Customs, Excise and Gold Tribunal - Tamil Nadu
Dalmia Cements (Bharat) Ltd. vs Commr. Of C. Ex. on 24 January, 2001
Equivalent citations: 2001(75)ECC534, 2001(137)ELT493(TRI-CHENNAI)
ORDER S.L. Peeran, Member (J)
1. In all these appeals, common question of law and facts are involved and hence they are all taken up together for disposal, as per law.
2. The question that arises for consideration is as to whether the unjust enrichment involved in the grant of refund which has already become due on the conclusion of the entire proceedings and reaching finality by disposal of the appellants' cases before the Tribunal. There is no Revenue appeal in the Apex Court in terms of the Tribunal's order directing refund of the matter. The authorities were required to have refunded the amounts in terms of law. However, they again issued show cause notices on the premise that the refund is hit by unjust enrichment and the same are not liable to be refunded. The appellants in this matter contend that in so far as the claims of refund after the amendment to Section 1 IB of the Central Excise Act introducing the provisions of unjust enrichment is concerned, such claims are clearly not enforceable and they do not press the same in view of the law having been clearly laid down by the Apex Court in the case of Mafatlal Industries Ltd. 1997 (87) ELT 247 (SC). Those claims are for the period 1.4.89 to 30.6.89 and 1.7.89 to 30.9.89 which arises from Order-in-Original No. 5/90 dated 15.2.90 which was re-adjudicated again after the conclusion of the proceedings again by the Assistant Commissioner passed second Order-in-Original No. 1543/94 dated 30.6.94 in respect of both the periods and a common Order-in-Appeal No. 80-85/95 (Try) dated 30.6.95. The appeal numbers arising from these two claims and relevant particulars are as follows:
Appl. No. E/511/96 Appeal No. E/512/96
(i) Period of claim: 1.4.89 to 30.6.89 Period of claim: 1.7.89 to 30.9.89
(ii) Amount involved: Rs. 4.07,832.12 Amount involved: Rs. 3,11,422,92
(iii) Date of refund claim: 24.4.B9 Dt. of refund claim: 4.1.90
(iv)Dt. of S.C.N.: 22.11.89 Dt. of S.C.N. 4.1.90
(v) AC's Order: 5/90 dt. 15.2.90
(vi) SCN No./date: V/Ch. 25/18/3/89-Refund V/Ch. 28/18/7/89-Refund
dated 22.3.1994 dated 17.5.1994
(vi) AC's O-in-0 No. 143/94 dt. 30.6.94 O-in-0 No. 143/94 dt. 30.6.94
(vii) O-in-A No. 80-85 (TRY) dt. 30.6.95 O-in-A No. 80-85 (TRY) dt. 30.6.95
The above two appeals are not pressed by the appellants in view of their filing after the amendment with the relevant Section and in that view of the matter, these two Appeals E/511-512/96 are dismissed as not pressed.
3. In respect of the claims pertaining to the period 1.5.80 to 31.12.88, the appellants have given a table pertaining to the claims, date of refund claim, date of show cause notice, Order-in-Original, Order-in-Appeal and Final Order of the Tribunal. Thereafter, again the proceedings were initiated on the plea of the refund being hit by unjust enrichment. The details are extracted below: ________________________________________________________________________________________________________________________ SI. Period of Amount Date of Dates of Asstt Order of Order of the Show Cause Notice Asstt Commr. Appeal No cailm (Rs.) refund claim SCN Commr. the App. Tribunal No./Date Commr (Appeals) No. Order No./Authority No./Date 0-in-O O-in-A Date No/Date No/Date No/Date _________________________________________________________________________________________________________________________
1. 1.5.80 60,410.93 18.8.1980 5.9.1980 V/23/18/13/ 180/81 635/89-A C.No.V/23/18/13/80Kefund 177/94 80-85 E/506/96 to 80 12.5.1981 13.10.1989 24.6.1994 3.8.1994 30.6.1995 31.7.1980 12.11.1980
2. 1.8.1980 2,31,382.43 20.12.1980 31.1.1981 V/23/18/1/ 250/81(80) 130-132/C. No. V/23/18/181-Refund 178/94 80-85E/507/96 to 81 Md 90A 24.6.1994 3.8.1994 30.6.1995 30.11.1980 30.5.1981 21.9.1981 142.1990 3.1.12.1980 1,26,985.03 18.5.1981 27.5.1981 V/23/18/2/ 72/81 (Md) 130-132/ V/23/18/2/81/-Refund 175/94 80-85E/508/96 to 81 (Date illegible) 90A 24.6.1994 3.8.1994 (TRY) 30.4.1981 10.11.1981 142.1990 30.6.1995 4.1.5.1981 1,51,485.41 14.9.1981 22.9.1981 V/23/18/3 176/82 130-132/ V/23/18/3/81-Refund 176/94 80-85E/509/96 to 81 (Md) 90A 24.6.1994 3.8.1994 (TRY) 31.8.1981 14.61982 13.9.1982 142.1990 30.6.1995 5.1.10.1988 2,46,340.93 27.1.1989 22.9.1989 17/90 28/91 - V/Ch.25/18/4/89-Refund 179/9480-85E/510/96 to 12.3.1990 11.4.1991 12.6.1994 3.8.1994 (TRY) 31.12.1988 30.6.1995 _________________________________________________________________________________________________________________________
4. There is no dispute in the above matters about the Revenue not having agitated the issue before the Apex Court after the culmination of proceedings by passing of the orders by the Tribunal on merits and also holding that they are entitled for the refund in the matter in the respective orders of the Tribunal. As a consequence, the appellants were entitled to receive the cheques in due compliance of the Tribunal's order. However, the department's understanding was that as in the meantime, the Section 11B had been amended in respect of unjust enrichment, therefore show cause notices were issued on that plea. The appellants's contention was that in respect of all those proceedings where the matter had attained finality, the provision of unjust enrichment do not apply. The provision would apply only in respect of pending proceedings facing adjudication either before the Tribunal or before the Apex Court. They contend that in their own matter, the same plea had been raised by the department and the amounts had been credited to the Consumer Welfare fund and they challenged the same before the Tribunal and the Tribunal in their case as examined the question (Dalmia Cement (Bharat) Ltd. v. CCE, Trichy) examined the question in the light of the judgment of Mafatlal Industries Ltd. v. UOI and held that the provision of unjust enrichment would not apply in respect of orders which have attained finality and the department was bound to refund those claims. It was further added that the amended section did not have retrospective effect. The Apex Court in the case of Mafatlal Industries had clearly laid down to this effect and that has been noted in their own judgment.
5. Ld. counsel took us through the facts and records and pointed out from the judgment of the Apex Court and their own judgment that the issue is totally covered and the proceedings had attained finality by Tribunal allowing their appeals and therefore, question of again initiating proceedings on the grounds of unjust enrichment did not arise and hence the orders are bad in law. He submits that the issue has been clarified by the Tribunal in their own case and although the Revenue has appealed before the Apex Court, there is no stay granted and hence the Tribunal judgment in their own case is required to be applied. He submits that the Tribunal has clearly examined the Apex Court's judgment in Mafatlal Industries case which has clearly clarified that the provisions of unjust enrichment would not apply to matters which have attained finality. He also submits that this bench, in the case of India Cements Ltd. v. CCE, Coimbatore 2000 (36) RLT 705 examined the Mafatlal Industries case and the judgment of Tribunal rendered in their own case and upheld the assessee's contention and directed the department to make the payment. He submits that as the issue is covered, the five claims noted above be allowed.
6. Ld. DR, Shri S. Kannan, on the other hand, submits that the judgment of Dalmia Cements referred to by Sr. Counsel is pending before the Supreme Court. He further submits that as refund has not been granted to them till the passing of the amended provisions of Section 11B of the Central Excise Act, therefore it has to be presumed that their case also was deemed to be pending and not having reached finality, although the Revenue had not filed any appeal against the CEGAT's order.
7. On a careful consideration of the submissions made by both the sides, we are of the considered opinion that the issue is no longer res integra. The Apex Court in Mafatlal Industries case has clearly clarified and laid down that the doctrine of unjust enrichment would not apply to matters which have reached finality and in those cases the department is bound to make the refund. We have gone through the entire paragraphs of this aspect and the Tribunal has in the appellants' own case extracted para 146 and rejected the Revenue's contention and has directed the Revenue to refund the amounts as the issue had reached finality. The findings recorded in para 7 in the appellant's own case reported in 1998 (101) ELT 673 is extracted below:
7. We have considered the submissions and have perused the case law relied on by the parties. The admitted factual position in the case before us is that the present appellants had obtained an order allowing refund of Rs. 4,97,101.01 by Order No. 222/89, dated 6.6.1989 passed by the Tribunal. No appeal had been filed against the said order. The said order had thus become final. The Department had not implemented the order of the Tribunal when the amendment to the Central Excises and Salt Act was enacted with effect from 20.9.1991 which made it obligatory on the Department to credit all refund amounts to the Consumer Welfare Fund. The said amendment also applies to all pending cases of refund. Whereas the appellant's contention that the amended provisions did not apply to their case, the Department has contended that since the refund had not yet been effected, the matter was still pending as on 20.9.1991 and, therefore, the amended provisions would apply. The question really boils down to whether the non-payment of the refund claim which had been adjudicated in favour of the appellants would make it a pending proceeding. We find force in the Ld. Sr. Counsel's arguments that delay in execution of a judicial/quasi-judicial order by an administrative authority cannot be make it a pending proceeding. The non obstante clause in Sub-section (3) of Section 11B directing that no refund shall be made except as provided in Sub-section (2) and the further provision that it will apply to all proceedings pending on the date of coming into force of 1991 amendment cannot, in the vary nature of things, in our view, cover a case of the type before us. The observations in the majority judgment of the Apex Court in Mafatlal Industries case, supra, brings out the position very clearly. \Ne extract paragraph 146 which specifically covers the question before us:
146. As stated, Section 11B(2) and Section 11B(3) go together. The applications for refund made before the commencement of the Amendment Act, 1991, shall be deemed to have been made under Section 11B(1) of the Act as amended and it shall be dealt with in accordance with Section 11B(2) of the Act. The Section contemplates disposal of the applications pending on the date of the Amendment Act as also fresh application filed after the Amendment Act, 1991, as per the amended provisions. Counsel for the assessees urged that the provisions relating to refund and, in particular, Sections 11B(2) and (3) as amended in 1991 cannot apply to:
1. 'Refund' made or due as per orders passed by Courts, in a suit or in a petition under Article 226 of the Constitution of India, which have become final.
2. Refunds ordered by the statutory authority concerned which have become final.
It is obvious that in such cases no application can or will be deemed to be pending on the date of the commencement of the Amendment Act. No application praying for refund is to be filed in such cases, either. No further probe, regarding the requisites for obtaining refund specified in the Amendment Act, 1991, is called for in such cases. The above aspects are fairly clear. Sections 11B(2) and (3) cannot be made applicable to refunds already ordered by the Court or the refund ordered by the statutory authorities, which have become final. It follows from a plain reading of Section 11B, Clauses (1), (2) and (3) of the Act. The provisions contemplate the pendency of the application on the date of the coming into force of the Amendment Act or the filing of an application which is contemplated under law, to obtain a refund, after the Amendment Act comes into force. I am of the opinion, that if the said provisions are held applicable, even to matters concluded by the judgments or final orders of Courts, it amounts to stating that the decision of the Court shall not be binding and will result in reversing or nullifying the decision made in exercise of the judicial power. The Legislature does not possess such power. The Court's decision must always bind parties unless the condition on which it is passed are so fundamentally altered that the decision could not have been given in the altered circumstances. It is not so herein. Shri Prithvi Cotton Mills Ltd. and Anr. v. Broach Borough Municipality and Ors. 1970 (1) SCR 388 and Madan Mohan Pathak o. Union of India and Ors. etc. . See also Comorin Match Industries (P) Ltd. v. State of Tamil Nadu . Alternatively, it may be stated that duty paid in cases, which finally ended in orders or decrees or judgments of Courts, must be deemed to have been paid under protest and the procedure and limitation etc. stated in Section 11B(2) read with Section 11B(3) will not apply to such cases. It need hardly be stated, that Section 11B(1), the proviso thereto, Section 11B(2) and Section 11B(3) read together will apply only to (1) refund applications made before the Amendment of the Act and still pending on the date of commencement of Amendment Act, 1991 and (2) applications contemplated under law to obtain refund and filed after the commencement of the Amendment Act, 1991. (Cases dealt within Paras 5 and 29 of this judgment will not be covered, by the above, to the extent stated therein).
8. Having regard to the legal position as explained in the aforesaid paragraph, we hold that the impugned order cannot be sustained in law. The same is as result set aside and the present appeal allowed with consequential benefits to the appellants.
8. This bench again in the case of India Cements Ltd. followed the judgment of Mafatlal Industries case rendered by the Apex Court and the Tribunal's rulings in Dalmia Cements noted above and recorded the findings in para 5 as follows:
5. We have carefully concerned the rival submissions and records of the case. We find that the facts in this case are identical to the facts considered in the case of Dalmia Cement (Bharat) Ltd. Both the parties were adjudged to be eligible for refund by the Courts. In fact, in the case of Dalmia Cement (Bharat) Ltd., it was the Tribunal which had passed such an order, whereas in the instant case the order emanates from the Hon'ble Supreme Court. We further find on a perusal of the said order that it clearly shows that the Hon'ble Supreme Court held that the present appellants were entitled to refund of the full amount along with interest at the rate of six per cent per annum for the period for which the refund was not given. This language in the Hon'ble Apex Court's order clearly shows that the Hon'ble Court required that the actual amount should be paid back to the appellants along with interest as indicated therein. We further find that the question of applicability of amended Section of 11B particularly Sub-sections (2) and (3) thereof to refund was already considered a length by the Hon'ble Supreme Court in the case of Mafatlal Industries cited supra, wherein it had been clearly held that when there was an order emanating from a court on a refund claim and this order was passed prior to the coming into effect of the amended Section 11B, then the said law would not be applicable to this order of refund, as the refund claim already stood concluded. The same law was adopted by the Tribunal in the case of Dalmia Cement (Bharat) Ltd. Applying the same principle to the facts of the case, we find that the refund order having emanated from the Hon'ble Supreme Court along with interest due and this order having become final much before coming into force of amended Section 11B, the order impugned clearly errs in not having ordered the amount along with interest to be paid to the appellants and instead ordering that the amount to be credited to the said Welfare Fund. Applying the ratio of the aforesaid decisions, we, therefore, set aside the order impugned and allow the appeal, with consequential relief. We make it clear that when the refund was ordered to be given to the appellants by a Court of Law and that when this order had become final before the enactment of the amended Section 11B, then no one can legally make distinction between the order sanctioning on merits and the actual payment on merits. Therefore, the refund amount along with the interest due should be forthwith made available to the appellants. Ordered accordingly.
(Pronounced in open Court on 30.1.2001)
9. The ratio of the above judgment would clearly apply to the five claims which have been already extracted above and therefore the appeals arising in respect of those claims are allowed and the department is directed to make the refund in respect of those claims. The net result is that Appeal No. E/511/96 and E/512/96 are dismissed as not pressed and Appeal Nos. E/506 to 510/96 are allowed.