduced hereunder:
"Whether CESTAT is justified in holding that Principles of Unjust Enrichment has not application in the present case without considering the law laid down by Apex Court regarding Principles of Unjust Enrichment in decisions reported in M/s Sahakari kand Udyog Mandal Limited Vs CCE 2005(181)-ELT.328 SC and State of Maharashtra & Others Vs. Swanstone Multiplex Cinema (P) Limited 2009-TIOL-90-SC ET."Page 4 of 14
8. It would be relevant at this juncture to take note of the Circular of the Central Board of Excise and Customs i.e. Circular No. 794/27/2004-CX., dated 23.06.2004, whereby the Central Board of Excise and Customs clarified in respect of the doctrine of unjust enrichment to cases of provisional assessment and payment of duty paid under protest. The relevant portion of the said Circular is reproduced below:
"The issue has since been decided by the Hon'ble Supreme Court vide their judgment in the case of Allied Photographics Ltd. [2004 (166) E.L.T. 3 (S.C.)], wherein while holding the judgments in the cases of Sinkhai Synthetics & Chemicals Pvt. Ltd. [2004 (143) E.L.T. 17 (S.C.)] and National Winders [2003 (154) E.L.T. 350] (which were on the issue of applicability of the provisions of unjust enrichment in case of payment of duty under protest) to be per incuriam, Hon'ble Supreme Court has affirmed their judgment in the case of T.V.S. Suzuki Ltd. [2003 (156) E.L.T.161 (S.C.)].
It is requested that the field formations in your charge be informed of this judgment and disposal of pending cases."
9. The Hon'ble Supreme Court in Commissioner of Central Excise, Chennai vs. T.V.S. Suziki Ltd. 1 referring to an earlier landmark decision on the subject in Mafatlal Industries Ltd. & Ors. vs. Union of India & Ors.2 in paragraph Nos.4 to 7 has held as under:
1
2003 (156) E.L.T. 161 (S.C.) 2 (1997) 5 SCC 536 Page 5 of 14 "4. There is no dispute that the refund claim in this case was made much prior to the addition of the proviso in sub-rule (5) of Rule 9B. On the date on which the refund claim was made, the law applicable was the law as declared by this Court in Mafatlal Industries Ltd. (supra) which we have reproduced above. However, it is contended by the learned counsel Shri Verma for the department, that the claim of refund would be governed by the proviso introduced in sub-rule (5) of Rule 9B, and that as a consequence, the restrictions in Section 11A and Section 11B with regard to the procedure for refund would apply to the case of the respondent. The same question came up for consideration of this Court in Sinkhai Synthetics & Chemicals Pvt. Ltd. v. C.C.E., Aurangabad, (2002) 143 E.L.T. 17 SC.
This Court took the view that the case would be governed by the rule laid down in Mafatlal Industries Ltd. (supra). This view has been reiterated in a subsequent judgment of this Court in C.A. No. 2533 of 2001. (Commissioner of Central Excise, Meerut v. M/s. Star Paper Mills Limited, [2003] 7 SCC 27) upholding the view of the tribunal that the refund claim of the asseessee before the court was justified.
5. Shri Verma fairly concedes that the proviso introduced in sub-rule (5) of Rule 9B cannot be said to be retrospective in operation. He, however, contends that on the date on which the proviso was brought into force, i.e. 25.6.1999, the refund claim was still pending with the departmental authorities and, therefore, it had to be adjudicated in accordance with the law as it became enforceable from 25.6.1999. In our view, this contention cannot be accepted. Merely because the departmental authorities took a long time to process the application for refund, the right of the asseessee does not get defeated by the subsequent amendment made in sub-rule (5) of Rule 9B. The Commissioner of Central Excise and the CEGAT were, therefore, justified in holding that the claim for refund made by the respondent had to be decided according to the law laid down by this Court Page 6 of 14 in Mafatlal Industries Ltd. (supra) and would not be governed by the proviso to sub-rule (5) of Rule 9B.
6. In the result, we find no merit in appeal. The appeal is dismissed. However, there shall be no order as to costs.
Civil Appeal Nos. 2891/2001, 8380/2001 and 610-611/2002
7. In all these appeals the question which arises for our consideration is identical. The refund claims were made pursuant to the finalisation of provisional assessment orders and prior to 25.6.1999, i.e. the date which the proviso to sub-rule (5) of Rule. 9B came into force. In our view, therefore, all these cases would be governed by the rule in Mafatlal Industries Limited (supra) namely that the restrictions in Section 11A and Section 11B would not apply to refund claims consequent upon finalization of provisional assessment orders.
Hence, these appeals are dismissed.
No costs"
10. The said view was also reiterated in Commissioner of C. Ex., Mumbai-II vs. Allied Photographics India Ltd.3, wherein in paragraph Nos.12 and 14, it has been held as under:
"12. In the present case, reliance was placed by the respondent M/s APIL on the above para in support of its contention that payment of duty under protest and payment of duty under provisional assessment are both "on account" payments under the Act. We do not find any merit in this argument. As discussed, there is a basic difference between duty paid under protest and duty paid under rule 9B. The duty paid under protest falls under section 11B whereas duty paid under provisional assessment falls 3 2004 (166) E.L.T. 3 (S.C.) Page 7 of 14 under rule 9B. That section 11B deals with claim for refund whereas rule 9B deals with making of refund, in which case the assessee has not to comply with section 11B. Therefore, section 11B and rule 9B operate in different spheres and, consequently, in para 104 of the said judgment, it has been held that in cases where duty is paid under rule 9B and refund arises on adjustment under rule 9B(5), then such refund will not be governed by section 11B. In the said para, it has been clarified that if an independent refund claim is made after adjustment on final assessment under rule 9B(5), agitating the same issues, then such claim would attract section 11B. This is because when the assessee makes an independent refund claim after final orders under rule 9B(5), such application represents a claim for refund and, it would not come in the category of making of refund and therefore, the bar of unjust enrichment would apply. Hence, there is no merit in the contention of the respondent M/s APIL that although in this case duty was paid under protest, there was no difference between such payment and duty paid under provisional assessment under the said Act. This argument was obviously advanced because unless the two payments are equated as contended, the respondent M/s APIL was required to comply with section 11B. In this matter, duty has been paid under protest. It is the case of the respondent M/s APIL that since such payment was similar to payment under rule 9B, the respondent M/s APIL was not required to comply with section 11B. In the light of the discussion hereinabove, we hold that the respondent was bound to comply with section 11B. Lastly, in any event, the application dated 11.2.1997 fell in the category of refund claim being made after finalization of assessment of NIIL and, therefore, section 11B had to be complied with in terms of para 104 of the above judgment in the case of Mafatlal Industries Ltd. (supra). For above stated reasons, since there was failure to comply with section 11B, the respondent was not entitled to refund.Page 8 of 14
xxx xxx xx
14. As stated above, para 104 of the judgment in the case Mafatlal Industries Ltd. (supra) states that if refund arises upon finalization of provisional assessment, section 11B will not apply. Para 104 of the said judgment does not deal with payment under protest. In the light of what is stated herein, we may now consider the judgment of this Court in the case Sinkhai Synthetics & Chemicals Pvt. Ltd. (supra). In that matter, the assessee was a manufacturer. The assessee claimed exemption which was denied by the Department. The assessee went in appeal to CEGAT. Pending appeal, assessee paid excise duty under protest. The assessee succeeded before the CEGAT and claimed refund on 17.1.1991. Refund was denied by the Department. Therefore, it was a case of payment of duty under protest. However, in the said decision, this Court applied para 104 of the judgment of the Constitution Bench in the case of Mafatlal Industries Ltd. (supra), which with respect, had no application. As stated above, para 104 of the judgment in the case of Mafatlal Industries Ltd. (supra) dealt with refund consequent upon finalization of provisional assessment. Para 104 does not deal with refund of duty paid under protest. As stated above, there is a difference under the Act between payment of duty under protest on one hand and refund consequent upon finalization of provisional assessment on the other hand. This distinction is missed out, with respect, by the judgment of this Court in the case of Mafatlal Industries Ltd. (supra). We may also point out that the judgment in the case of Sinkhai Synthetics & Chemicals Pvt. Ltd. (supra) is based on the concession made by the counsel appearing on behalf of the Department. That judgment is, therefore, per incuriam. Learned counsel for the respondent herein placed reliance on the judgment of this Court in the case of TVS Suzuki Ltd. (supra). In that case, application for refund was filed. This was on completion of final assessment. On 9.7.1996, the Department issued a show-cause notice as to Page 9 of 14 why the refund claim should not be rejected for non-compliance of section 11B. By order dated 17.7.1996, the refund claim was rejected on the ground that it was beyond limitation. On appeal, the Commissioner (Appeals) observed that the bar of unjust enrichment was not applicable as the assessee claimed refund consequent upon final assessment. He allowed the refund claim. CEGAT agreed with the view of Commissioner (Appeals). Before this Court, the Department conceded rightly that in view of para 104 of the judgment of this Court in Mafatlal Industries Ltd. (supra), bar of unjust enrichment was not applicable in cases of refund consequent upon adjustment under rule 9B(5). The judgment of this Court in the case of TVS Suzuki Ltd. (supra), therefore, supports the view which we have taken herein above that refund consequent upon finalization of provisional assessment did not attract the bar of unjust enrichment."
11. Recently, again the Hon'ble Supreme Court in Commissioner of Customs vs. Hindustan Zinc Ltd. 4 in paragraph Nos.2, 4 and 5 has held as under:
"2. In all these cases the common question which arises is whether claim for refund of amounts deposited towards provisional duty, as a condition for clearance of imported goods can be the subject matter of refund after conclusion of assessment proceedings and having regard to its outcome, under Section 18 of the Customs Act. It is not disputed that this issue has been considered both in the context of provisional assessment under Rule 9- B of the Central Excise Rules by judgments of this Court as well as in the context of Section 18 of the Customs Act, in "Commissioner of Customs, New Delhi vs. M/s Oriental Exports, New Delhi" [2003 156 ELT 161]. The 4 2023 (384) E.L.T. 626 (S.C.) Page 10 of 14 Court held that even though Rule 9-B of the Customs Rules (applicable in that case) was not retrospective, nevertheless pending applications were entitled to the relief prescribed by it. This Court had occasion again to consider the issue in the light of the conflict of decision by a three Judge Bench, in a three Judge Bench decision in "Commissioner of Central Excise, Mumbai-II vs. Allied Photographics India Ltd." [(2004) 4 SCC 34]. The Court held that the doctrine of unjust enrichment was not applicable to provisional assessment even after finalization of the proceedings.
4. It is brought to the notice of this Court that a judgment subsequent to the ruling in "Allied" i.e. "Sahakari Khand Udyog Mandal Ltd. vs. Commissioner of Central Excise & Customs" [(2005) 3 SCC 738] appears to have expressed a different view in that the Court held that to maintain a claim for refund, the assessee has to establish that he or it had paid the amount for which relief is sought and had not passed on the burden to the consumers. This judgment though rendered by a three Judge Bench, overlooked the ruling in Allied (supra). Furthermore, even though the judgment has generally referred to the nine Judge Bench ruling in "Mafatlal Industries Ltd. & Ors. vs. Union of India & Ors." [(1997) 5 SCC 537], nevertheless the specific observations in para 104 appears to have escaped the attention of the Court. Para 104 in Mafatlal Industries Ltd., is extracted below:
104. Rule 9-B provides for provision assessment in situations specified in clauses (a), (b) and (c) of sub-rule (1). The goods provisionally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are finally assessed. Sub-rule (5) provides that "when the duty leviable on the goods is assessed finally in with the provisions of these Rules, the duty provisionally assessed shall be the duty finally assessed, and if the duty provisional assessed falls short of or is in Page 11 of 14 excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be". Any recoveries or refunds consequent upon the adjustment under sub rule (5) of Rule 9-B will not governed by Section 11-A or Section 11-B as the case may be. However, if the final orders passed under sub-rule (5) are appealed against - questioned in a writ petition or suit, as the case may be, assuming that such a writ or suit is entertained and is allowed/decreed - then any refund claim arising as a consequence of the decision in such appeal or such other proceedings, as the case may be, would be governed by Section 11-
B. It is also made clear that if an independent refund claim is filed after the final decision under Rule 9-B(5) reagitating the issues already decided under Rule 9-B - assuming that such a refund claim lies - and is allowed, it would obviously be governed by Section 11- B. It follows logically that position would be the same in the converse situation. Nature and character of refund claims under the Central Excises and Salt Act and the Customs Act."
5. The judgment in "Sahakari Khand Udyog Mandal Ltd.", in this Court's considered view, has to be confined to the facts of that case for the reasons mentioned above. In this view of the matter, there is no infirmity with the findings and conclusions recorded in the impugned judgments, which are in accord with the ratio in Allied (supra). The revenue's appeals are, accordingly, dismissed."
12. With the observations made by the Hon'ble Supreme Court in Sahakari Khand Udyog Mandal Ltd. vs. Commissioner of Central Excise & Page 12 of 14 Customs 5 so also in Sinkhai Synthetics & Chemicals Pvt. Ltd.6 were all per incuriam and that it was the judgment in Mafatlal Industries Ltd. & Ors. (supra) and followed by the judgment in T.V.S. Suziki Ltd. (supra) holds good and is correct law to be applied for refund of claim for the period between February, 1985 to April, 1995. Further, in view of the aforesaid authoritative decision of the Hon'ble Supreme Court and also in the light of the Circular of the Central Board of Excise and Customs, we have no hesitation in holding that the question of law framed has to be answered in favour of the assessee and against the Revenue and it is ordered accordingly. In the result, C.E.A. No.114 of 2011 stands dismissed.
13. Now we proceed to decide the second C.E.A. i.e. C.E.A. No.155 of 2017. The substantial questions of law framed in this appeal for ready reference are reproduced hereunder:
"Whether the Hon'ble CESTAT's decision is correct in holding that refund arising out of the finalization of provisional assessment during the priod February'1985 to April'1995 need not pass the test of unjust enrichment as the amendment to sub-rule (5) of Rule 9B came into force only w.e.f. 25.06.1999? and 5 (2005) 3 SCC 738 6 2004 (143) E.L.T. 17 (S.C.) Page 13 of 14 Whether the Hon'ble CESTAT's Final Order was correct in setting aside the impugned Order-In-Appeal dt.30.08.2011 passed by the Appellate Authority and decided the case without discussing on the grounds put forth and the case laws referred therein ?"
14. What needs to be appreciated is the fact that the impugned order of CESTAT itself in this case was based upon the order of the CESTAT earlier passed on 26.03.2009 which was challenged in C.E.A. No.114 of 2011. The challenge in the present appeal C.E.A. No.155 of 2017 is on the ground that since C.E.A. No.114 of 2011 was pending consideration, the CESTAT could not have decided the same based upon the CESTAT's order which is already sub-judice before the High Court.
15. Now today since we have already dismissed the C.E.A. No.114 of 2011 affirming the order of the CESTAT dated 26.03.2009, as has been held earlier, there is no hesitation on our part in reaching to the conclusion that the order passed by the CESTAT deciding the claim of the assessee for refund in terms of the order dated 26.03.2009 cannot be found fault with either on facts or on law, as the judgment of the Hon'ble Supreme Court and the Circular of the Department itself, all of which have already been reproduced in the earlier part of this judgment stands decided against the Revenue and in favour of the Page 14 of 14 assessee. As a consequence, C.E.A. No.155 of 2017 also stands dismissed and the substantial questions of framed in this appeal stands answered in favour of the assessee and against the Revenue. The order dated 03.08.2016, passed by the CESTAT stands affirmed entitling the assessee for refund of Rs.2,86,39,117/- for the period between March, 1985 to April, 1991 and March, 1994 to April, 1995. Since the claim of refund of the assessee is pending consideration with the Department for almost 2 decades and the instant Appeals also getting dismissed, it is directed that the Customs Department should ensure the entire refund payable to the assessee along with interest in accordance with the statutory provisions be computed and paid within an outer limit of 3 months from today.
16. In the result, both the C.E.As. stands dismissed.
17. As a sequel, miscellaneous petitions pending if any, shall stand closed. However, there shall be no order as to costs.
________________ P.SAM KOSHY, J _______________________________ SUDDALA CHALAPATHI RAO, J Date: 18.11.2025 GSD