Custom, Excise & Service Tax Tribunal
M/S Ahmedabad Packaging Industries Ltd vs Commissioner Of Central Excise, ... on 27 March, 2018
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad ~~~~~ Appeal No : E/1483/2010 (Arising out of OIA No. 192/2010(Ahd-I)CE/MM/Commr(A)/Ahd dated 30.06.2010 passed by Commissioner (Appeals), Central Excise, and Service Tax-Ahmedabad) M/s Ahmedabad Packaging Industries Ltd. : Appellant (s) Vs Commissioner of Central Excise, Ahmedabad : Respondent (s)
Represented by:
For Appellant (s) : Shri Amal Paresh Dave, Advocate For Respondent (s): Shri J. Nagori, AR CORAM :
Dr. D. M. Misra, Hon'ble Member (Judicial) Date of Hearing: 20.03.2018 Date of Decision:27.03.2018 ORDER No. A/10601 / 2018 Per : Dr. D. M. Misra This is an appeal filed against the order-in-appeal No. 192/2010(Ahd-I)CE/MM/Commr(A)/Ahd dated 30.06.2010 passed by Commissioner (Appeals), Central Excise, and Service Tax-Ahmedabad.
2. Briefly stated the facts of the case are that consequent to the decision, on the disputed classification of HDPE Tapes, in favour of the appellant, they became eligible to refund of the duty paid on such HDPE Tapes, during the period 22.04.1986 to 31.03.1992. Consequently, they filed refund claim in August/September 1994. The refund claim though sanctioned, but, was transferred to Consumer Welfare Fund, on the ground of unjust enrichment. On appeal against the said order, the Ld. Commissioner (Appeals) vide order dated 05.04.1999, set-aside the order of the Adjudicating Authority and observed that the principle of unjust enrichment would not be applicable to goods captively consumed and allowed the refund claim. Subsequently, the refund claim of Rs. 70,80,080/- was sanctioned to the appellant on 27.10.1999. Aggrieved by the order, the Revenue filed an appeal before the Tribunal and the case was remanded to the Assistant Commissioner to examine whether the incidence of duty claimed as refund had been passed on to others or otherwise. After thorough scrutiny of facts and evidences produced by the appellant, the Assistant Commissioner sanctioned the refund to the appellant on 24.02.2006 observing that the principle of unjust enrichment is not applicable to the refund amount. The appeal filed by the Revenue against the said order was dismissed by the Ld. Commissioner (Appeals) by order dated 02.04.2007.
3. Also, in the meantime, the appellant after receipt of the refund claim on 27.10.1999, filed their claim on 03.11.1999 for interest amounting to Rs. 44,28,444/- on the delay in sanctioning/receiving the refund amount for the period from 26.08.1995 to 26.10.1999. The said interest was sanctioned by the Adjudicating Authority in its order dated 30.04.2008. Aggrieved by the said order, Revenue filed an appeal before the Ld. Commissioner (Appeals). Also, a SCN was issued to the appellant on 03.03.2009 for recovery of the interest amount of Rs. 44,28,444/-. The Ld. Commissioner (Appeals), set-aside the order, which allowed interest to the appellant and allowed the Revenues appeal. Aggrieved by the said order, the appellant filed an appeal before this Tribunal. The Tribunal vide Order No. A/11063/2016 dated 29.09.2016 decided the issue in favour of the appellant, observing that interest is admissible after expiry of 3 months from the date of filing the claim i.e.from 26.05.1995. The SCN issued for recovery of the interest sanctioned was confirmed vide order dated 31.12.2009. Aggrieved by the said order, the appellant filed appeal before the Ld. Commissioner (Appeals), who inturn, upheld the order of the Adjudicating Authority. Hence, the present appeal.
4. Ld. Advocate Shri Amal Paresh Dave for the appellant submits that two parallel proceedings for recovery of the interest amount by order dated 30.04.2008 had been initiated; one by way of filing appeal under Section 35A of CEA, 1994, and the second by issuing SCN for recovery of the erroneously refunded interest amount on 03.03.2009. It is his contention that their appeal against the order-in-appeal passed by the Ld. Commissioner (Appeals) setting the adjudication order sanctioning the refund of interest has been decided by this Tribunal vide order dated 29.09.2016, in their favour, therefore, the said order ought to be followed in deciding the demand for recovery of interest arising out of the same order of the adjudicating authority. It is his contention that the admissibility of interest on delayed refund has already attained finality by the order dated 29.09.2016, therefore, to examine the issue again and arrive at a different conclusion, in disposing the present appeal, arising out of confirmation of the demand notice for recovery of the interest, would hit the principle of res-judicata.
5. Per contra, the Ld. AR for the Revenue on the other hand has submitted that before this Tribunal, while deciding the issue of admissibility of interest for the period after expiry of three months from 26.05.1995, the relevant facts had not been considered and the order was passed. It is his contention that the order is sub-silentio, hence, cannot be considered a binding precedent; therefore, this Tribunal is free to decide the issue on the basis of facts, relevant to the claim of interest pertaining to the period 26.08.1995 to 26.10.1999.
6. It is his contention that at the time of sanctioning of the refund claim by the Adjudicating Authority in his order dated 30.04.1996, a categorical observation was recorded to the effect that the appellant has not produced any evidences to establish the fact that the burden of duty claimed as refund has not been passed on to others. They simply argued that the principle of unjust enrichment would not be applicable for goods captively consumed, and the Ld. Commissioner (Appeals) in its order dated 05.04.1999 accepting the said contention following the judgement of the Honble Bombay High Court in the case of Solar Pesticides Pvt. Ltd. Vs. UOI 1992 (57) ELT 201 (Bom.) allowed their appeal. On an appeal filed by the Revenue against the order of the Ld. Commissioner (Appeals), the case was remanded by the Tribunal to the Adjudicating Authority on 11.02.2002 to examine the issue of unjust enrichment after affording an opportunity to the appellant. Consequently, as is evident from the order dated 24.02.2006, the appellant for the first time had adduced evidences before the Adjudicating Authority by way of Chartered Accountants Certificate, Copies of Balance Sheet of the relevant year etc., in establishing the fact that the incidence of duty claimed as refund was borne by them and not passed on to their customers. It is his contention that therefore the appellant are not eligible to interest for the period 26.08.1995 to 26.10.1999, since, during this period the issue of unjust enrichment had not been established by the appellant by producing documents/evidences, hence, the refund amount was transferred to Consumer Welfare Fund. It is his further contention that therefore the judgement of the Honble Gujarat High Court in the case of Purnima Advertising Agency Pvt. Ltd. Vs. UOI 2016 (42) STR 785 (Guj.) is not applicable to the facts of the present case. Elaborating his argument further and referring to the observation of the Honble Gujarat High Court, the Ld. AR has submitted that at Para 9 of the said judgement it has been observed that all the evidences relating to unjust enrichment were produced before the authorities by the petitioner, and the authorities took a view that burden of duty had been passed on to others, which did not find favour from the appellate forum. Thus, for no fault of the appellant, in transferring the amount to Consumer Welfare Fund, the Honble High Court, has directed to allow interest for the period of the refund amount transferred to Consumer Welfare Fund. Also, the Ld. AR for the Revenue has referred to the judgement of Honble Bombay High Court in the case of Kadamba Transport Corporation Ltd. Vs. Commissioner of Central Excise, Goa 2017-TIOL-2197-HC-MUM-CX.
7. Heard both sides and perused the records. It is not in dispute that the refund amount was sanctioned to the appellant on 30.04.1996 by the Adjudicating Authority, but, transferred to the Consumer Welfare Fund, as the appellant failed to establish that the burden of duty has not been passed on to others. The said order was reversed on appeal and the amount was paid to the appellant on 27.10.1999. Later, the appellant claimed interest on 03.11.1999 for the period from 26.08.1995 to 26.10.1999 for the delay in refunding the amount to them. The said interest amount was sanctioned to them on 30.04.2008 by the Adjudicating Authority. The department aggrieved by the said order initiated action to recover the interest by filing appeal against the said order and also issued demand notice alleging the erroneous refund of interest. The appellate proceedings against the said order dated 30.04.2008 concluded in favour of the appellant by order of this Tribunal dated 29.09.2016. The second proceeding i.e. demand notice was confirmed against the appellant by both the authorities below now is a subject matter dispute. The Ld. Advocate for the appellant submits that since the issue admissibility of interest for the period from 26.08.1995 to 26.10.1999 has been conclusively decided in their favour by this Tribunal, the same should be followed and binding for the present proceeding. The Revenue on the other hand submitted that while deciding the issue in favour of the appellant, this Tribunal had not considered certain facts, if the same are considered now the appellant would not be eligible to the interest amount for their default. It is the contention of the Revenue is that the refund claim was though sanctioned in 1996, but, transferred to Consumer Welfare Fund, as the appellant failed to establish that the burden of duty claimed as refund was not passed on to others, which they could establish only in the remand proceeding before the Adjudicating Authority in the year 2006, by adducing evidences in this regard. Thus, the ratio laid down by the Honble Gujarat High Court in Purnima Advertising Agency Pvt. Ltds case (supra) cannot be made applicable to the facts of the present case. From the facts on record, I do not find force in the contention of the Revenue inasmuch as the Ld. Commissioner (Appeals) in its order dated 05.04.1999, following the judgement of the Honble Bombay High Court in Solar Pesticides Pvt. Ltds case (supra) observed that principle of unjust enrichment is not applicable to the goods captively consumed. Needless to emphasise that was the Rule of Law prevailed at the relevant point of time in view of the principle settled by the Honble Bombay High Court in Solar Pesticides Pvt Ltds case (supra) on the applicability of unjust enrichment of gods to captively consumed goods. Consequent to the principle laid down by the Honble Supreme Court in the case of UOI Vs. Solar Pesticides (P) Ltd. 2000 (116) ELT 401(SC), observing that the principle of Unjust enrichment is applicable to refund of duty on goods captively consumed, this Tribunal remanded the matter to the Adjudicating Authority with the liberty to the appellant to produce evidences to establish that the incidence of duty has not been passed on to others. Consequently, the appellant produced the evidences before the Adjudicating Authority and established that the incidence of duty has not been passed on to others. In these circumstances, I do not find any basis for denying interest on delayed refund to the appellant as held by this Tribunal while disposing their appeal vide order dated 29.09.2016, following the ratio laid down by Honble Gujarat High Court in Purnima Advertising Agency Ltds case (supra). In the result, the impugned order is set-aside and the appeal is allowed with consequential relief, if any, as per law.
(Order pronounced on 27.03.2018) (D. M. Misra) Member (Judicial) G.Y. 7 Appeal No. E/1483/2010