Custom, Excise & Service Tax Tribunal
Ms Shivam Udyog vs Cgst & Ce Kanpur on 3 October, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
(E-Hearing)
Excise Appeal No.70641 of 2021
(Arising out of Order-in-Appeal No. 224-CE-Alld-2021, dated -09/08/2021
passed by Commissioner (Appeals) CGST & Central Excise, Allahabad)
M/s Shivam Udyog, .....Appellant
(90-B, Co-operative Industrial Area,
Udyog Nagar, Kanpur, U.P.)
VERSUS
Commissioner, Central Excise & CGST, Kanpur
....Respondent
(7/117, Sarvodaya Nagar, Kanpur) APPEARANCE:
Shri Amit Awasthi, Advocate for the Appellant Shri Santosh Kumar, Authorized Representative for the Respondent CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.-70635/2024 DATE OF HEARING : 03.10.2024 DATE OF DECISION : 03.10.2024 SANJIV SRIVASTAVA:
This appeal is directed against the Order-In-Appeal No. 224-CE-Alld-2021, dated-09/08/2021 passed by Commissioner (Appeals) CGST & Central Excise, Allahabad. By the impugned order Commissioner (Appeals) has held as under:-
"4.2 I have carefully considered the rival submissions. In this case the order of the Additional Commissioner, Central Excise, Kanpur in the appellant's favour had been passed on 19.06.2017 and it is not under dispute that the refund claim filed on 31.01.2020 was beyond the limitation period of one year prescribed under Section 11B of the Central Excise Act, 1944 if calculated from 19.06.2017. The point of dispute is as to whether the limitation period prescribed under Section 11B would be applicable in this case not. The contention of 2 Excise Appeal No.70641 of 2021 the appellant is that in such a case, the limitation period will not apply. I do not agree with this contention. The Hon'ble Supreme Court in para 5 of its judgment in the case of Dena Snuff (P) Ltd. v. CCE, Chandigarh 2003 (157) E.LT. 500 (S.C.) after considering the Hon'ble Supreme Court's judgment in case of Mafatial Industries Ltd. v. Union of India (supra) has held that even when the duty has been paid under protest, the period of limitation would be start to run from the date of the final decision in the assessee's own case. In this case, the duty had been paid by the appellant voluntarily prior to the issue of the show cause notice and subsequently the demand was dropped by the Additional Commissioner, Central Excise, Kanpur and the order was not challenged before Hon'ble Tribunal Allahabad. Even if the payment of duty prior to adjudication order passed by the Additional Commissioner is treated as payment under protest, the protest ceases to exist once the Additional Commissioner's order dated 19.06.2017 was not challenged by the department. Therefore, in view of the Hon'ble Supreme Court's order in the case of Dena Snuff (P) Ltd. v.
CCE, Chandigarh, the relevant date for computing the period of one year would be the date of Additional Commissioner's order ie. 19.06.2017 and since the refund claim had been filed beyond the period of one year from this date, the same is time-barred.
4.3 I observe that Hon'ble Tribunal Ahmedabad in the case of Rachna Art Prints Pvt Ltd vs Surat-1 on 3 March, 2020 held that "As regard the submission of the Ld. Counsel that since the payment was made on insistence of the department such payment should be treated under protest. I agree with this submission of the appellant. However, the protest continued till the date of remand order. The refund itself has arisen after the tribunal has passed remand order dated 17.10.2011, which is relevant date for the refund under section 11B. After this date of remand order under protest if any, stand vacated, therefore, time limit of one year shall be reckoned from 17.10.2011 whereas refund claim was filed after almost more than four years hence, the same is clearly time-bar".
4.3.1 In the case of Collector of Central Excise, Chandigarh vs. Doaba Co-operative Sugar Mills 1988 (37) E.L.T. 478 (S.C.), the Hon'ble Apex Court held as under:-
"6. It appears that where the duty has been levied without the authority of law or without reference to any statutory authority or the specific provisions of the Act and the Rules framed thereunder have no application, the decision will be guided by the general law and the date of 3 Excise Appeal No.70641 of 2021 limitation would be the starting point when the mistake or the error comes to light. But in making claims for refund before the departmental authority, an assessee is bound within four corners of the Statute and the period of limitation prescribed in the Central Excise Act and the Rules framed thereunder must be adhered to. The authorities functioning under the Act are bound by the provisions of the Act. If the proceedings are taken under the Act by the department, the provisions of limitation prescribed in the Act will prevail".
4.3.2 The Hon'ble Tribunal Principal Bench, New Delhi in the case of Commr of CEX, Jaipur-II Vs M/s Evershine Marbles & Exporters Pvt Ltd | 2009 (240) E.L.T. 239 (Tri. - Del.)) held as under:
Refund Limitation Payment under protest, effect Favourable order by Commissioner (Appeals) on 26-3-2004 - Refund claim filed after expiry of two years - Duty paid prior to SCN, before adjudication
- Even if said payment is treated as protest payment, protest ceases to exist once Additional Commissioner's Order set aside by Commissioner (Appeals) on 26-3. 2004 - Relevant date for computing period of one year would be 26-3-2004
- Refund time barred - Revenue's appeal allowed - Section 11B of Central Excise Act, 1944. - The Hon'ble Supreme Court in para 5 of its judgment in the case of Dena Snuff (P) Ltd. (2003 (157) B.LT. 500 (S.C.)] after considering the judgment in case of Mafatlal Industries Ltd. (1997 (89) E.LT. 247 (S.C.)] has held that when the duty has been paid under protest, the period of limitation would start to run from the date of the final decision in the assessee's own case. [para 4] 4.3.3 The Hon'ble Tribunal South Zonal Bench, Chennai in the case of REDINGTON INDIA LTD Vs Commissioner of Customs Chennai [2011 (269) E.L.T. 233 (Tri. - Chennai)) held as under:
Refund - Limitation - Protest payment - Duty paid under protest on 27-12-2006 - Dispute decided on merits on 24-5-2007 and refund claim filed on 21- 2-2008 - Refund denied as barred by limitation because protest vacated when assessment finally decided - Fourth proviso to Section 27(1) of Customs Act, 1962 provides that where duty becomes refundable as consequence to judgment/order, limitation of 6 months be 4 Excise Appeal No.70641 of 2021 computed from date of such order - Provisions of second proviso to Section 27(1) ibid, providing for non-application of limitation in case of protest payment, requires to be read harmoniously with fourth provise ibid - Cause of protest came to end by resolution of assessment dispute, protest not survives beyond date of such order - Fourth proviso introduced on 11-5-2007 presently applicable. Refund to have been filed within 6 months from 24-5-2007 - Assessee's appeal dismissed [paras 6, 7].
4.3.4 The Hon'ble Supreme Court in the case of Dena Snuff Pvt. Limited vs. CCg Chandigarh - 2003 (157) ELT 500 (SC) has held that in case of any dispute on merits, the period of limitation would start to run from the date of final decision in assessee's own case. In view of the above judgment also it is clear that appellant could have filed the refund claim within one year from the date of Additional Commissioner's order by which the dispute on demand of duty was settled.
4.4 I observe that the appellant has relied upon following judgments of the Tribunals:
(i) M/s G.S Radiators Ltd Vs CCE Ludhiana (2005 (179)ELT 222 Tribunal -Del)]
(ii) M/s Laxmi Board & Paper Mills Ltd Vs CCE Mumbai (2007(208) ELT 384 (Tr- Mum))
(iii) M/s Bajaj Auto Ltd Vs CCE Aurangabad (2007(213) ELT, 577 (Tri-Mum)
(iv) M/s Nissan Copper Ltd Vs CCE Vapi (2015(329) ELT 843 (Tri-Ahmd))
(v) M/s Parle Agro Pvt Ltd Vs CCE Noida (2018(360) ELT 1005 (Tri-Alld)] I observe that there are various contrary judgment of the Tribunal in case of deciding time bar issue if amount has been deposited under protest. However, I observe that in recent judgement dated 03.03.2020 the Hon'ble Tribunal Ahmedabad in the case of Rachna Art Prints Pvt Ltd vs Surat-1 held that "the protest continued till the date of remand order. The refund itself has arisen after the tribunal has passed remand order dated 17.10.2011, which is relevant date for the refund under section 11B. After this date of remand order under protest if any, stand vacated, therefore, time limit of one year shall be reckoned from 17.10.2011 whereas refund 5 Excise Appeal No.70641 of 2021 claim was filed after almost more than four years hence, the same is clearly time-bar".
4.5 Thus, following the judicial pronouncement as well as discussion made in the foregoing paras, I hold that the impugned order passed by the Assistant Commissioner, CGST & Central Excise, Division-I Kanpur rejecting refund to the appellant is legal & proper and liable to be sustainable.
5. In view of the above, I upheld the impugned order dated 26.11.2020 of the adjudicating authority & reject the appeal filed by the appellant."
2.1 The Appellant have during the course of investigation deposited certain amount by two Challans dated 03.06.2014 & 09.06.2014. After completion of the investigation a show cause notice dated 23.05.2017 was issued to the Appellant but the proceedings were dropped by the first adjudicating authority namely the Additional Commissioner, Central Excise, Kanpur vide Order-In-Original No.20/ADC/CEX/2017 dated 19.06.2017.
2.2 Subsequent to the dropping of the proceedings so initiated, Appellant filed a refund claim on 31.01.2020 seeking refund of Rs.5 lakhs deposited by them vide above referred challans dated 03.06.2014 and 09.06.2014 during the course of investigation.
2.3 After scrutiny of the refund claim, a show cause notice dated 22.05.2020 was issued to the Appellant proposing to reject the refund claim on the ground of unjust-enrichment and limitation.
2.4 Jurisdictional Assistant vide Order in original dated 27.11.2020 adjudicated the show cause notice and rejected the refund claim filed.
2.5 Aggrieved Appellant filed appeal before the Commissioner (Appeals) which have been rejected vide the impugned order.
2.6 Hence this appeal.
3.1 I have virtually heard Shri Amit Awasthi, Advocate for the Appellant and Shri Santosh Kumar, Authorized Representative for the Revenue.
6 Excise Appeal No.70641 of 20213.2 Arguing for the Appellant learned counsel submits that the issue is no longer res-integra and he would rely upon the decision of Hon'ble Supreme Court in the case of Mafatlal Industries reported in 1997 (89) E.L.T. 247 (S.C), Kisan Cooperative Sugar Factory Ltd. reported in 2018 (8) G.S.T.L. 365 (All.), Commissioner, CGST & Central Excise V/s Raghunath International Ltd. reported in (2023) 2 Centax 216 (All.).
3.3 Learned Authorized Representative for the revenue reiterates the findings recorded in the impugned order.
4.1 I have considered the submissions made in the appeal and during the course of argument.
4.2 The entire issue for my consideration is in respect of admissibility of refund claim in terms of Section 11B of the Central Excise Act, 1944. Undisputedly the Appellant have deposited a sum of Rs 5,00,000/- vide challans referred earlier during the course of investigation under protest.
4.3 As the proceedings were dropped by the Original Authority, Appellant claimed this amount as refund which have been rejected on the ground of limitation and also on the ground of unjust enrichment.
4.4 The amount deposited by the Appellant by the challans continued to remain as deposited throughout. This amount was never appropriated as duty as the proceedings initiated against the Appellant were dropped by the Adjudicating Authority. The nature of such deposit was like an amount lying unutilized in the account current of the Appellant. Section 11B of the act provide as under:-
11B. Claim for refund of 2[duty and interest, if any, paid on such duty].-- (1) ...
(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 7 Excise Appeal No.70641 of 2021 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) .....;
(b) unspent advance deposits lying in balance in the applicant's account current maintained with the Principal Commissioner of Central Excise or Commissioner of Central Excise;
(c) ......;
(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) ......;
(f) .......:
Provided ......
(3) ......
(4) .......
(5) ......19
[Explanation.-- For the purposes of this section,-- (A) "refund" .......;
(B) "relevant date" means,--
(a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods,--
(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India, or
(ii) if the goods are exported by land, the date on which such goods pass the frontier, or
(iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India;
(b) in the case of goods returned for being remade, refined, reconditioned, or subjected to any other similar process, in any factory, the date of entry into the factory for the purposes aforesaid;8 Excise Appeal No.70641 of 2021
(c) in the case of goods to which banderols are required to be affixed if removed for home consumption but not so required when exported outside India, if returned to a factory after having been removed from such factory for export out of India, the date of entry into the factory;
(d) in a case where a manufacturer is required to pay a sum, for a certain period, on the basis of the rate fixed by the Central Government by notification in the Official Gazette in full discharge of his liability for the duty leviable on his production of certain goods, if after the manufacturer has made the payment on the basis of such rate for any period but before the expiry of that period such rate is reduced, the date of such reduction;
(e) in the case of a person, other than the manufacturer, the date of purchase of the goods by such person; (ea) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of Section 5-A, the date of issue of such order; (eb) in case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (ec) in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction;
(f) in any other case, the date of payment of duty.
4.5 From the perusal of the above section it is evident that amount claimed as refund which is attributable to unutilized balance in the account current could never have been hit by the limitation clause or clause of unjust enrichment. In the case of Deccan Shoppe Pvt. Ltd. [2020 (37) G.S.T.L. 185 (Tri. - Hyd.)] Hyderabad Bench has held as follows:
"10. The questions to be considered in this case are as follows :
(1) Whether the deposits made through challans which have not been utilized towards payment of duty can be claimed as refund under Section 11B;
(2) Whether in such cases, the provisions of Section 11B apply in toto or otherwise; and 9 Excise Appeal No.70641 of 2021 (3) What is the relevant date of reckoning the time limit in such cases?
11.As can be seen from clause (b) to proviso to sub- section (2) of Section 11B unspent advance deposits lying in balance in applicant's current account are covered by Section 11B. Once they are covered by Section 11B it is not open for anyone to pick and choose which portion of Section 11B applies to them and which does not. The entire provisions of Section 11B apply in the absence of any specific clause indicating otherwise. The next question is the relevant date for reckoning the time limit in such cases, which has been defined in the explanation to Section 11B. Clause (f) of this explanation covers the present case i.e., "in any other case, the date of payment of duty". Since the date of payment of duty has yet to begun in case where an amount has been deposited only in the account current but has not been utilized towards payment of Service Tax, the relevant date has not yet begun in this case. Consequently, application for refund is within the time limit and hence, needs to be sanctioned."
4.6 In the case of Ahmedabad Bench has held as follows:
"4. I have carefully considered the submission made by both sides and perused the records. I find that the Learned Commissioner (Appeals) rejected the refund claim on the ground that the limitation under Section 11B is applicable according to which the claimant should have filed the refund within the one year from date of payment. I find that in case of PLA balance, it is not deposited as a duty but it is deposited as advance towards the duty. The PLA Amount takes the colour of excise duty only when it is utilized for payment of duty on clearance of excisable goods. The unspent balance of PLA is only advance not duty therefore, Section 11B is not applicable. This Tribunal in various decisions held as under :-10 Excise Appeal No.70641 of 2021
Navdeep Packaging Industries - 2007 (210) E.L.T. 417 (Tri. - Mumbai) "Heard both sides.
2. The issue involved is whether the refund of unspent PLA balance is covered under Section 11B of the Central Excise Act, 1944. The Ld. Commissioner (Appeals) in his order has considered the provisions of Rule 9(1A) read with Rule 173G(1A) of the Central Excise Rules, 1944 which provides for withdrawal of amount from PLA by the Commissioner and the said power of Commissioner has been delegated to Assistant/Deputy Commissioner of Central Excise. The contentions of the Ld. Consultant for the appellant is that Section 11B of Central Excise Act, 1944 applies for refund of duty. This is not disputed by the Commissioner (Appeals). However, referring to clause
(b) of the proviso to sub-section (2) of Section 11B, the Commissioner records that unjust enrichment shall not apply to refund of unspent PLA balance, but at the same time he also records that he does not mean that the unspent PLA balance is duty. He has recorded that the said provision has been incorporated as an abundant precaution to ensure that even by mistake, the provision of unjust enrichment is not applied for such refund. He also records that since there is a specific provision for refund of PLA balance under Rules 9(1A) and 173G(1A) of the said Rules, therefore, such refund would be squarely covered under the said Rules and not under Section 11B of the Central Excise Act, 1944, which applies only for refund of duty. He has, therefore, recorded that the provisions of Section 11BB of the Central Excise Act, 1944 granting interest for delayed refund of duty is not attracted in the present case.11 Excise Appeal No.70641 of 2021
3. After hearing, perusal of the records and relevant provisions as mentioned above, I do not find any legal infirmity in the Order passed by the Commissioner (Appeals) so far as the applicability of Rule 9(1A) and Rule 173G(1A) of the Central Excise Rules, 1944, is concerned. The appeal filed by the appellant is, therefore, dismissed."
Jay Shree Tea & Industries Ltd. - 2005 (190) E.L.T. 106 (Tri. - Kolkata) '3. Ld. JDR supports the impugned order. A clarification was issued by the Board regarding refund of balance in PLA Account. The matter was examined in consultation with the Ministry of Law and it was advised by the Ministry that the amount in question may therefore be refunded to the applicant. CBE & CE No. 202/24/72-CX.6, dated 6-1-1973. The PLA is deposited by the party is adjusted from time to time and as such an amount in PLA which remain unutilized belonging to the party for which the Department has no claim and the limitation has no application on such deposit. The Rule 173G(1A) deals with the procedure to be followed by the assessee for withdrawal of money from PLA is as under :-
"Where an assessee keeping an account-current under sub-rule (1) makes an application to the Commissioner for withdrawing an amount from account-current, the Commissioner may, for reasons to be recorded in writing permit such assessee to withdraw the amount in accordance with such procedure as the Commissioner may specify in this behalf."
It is clear that for withdrawing an amount from such account-current only requires a permission from the Commissioner concerned. Neither the law of limitation nor the theory of unjust enrichment is applicable on such deposit. It is the money belonging to the 12 Excise Appeal No.70641 of 2021 appellant and has a right to withdraw it. There is a distinction between the amount appropriate towards duty and amount deposited for payment of a duty. In a former case duty which has only been levied and paid evidently becomes the property of the Government and no person would be entitled to get it back unless there is a provision of law to enable that person to get the duty already appropriated back from the State or the Government. In the latter case, however, when an amount has been deposited to be appropriated thereafter towards duty which may fall due there having no appropriation, the property in money does not pass to the Government unless the goods are cleared and the duty is levied. In present case the money deposited in PLA cannot be utilised due to withdrawal of Central Excise duty on Package Tea and Tea including Tea waste. The money belongs to the appellant over which the Department has no claim. The appeal deserves to be allowed. I therefore allow the appeal with consequential benefit to the Appellant.' Bijalimoni Tea Estate - 2007 (215) E.L.T. 63 (Tri. - Kolkata) "Ld. Counsel appearing for the appellants has submitted that there is only limited issue in these appeals to examine whether un-utilised deposit in PLA can be refunded to the depositor or not and whether such deposit is covered by Section 11B of the Central Excise Act, 1944.
2. Facts of the case throws light that the appellants had made deposit of Rs. 50,000/- (Rupees Fifty thousand only) on 31-12-2002 in United Bank of India (UBI), Siliguri towards discharge of the duty payable for removal of excisable goods. On 28-2-2003, there was an un-utilised deposit amount of Rs. 14,251/- to 13 Excise Appeal No.70641 of 2021 the credit of the appellants and when the appellants made an application for refund of such amount by virtue of exemption of duty on Tea & Tea Waste w.e.f. 1-3-2003, the claim of the appellants was denied.
3. Ld. DR for the Revenue submitted that if any refund of duty is claimed under Central Excise Act, 1944, due process of law as required under Section 11B of Central Excise Act, 1944, should be followed and the authorities have rightly rejected claim for the appellant. Meeting to such point, the Ld. Counsel has submitted that the Central Board of Excise & Customs has already issued instruction vide F. No. 202/24/72- CX. 6, dated 6-1-1978, in consultation with the Ministry of Law to the effect that un-utilised amount in PLA is refundable to the appellants and relying on this instruction, the appellant submitted that this Bench has already decided such matter in the case of Jay Shree Tea & Industries Ltd. v. Commissioner of Central Excise, Kolkata reported in 2005 (190) E.L.T. 106 (Tri. - Kolkata).
4. On the basis of the above decision, the appellants cannot be denied of justice and cannot be un-equally treated under law. It is judicial discipline that demands that unless that order of this forum is stayed by higher Courts or reversed by any such Court, order of this forum shall prevail and that should be followed unhesitatingly. I am inclined to agree to uphold majesty of law and follow judicial discipline and allow the appeal since the issue is no more res integra.
5. Both the appeals are allowed."
In view of the above decision along with board circular dated 6-1-1973 the appellant is entitled for the refund of PLA balance and limitation provided under Section 11B is not applicable."
14 Excise Appeal No.70641 of 20214.7 Reliance pleased by the Lower Authorities on the definition for relevant date as per Explanation B (ec) to Section 11B and seeking to reject on the ground of limitation by relying on the date of the order of adjudicating authority for determining period of limitation of one year from the date of that order of the Additional Commissioner dropping the demand is totally miss placed. This clause is applicable only if at any point of time this amount was appropriated as duty and had arisen as refund on account of any judicial order. This is also evident from the ER1 Return formats. I do not find any merits in rejection of the refund claim on the ground of limitation. Reliance placed in the impugned order on various decisions do not support the case of the revenue as these are the case where refund has arisen as a consequence of decision in the appeal etc. 4.8 As per proviso to Section 11B (2) the amount of unspent deposit lying as balance in the Appellant's account current is to be refunded to the Appellant without being credited to the consumer welfare fund. Thus such an amount can never be hit by the provisions of unjust-enrichment in terms of specific exemption provided in respect of such claims.
4.9 In view of the discussion as above I do not find any merits in the impugned order.
5.1 Appeal allowed.
(Operative part of the order is pronounced in the open court) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) Nihal 15 Excise Appeal No.70641 of 2021