Custom, Excise & Service Tax Tribunal
Jindal Pipes Ltd vs Ce & Cgst Noida on 18 August, 2023
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Excise Appeal No.70249 of 2020
(Arising out of Order-in-Appeal No.NOI-EXCUS-001-APP-1261-2019-20 dated
19/12/2019 passed by Commissioner (Appeals) Central Goods & Services Tax,
Noida)
M/s Jindal Pipes Ltd., .....Appellant
(Jindal Nagar, Hapur, U.P.)
VERSUS
Commissioner of Central Excise &
CGST, Noida ....Respondent
(CGST, Noida)
APPEARANCE:
Shri Rajesh Chhibber, Advocate for the Appellant
Shri Santosh Kumar, Authorised Representative for the Respondent
CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
FINAL ORDER NO.70070/2023
DATE OF HEARING : 18 August, 2023
DATE OF DECISION : 18 August, 2023
SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Appeal No.NOI-
EXCUS-001-APP-1261-2019-20 dated 19/12/2019 passed by
Commissioner (Appeals) Central Goods & Services Tax, Noida. By the
impugned order Commissioner (Appeals) has upheld the rejection of
the refund claim filed by the appellant for the reason that period for
which refund claim has been filed is not covered by the order of this
Tribunal on this subject.
2.1 Appellant is manufacturer of excisable goods and has been
availing facility of Cenvat credit.
2.2 It was observed that appellant had taken Cenvat credit on
Goods Transport Agency Services in respect of out ward
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Excise Appeal No.70249 of 2020
transportation of goods beyond the place of removal. Accordingly,
show cause notice was issued to the appellant for the period
December, 2004 to December, 2006. The demands made by the
show cause notice was confirmed by the Original Authority and by
the Commissioner (Appeals). However, CESTAT vide its Order
No.70421 of 2017 dated 05.04.2017 set aside the demand stating as
follows:-
"5. We find that the issue herein have been considered in
detail by Hon'ble Gujarat High Court in the case of
Commissioner of Central Excise Vs Philips Carbon Black Ltd.
reported at 2016 (44) STR 253 (Guj.). The Hon'ble High Court
has decided the issue in favour of the assessee, by observing
as follows:-
We must, however, for our curiosity 21. reconcile the
expression "from the place of removal" occurring in the earlier
part of the definition with words „up to the place of removal‟
used in inclusive part of the definition. Counsel for the
assessees submitted that when a manufacturer transports his
finished products from the factory without clearance to any
other place, such as godown, warehouse etc. from where it
would be ultimately removed, such service is covered in the
expression „outward transportation up to the place of removal‟
since such place other than factory gate would be the place of
removal. We do appreciate that this could be one of the areas
of the application of the expression „outward transportation up
to the place of removal‟. We are unable to see whether this
could be the sole reason for using such expression by the
Legislature.
Be that as it may, we are of the 22. opinion that the outward
transport service used by the manufacturer for transportation
of finished goods from the place of removal up to the premises
of the purchaser is covered within the definition of "input
service" provided in Rule 2(l) of the Cenvat Credit Rules,
2004.´
2.3 Appellant for the subsequent period i.e. January, 2007 to
March, 2008 had reversed the suomotu Cenvat credit taken by them
under protest subsequent to confirmation of the demand made by
the show cause notice by the Adjudicating Authority vide his order
dated 29.11.2007 and upheld by the Commissioner (Appeals) vide
order dated 17.03.2008. After the decision of the CESTAT (earlier)
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Excise Appeal No.70249 of 2020
appellant filed the refund claim for the period from December, 2004
to January, 2006 for Rs.10,40,170/- and also for an amount of
Rs.10,71,828/- for the period January, 2007 to March, 2008.
Adjudicating Authority vide his Order-in-Original
No.192/Refund/AC/HPR/2017-18 dated 31.01.2018 decided the
refund claim by stating as follows:-
ORDER
I hereby sanction refund of Rs. 10,40,170/- Rupees Ten Lacs Forty Thousands One Hundred Seventy Only), to M/s Jindal Pipes Ltd., Delhi-Hapur Road, Jindal Nagar, Hapur in terms of Section 11B of Central Excise, Act, 1944 and the sanctioned amount is to be transferred directly to their Bank Account in terms of Board Circular No.1013/1/2016-CX dated No.02/TECH/HPR/2016 dated 11.02.2016. 12.01.2016 and Trade Notice I also reject an amount of Rs. 10,71,828/- (Rs. Ten Lacs Seventy One Thousands Eight Hundred & Twenty Eight Only) for the period January- 2007 to March-2008 which was also suo motu reversed by the party under protest is not covered in the CESTAT Final Order No. A/70421/2017-EX (DB) dated 05.04.2017.
2.4 Commissioner (Appeals) by the impugned order upheld the rejection of the refund claim for the period January, 2007 to March, 2008. Hence, this appeal.
3.1 I have heard Shri Rajesh Chhibber learned Advocate appearing for the appellant and Shri Santosh Kumar learned Authorised Representative appearing for the Revenue. 4.1 I have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 For upholding the order of Original Authority, Commissioner (Appeals) has observed as follows:-
"5. I have gone through the facts of the case, evidence available on record, the submissions made in the grounds of appeal. as well as during the course of personal hearing.. The appellant has moved an application for condonation of delay of 06 days. I find that appeal was filed after expiry of appeal period of sixty days, but within a further period of thirty days. The appellant submitted that the delay in filing the appeal occurred because the appeal was sent to the counsel for final approval, however the counsel asked time as he 4 Excise Appeal No.70249 of 2020 wanted to make some changes, which resulted in delay of 06 days in filing the appeal.. This is a very lame excuse for not filing the appeal within the prescribed time limit. The appeal could have been rejected on this ground alone but the principles of jurisprudence call for judiciousness in exercising vested powers more so when it is discretionary. The application for condonation of delay is allowed and the appeal is taken up for decision on merits.
5.1 I find that the proceedings in the impugned order arose in compliance of CESTAT's Final Order No. 70421/2017-EX(DB) dated 05.04.2017 (F.O.). Vide the said Order, the CESTAT allowed the appeal and set aside the OIO with consequential benefits to the appellant in accordance with law.
5.2 I find that the Order In Original which was set aside by the CESTAT covered the period December 2004 to December 2006. The adjudicating authority was bound to comply with the CESTAT order, and thereby sanction the refund for the period covered in the said Final Order irrespective whether the issue has attained finality or not. I find that since the Order covered the period December 2004 to December 2006, therefore the sanction of refund was restricted only to the amount involved during the said period.
5.3 The appellant has contended that the case has attained finality therefore they are eligible to the refund of the amount paid under protest for subsequent period. As far as finality of the issue is concerned, in the instant case the department has accepted the Order on monetary grounds and not on merit.
Section 35R(2) of the Central Excise Act provides that "Where in pursuance of the orders or instructions or directions. (2) issued under sub-section (1), the Central Excise Officer has not filed an appeal, application, revision or reference against any decision or order passed under the provisions of this Act, it shall not preclude such Central Excise Officer from filing appeal, application, revision or reference in any other case involving the same or similar issues or questions of law"
5.4 Thus it follows that if no appeal is filed on monetary grounds, it is not a precedent for not filing appeal. Therefore, the contention of the appellant that the case has attained finality is neither legally nor technically correct. Since there is no Order for the subsequent period, the cause of a claim for refund or otherwise does not arise.
5.5 In view of the above discussions and findings, I find no infirmity in the findings of the Adjudicating Authority in the above decision. Accordingly I uphold the Order-in-Original No.192/Refund/AC/HPR/2017-18 dated 31.01.2018 and reject the appeal bearing No. 217/CE/NOIDA/APPL/NOI/2018-19 dated 27.04.2018 filed by the party."5
Excise Appeal No.70249 of 2020 4.3 It is undisputed that the credit reversal was made by the appellant under protest. In para-3 Assistant Commissioner has recorded as follows:-
"3. During the audit of the record of the party by the departmental officers on 19.01.2006 for the period December- 2004 to January-2006, it was observed that the party had availed inadmissible Cenvat Credit of Rs.7,53,118/- of the Service Tax & Rs. 15,060/- of the Education Cess paid on outward freight on finished goods dispatched to independent buyers i.e. other than consignment agent and depots on regular basis. On being pointed out, the party debited the amount of inadmissible Cenvat Credit Rs.7,53,118/- of the Service Tax & Rs. 15,060/- of the Education Cess from their Cenvat Credit account, under protest'. The party had also reversed Cenvat Credit for the further period from January- 2006 to Dec. 2006 amounting to Rs.2,66,660/- of Service Tax & Rs.5,332/- of the Education Cess in the same month in which they had availed the credit. Accordingly, a show cause notice C.No. V(15)Adj./M-II/04/07/998 dated 02.02.2007 was issued to the party for the period from December-2004 to January- 2006 proposing to recover the Cenvat credit of the service tax paid on outward freight amounting to Rs.7,56,577/- (Rs.7,53.118/- Service Tax & Rs. 15,060/- Ed. Cess) alongwith interest and to impose penalty. On the similar issue, another SCN C.No. V(30)ST/HPR/36/2007/604-06 dated 07.02.2007 was issued by the Assistant Commissioner, Central Excise, Division- Hapur amounting to Rs.2,83,793/- (Rs.2,78,034/- Service Tax and Rs. 5,759/- Education Cess) for the subsequent period of Jan-2006 Dec. 2006. The adjudicating authority vide Order-in-Original no. 29-30/JC/M-II/2007 dated 29.11.2007 disallowed the said Cenvat credit and appropriated the amount of Rs.10,40,170/- which the party had reversed under protest'. Besides, the order also confirmed the demand of interest on the said amount and imposed penalty upon the party."
4.4 From the observations as above, it is evident that the amount sought to be denied in the refund proceeding was not paid voluntarily by the appellant but was a payment made on being pointed out by the audit under protest for the period January, 2006 to December, 2006. Show cause notice was issued to the appellant and for subsequent period i.e. from January, 2007 to March, 2008 no show cause notice has been issued. The protest made for payment 6 Excise Appeal No.70249 of 2020 has been adjudicated for a period till December, 2006 as per the Revenue. It is not understood why any show cause notice was not issued in respect of the subsequent period.
4.5 Revenue seeks to reject the refund claim for the period from January, 2007 to March, 2008 only for the reason that this amount is not covered by the show cause notice issued to the appellant for earlier period and hence not covered by that CESTAT Order. Commissioner (Appeals) observes that as the order of CESTAT has not accepted only on monitory grounds it cannot be applied for the subsequent period in view of the Section 35 R of Central Excise Rules, 1944. However, he is totally silent about disposal of the protest made by the appellant at the time of reversal of the credit for the subsequent periods. If the said protest is to be disposed of it will have to be only in terms of the decision of the CESTAT referred. Accordingly, this amount will have to be adjudged also in the light of the CESTAT Order. It is settled law that the amounts deposited till the time they are appropriated as arrears of demands continue to be deposited and have to be dealt accordingly. I find a plethora of case laws on this subject which clearly say that amounts deposited under protest needs to be refunded or appropriated after disposing of the protest. In the present case neither has been done, the amount deposited is sought to be retained by the way of orders of the lower authority. Hence, the same are contrary to the provisions of Article 265 of the Constitution of India which provide that "no taxes can be collected without authority of law."
4.6 In case of Industrial Mineral Co. (IMC) [2018 (361) E.L.T. 669 (Mad.)], in similar circumstances Hon'ble Madras High Court has held as follows:
"8. Admittedly, the petitioner has paid the duty under protest @ 10%. But the appropriate duty would be 5% from 1-3-2013 vide Notification No. 15/2013-Cus., dated 1-3-2013 and 2.5% from 1-3-2015 vide Notification No. 8/2015-Cus., dated 1-3- 2015. When a decision was taken by the Higher Judicial Forum, it is binding on the subordinate authorities. The Tribunal, admittedly, held that the duty is not leviable @ 10% as claimed by the appellant, but, it is only leviable under CH 2614 00 20, 7 Excise Appeal No.70249 of 2020 as per the Notification issued by the Department then and there.
9. It is well-settled that the duty paid by the assessee under protest, if ultimately found, was not leviable, it would automatically entitle him for refund. The payment under protest by itself would tantamount to claiming refund, but, it cannot be turned down merely because he has not filed any appeal or appeal was filed by the Department before a higher forum.
10. In similar circumstances, while dealing with the matter relating to the petitioner, this Court in W.P. (MD) No. 2140 of 2018, dated 22-3-2018, has observed that the Adjudicating Authority himself had mentioned that the case of the petitioner is similar to that of V.V. Minerals v. Commissioner of Customs, Tuticorin. The appeal filed by him against that case, is yet to reach finality and there is no stay against the judgment of the Tribunal. Further, the goods covered under shipping bills of the petitioner were rightly classifiable under CH 2614 00 20 of CTH. The writ petition was allowed in favour of the petitioner.
11. In view of the decision of the Tribunal, the petitioner is entitled to get refund. Since a binding decision has not been followed by the Adjudicating Authority in this case, this Court can interfere straight away without relegating the assessee to file an appeal.
12. In this view of the matter, the impugned order passed by the second respondent in C. No. VIII/20/249/2017-RF, dated 27-10-2017 shall stand quashed."
4.7 In Electro Steel Castings Ltd. [2014 (299) E.L.T. 305 (Mad.)], Hon'ble Madras High Court has observed as follows:
4. The Appellate Authority, on detailed analysis of facts involved and the circumstances under which the duty was paid for the subsequent period and refund claim was made on 15-4-
1999, accepted the claim of the assessee that in view of the observation of the CEGAT in the decision reported in 1988 (33) E.L.T. 591 (T), M/s. Engineering Projects (India) Ltd. v. CCE, Calcutta, duty paid during the pendency of appeal proceedings 8 Excise Appeal No.70249 of 2020 should be treated as "paid under protest" and the refund claim made for the subsequent period should be treated as in continuation of the earlier claim and hence the time-limit as per Section 11B was not attracted. The First Appellate Authority allowed the appeal by directing the lower authority to grant refund of duty, after verifying all other aspects. Aggrieved by this, the Revenue went on appeal before the Customs, Excise and Service Tax Appellate Tribunal. Applying the decision of the Apex Court reported in 1997 (89) E.L.T. 247, the Tribunal rejected the Revenue's appeal. Hence, the present appeal before this Court by the Revenue.
5. Thus, the determination of substantial question of law involved herein depends upon the question of limitation to make any refund claim, which inturn depends upon the mode of payment of duty under protest or not under protest? While according to the Revenue, the payment of duty is without any protest, the assessee's categorical stand is that it is deemed to be paid under protest.
6. Both the Revenue and assessee relied on the same decision of the Apex Court in the case of Mafatlal Industries Ltd. reported in 1997 (89) E.L.T. 247 (S.C.) in respect of their respective contentions whether the refund claim was made under protest or not.
7. Though it is sought to be contended on the side of the Revenue that the decision of the Supreme Court in the case cited above is more applicable to the case of the Revenue, we are not inclined to accept the same. The Apex Court in para 83 under an identical situation, dealt with the same issue, wherein also payment was made, when the assessee has been contesting the levy of duty for the earlier period. The Supreme Court is compelled to say that-
"Now, where a person proposes to contest his liability by way of appeal, revision or in the higher courts, he would naturally pay the duty, whenever he does, under protest. It is difficult to imagine that a manufacturer would pay the duty without 9 Excise Appeal No.70249 of 2020 protest even when he contests the levy of duty, its rate, classification or any other aspect..."
That being the categorical observation of the Supreme Court, the same is squarely applicable to the facts of the present case in favour of the assessee, wherein also, the payment of duty was made only during the pendency of appeal against very levy of duty for the earlier period.
8. In other case reported in (2004) 13 SCC 113 = 2003 (157) E.L.T. 500 (S.C.) [Dena Snuff (P) Ltd. v. Commissioner of Central Excise, Chandigarh] relied on by the Revenue, the Supreme Court has in para 5 dealt with the issue relating to actual dispute involved herein, but the same relates to cause of action. In that case, the Hon'ble Supreme Court was called upon to decide starting date of period of limitation, whether it is from the date on which identical third party's case or the assessee's own case was finally decided by the Tribunal. In the case cited above, the payment was made under protest and the assessee originally classified the products under sub-heading 2404.60. Whereas, the Revenue classified the products under sub-heading 2404.50. The CESTAT in the case of another assessee held the same product to be classifiable under the Heading 2404.60 and the same was accepted by the Tribunal in favour of the assessee. On the basis of such decision, the appellant filed the application for refund of the duty paid under protest. In the meanwhile, the assessee's own case involving same issue came to be decided on 28-8-2003 in favour of the assessee on the basis of the identical finding that the assessee's product would be classifiable under sub-heading 2404.60 and not under 2404.50. When the question to be determined whether the cause of action for refund claim arises after disposal of the assessee's own case or after disposal of the third party-assessee's case, the Hon'ble Supreme Court in para 5 held that the relevant date from which the period of limitation starts to run is from the date on which the assessee's own case finally decided by the Tribunal i.e. on 28-8-2003. Nevertheless, it is held that the payment of duty was made 10 Excise Appeal No.70249 of 2020 under protest was within time and no limitation was applicable to the refund claim of such duty and refund was hence ordered and the same was also upheld by the Supreme Court.
9. Thus, the facts involved in both the cases decided by the Supreme Court were identical and the Supreme Court, while dealing with the issue relating to period of limitation, uniformly held that no limitation was applicable to the payment made under protest. The Hon'ble Supreme Court in the earlier judgment clearly observed that the payment made, when the assessee has been challenging the earlier levy of duty, is deemed to be under protest and not otherwise. Hence, the combined appreciation of both the cases decided by the Supreme Court would lead to an irresistible inference that the payment made herein is also deemed to be under protest and no limitation is applicable and the claim is maintainable and is rightly decided by the CESTAT."
4.7 In view of the above discussions, I do not find any merits in the impugned order, set aside the same.
5.1 Appeal is allowed.
(Operative part of the order pronounced in open court) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp