Custom, Excise & Service Tax Tribunal
Sandhya Marines Limited vs Chennai -Port Export on 7 January, 2025
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT No. III
(i) Customs Appeal No. 42210 of 2013
with
Customs Miscellaneous Application No. 40367 of 2023
(Arising out of Order-in-Appeal Nos. 1017 to 1020 / 2013 dated 22.07.2013 passed by
Commissioner of Customs (Appeals), Custom House, No. 60, Rajaji Salai, Chennai - 600 001)
M/s. Sandhya Marines Limited ...Appellant
No. 32, Pandurangapuram,
Visakhapatnam - 530 003.
Versus
Commissioner of Customs ...Respondent
Chennai Export Commissionerate,
No. 60, Rajaji Salai,
Custom House,
Chennai - 600 001.
WITH
Sl. Appeal Nos. Appellants
Nos.
(ii) C/42213/2013
with M/s. Sai Marine Exports P. Ltd.
C/MISC/40368/2023
(iii) C/42214/2013
with M/s. Premier Marine Products
C/MISC/40421/2023
(iv) C/42215/2013
with M/s. Kader Exports Pvt. Ltd.
C/MISC/40424/2023
(v) C/42228/2014
with M/s. Sagar Grandhi Exports Pvt.
C/MISC/40422&40425/2023 Ltd.
(vi) C/42229/2014
with M/s. G.V.R. Exports Pvt. Ltd.
C/MISC/40423/2023
(vii) C/40766/2015 M/s. Devi Sea Foods Ltd.
APPEARANCE:
For the Appellants : Shri R. Asokan, Advocate (Sl.No. 1-6)
Shri Anil Kumar Bezawada, Advocate (S.No. 7)
For the Respondent : Shri Anoop Singh, Authorised Representative
2
CORAM:
HON'BLE MR. P. DINESHA, MEMBER (JUDICIAL)
HON'BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)
FINAL ORDER Nos. 40031-40037 / 2025
DATE OF HEARING : 22.10.2024
DATE OF DECISION: 07.01.2025
Per Mr. VASA SESHAGIRI RAO
Customs Appeals Nos. C/42210/2013, C/42213/2013,
C/42214/2023 and C/42215/2023 have been filed by Appellants Viz. M/s.
Sandhya Marines Ltd. (A1), M/s. Sai Marine Exports Pvt. Ltd. (A2), M/s.
Premier Marine Products (A3) and M/s. Kader Exports Pvt. Ltd. (A4) assailing
the impugned Order-in-Appeal No. 1017-1020/2013 dated 22.07.2015
passed by Commissioner of Customs (Appeals), Custom House, Chennai
rejecting the refund claims of Rs.1,11,34,359/-, Rs.1,06,39,247/-,
Rs.54,49,887/- and Rs.1,04,66,992/- respectively of A1 to A4 above, which
were earlier sanctioned by the Refund Sanctioning Authority.
1.1 Similarly, Customs Appeals Nos. C/42228/2014 and
C/42229/2014 have been preferred by Appellants Viz. M/s. Sagar Grandhi
Exports Pvt. Ltd. (A5) and M/s. G.V.R Exports Pvt. Ltd. (A6) respectively,
aggrieved by the Order-in-Appeal No. 1600&1601/2014 dated 28.08.2014
passed by Commissioner of Customs (Appeals), Custom House, Chennai for
rejecting the refund claims of Rs.1,19,95,259/- and Rs.30,03,913/-
respectively of A5 and A6 above, which were earlier sanctioned by the
Original Refund Sanctioning Authority.
3
1.2 Customs Appeal No. C/40766/2015 has been filed by Appellant
Viz. M/s Devi Sea Foods Ltd. (A7), aggrieved by the Order-in-Appeal No.
352/2014 dated 24.12.2014 passed by Commissioner of Customs (Appeals),
Custom House, Chennai rejecting the refund claim of Rs.2,54,18,057/- which
was earlier sanctioned by the Deputy Commissioner of Customs (Refunds),
Custom House, Chennai.
1.3 All these seven appeals filed by A1-A7 as detailed below are
being taken up together for issuance of a common order, as the issues
involved are identical and similar contentions were raised by the opposing
sides.
Details of Impugned Order-in- Order-in- Date of Period of
the Appeal Original filing Export for
Appellant No./date Refund which refund
claim claimed
A1 Order-in-Appeal No. 15029/2011 dt. 11.11.2005 1998-1999 to
1017-1020/2013 dated 07.03.2011 2004-05
22.07.2015
A2 Order-in-Appeal No. 15030/2011 dt. 26.05.2005 1998-1999 to
1017-1020/2013 dated 01.03.2011 2004-05
22.07.2015
A3 Order-in-Appeal No. 15983/2011 dt. 25.02.2005 2000-2004
1017-1020/2013 dated 18.05.2011
22.07.2015
A4 Order-in-Appeal No. 15987/2011 dt. 25.02.2005 2000-2004
1017-1020/2013 dated 18.05.2011
22.07.2015
A5 Order-in-Appeal No. 16474/2011 dt. 06.11.2008 1998-1999 to
1600&1601/2014 dated 22.06.2011 2004-05
28.08.2014
A6 Order-in-Appeal No. 16766/2011 dt. 06.11.2008 1998-2004
1600&1601/2014 dated Nil
28.08.2014
A7 Order-in-Appeal No. 352 16802/2011 dt. 11.02.2005 1998-1999 to
/2014 dated Nil 2004-05
241.12.2024
4
5
2.1 Issues culled out from the appeals are that the Appellants
engaged in the business of exporting marine products were exporting
Prawns/Shrimps during the period from 1998-1999 to 2004-2005 and as the
department contested that Shrimps/ Prawns were fish on which cess was
payable, the bills were assessed and the Appellants to have remitted Cess
of 0.5% which is leviable for export of fish under the provisions of
6
Agricultural Produce Cess Act, 1940 during the period between 1998-1999 to
2004-2005. The exporters of Prawn / Shrimp products filed a batch of writ
petitions before the Hon'ble High Court of Andhra Pradesh which allowed the
appeals by holding that cess could not be levied since Prawns/ Shrimps were
different from fish. On appeal by the Department, the Hon'ble Supreme
Court by its judgement in Commissioner of Customs Vs. Jaya Satya Marine
Exports Pvt. Ltd. [2001 (131) ELT 3 (SC)] and in Civil Appeals No. 5179-
5184/2019, 3155-3156/2012 dismissed the appeals filed by the Department
by confirming that cess could not be levied on the export of prawns /
shrimps and relegated the matter to be resolved by the Appellate Authority.
The Appellants filed similar writ petitions before the Hon'ble High Court of
Madras which directed them to find remedies by filing an appeal before the
appellate authority following the Apex Court's judgement. Accordingly,
appeals were filed before the Commissioner (Appeals) who held that cess is
not leviable on export of prawns/ shrimps as they were not fish and allowed
the appeals with consequential relief of refund of cess collected on the
export of prawns/ shrimps subject to verification of unjust enrichment. The
Department, then preferred a batch of appeals against the impugned orders
before the CESTAT which dismissed the departmental appeals in C/141-
144/2004, C/295-297/2004, C/305-310/2004, C/115-132/2005 & C/136-
142/2005 vide Final Order Nos. 957-961/2007 dated 02.08.2007 and 1030-
1035/2006 dated 10.11.2006, etc. and upheld the impugned orders passed
by the Appellate authorities. Against the said decisions of Hon'ble CESTAT,
the department preferred appeals in CMA No. 212-223 of 2007 and 2370-
2394 of 2007 before the Hon'ble High Court, Madras which vide order dated
04.07.2008 dismissed the appeals preferred by the department in [2008
7
(230) ELT 225 (Mad.)] and confirmed the orders passed by the Appellate
Authority and this Tribunal holding that Prawns / Shrimps are different from
"Fish" and cess could not have been collected on their exports. The Civil
Appeals preferred by the department to the Hon'ble Supreme Court also
were dismissed by order dated 11.08.2022 in Civil Appeals Nos. C.A No.
3047-3083 of 2012 and SLP No. 16838-16874/2009. Hence it finally gets
settled judicially that Prawns/ Shrimps were not "fish" and so export cess is
not leviable.
2.2 Thereafter, the Appellants filed refund claims before the
adjudicating authority who held that the department had collected Cess
without authority of law and as the refund claims were outside the scope of
Section 26 and 27 of Customs Act, 1962, the claims were not time barred
and by considering them as deposits, based on the Chartered Accountant's
Certificates, concluded that there was no unjust enrichment and sanctioned
the refund claims. Thereafter, the Department preferred an appeal before
the Commissioner (Appeals), Chennai who set aside the impugned orders
and rejected the refund claims on the grounds of unjust enrichment and
time bar and ordered for recovery of refunds paid to the exporters.
Aggrieved, the Appellants have filed the present appeals before this forum.
3. The Grounds of Appeal filed by the Appellants are summarised
as follows: -
8
i. It was averred that the impugned orders erred in holding that the
Appellant had not protested on the issue of levy of cess on the
exports, and the appellant accepting the levy of cess as legally binding
on them. It was pointed out that any amount paid during the
pendency of the writ petition/ appeal filed by the Appellant challenging
the very levy of cess on the export of prawns/shrimps have to be
treated as paid "under protest" as held by the Apex Court in Mafatlal
Industries Limited Vs. Union of India [1997 (89) ELT 247 (SC)] and
therefore it was contended that the period of limitation of 6 months
prescribed under Section 27 of the Act would not apply .
ii. It was contended that the appeal filed before the Appellate authority
by the department was itself time barred and ought to have been
rejected by the authority.
iii. It was contended that the doctrine of unjust enrichment does not
apply since the cess paid by the Appellants was not passed on to the
foreign buyer as the amount towards cess was not received as
payment from the buyer.
iv. It was submitted that since it was conclusively held by the Hon'ble
Supreme Court that cess cannot be levied and collected on the export
of prawns/ shrimps under the Act, the levy and collection of cess was
without authority of law and therefore the question of unjust
enrichment does not arise.
4. The Ld. Advocates Shri R. Asokan and Shri Anil Kumar Bezawada
representing the Appellants reiterated the averments in the grounds of
appeal and further submitted that the findings in the impugned orders that
9
the refund claims were hit by limitation was misplaced as the refund amount
was claimed during the pendency of writ petitions before Hon'ble High Court
challenging the levy of cess on exports which have to be treated as "paid
under Protest" and therefore the limitation prescribed under Section 27 of
Customs Act, 1962 would be inapplicable. It was also stressed that the cess
paid was to be treated as deposits and for such refunds, the doctrine of
unjust enrichment could not be applicable. It was pointed out that the
Appellants had collected only the C&F value of exports and having paid cess
on the FOB value, they had not passed on the incidence of cess payment to
the buyer and therefore question of unjust enrichment would not arise. In
view of the submissions, the Ld. Counsels prayed to dismiss the impugned
orders.
5. The Ld. Authorised Representative Shri Anoop Singh
representing the Department supported the findings of the Lower Appellate
Authority and submitted that the incidence of cess payment was passed on
to the foreign buyers and hence as per Section 27 of the Customs Act the
refund claims were liable to be rejected for noncompliance to the doctrine of
unjust enrichment. It was also submitted that the refund claims were time
barred and hence the appeals merit to be dismissed.
6. We have carefully considered the submissions made by both the
sides and also evidences available on records. In particular, we have
carefully studied the orders of the Apex Court, High Courts, of the
10
Commissioner of Customs (Appeals) of different times, Refund Sanctioning
Authority and also of the Tribunal, Chennai.
7. The issues which arise for decision in these appeals are: -
i. Whether the Cess paid on export of prawns/ shrimps to be treated as
duty of customs or as deposits?
ii. Whether the refund claims are time-barred in terms of the provisions
of Section 27 of Customs Act, 1962? and,
iii. Whether the doctrine of unjust enrichment is applicable to these
refund claims filed in the background of the facts of these appeals?
8. We find that the appellants have exported Prawns/ Shrimps and
since the department treated the Shrimps/ Prawns as fish and insisted on
payment of export cess which was remitted for assessment and clearance of
exports. The Ld. Counsel for the Appellants pointed out that the matter of
payment of cess towards export of Prawns/ Shrimps has attained finality in
view of Hon'ble Supreme Court's decision in the case of Commissioner of
Customs Vs. Jaya Satya Marine Exports Pvt. Ltd. [2001 (131) ELT 3 (SC)].
The impugned orders rejected the refund claims for being time barred in
terms of Section 27 of the Customs Act, 1962 and that the claims were hit
by the principle of unjust enrichment.
11
9. Since the Hon'ble Apex Court held that cess is not leviable on
export of prawns/ shrimps, consequently, we find that the Appellants are
eligible for refund of cess paid as payments made have to be treated as
made under protest and the limitation not being applicable.
10.1 We find that M/s. Sandhya Marines Ltd. (Appellant A1)
challenged the levy of Cess under the Agricultural Produce Cess Act, 1940
for Prawns / Shrimps as they are different from Fish before the Hon'ble High
Court of Madras in 1998 wherein the Jurisdictional High Court directed the
claimant to file an appeal before the Commissioner of Customs (Appeals).
10.2 The Commissioner of Customs (Appeals) vide C.Cus No. 348-
352/05 dated 29.04.2005 has held that Cess is not leviable on export of
Prawns / Shrimps as they are different from the Fish. Consequently, the
Appellant (A1) has filed the refund claim for Rs.1,11,34,359/- dated
11.11.2005 for the Shipping Bills covered during the period from 1998-2005
which was rejected by the Deputy Commissioner of Customs (Refunds) on
the grounds of time-bar and also for non-production of original shipping bills.
10.3 Against the rejection of Refund Claim, the Appellant (A1) has
preferred an appeal before the Commissioner of Customs (Appeals) who vide
Order-in-Appeal No. C.Cus.319/2006 dated 28.04.2006 has set aside the
Lower Authority's order of rejection. Thus effectively, the issue has been
remanded to the Deputy Commissioner of Customs (Refunds), Custom
12
House, Chennai. Against the above Commissioner (Appeals) order, the
Department too has filed an appeal before the Chennai Tribunal who vide its
Final Order No. 1030 to 1035/2006 dated 09.11.2006 has dismissed the
Department's appeal. The relevant portion of the order dated 09.11.2006 is
extracted below: -
"2. The short question arising in all these appeals is whether cess was
leviable under the Agriculture Produces Cess Act, 1940 on prawns and
shrimps exported by the respondents during the material period. This issue
is already covered against the Revenue by the decision of this Bench in
Commissioner of Customs, Tuticorin Vs. Edhayam Frozen Foods [2005 (190)
ELT 72 (Tri.-Chennai)], wherein prawns and shrimps were held not be to
'fish' covered by item no. 7 in the Schedule to the above Act and
accordingly, cess was held not leviable thereon.
3. The grounds of these appeals indicate that, against the above decision
of this Bench, the Department has filed appeals in the High Court of Madras.
However, learned SDR has not claimed that our decision was stayed by the
Hon'ble High Court. Our decision still holds the field. Hene these appeals
are dismissed."
Against this CESTAT Order, the Department again filed an appeal before the
Hon'ble High Court of Madras. The Appellant (A1) has referred to the
judgment of Hon'ble Supreme Court in the case of Shiv Shankar Dal Mills Vs.
State of Haryana [AIR 1980 SC 1037] wherein it was held that there is no
law of limitation, especially for public bodies, on the virtue of returning what
was wrongly recovered to whom it belongs.
10.4 Again, the Appellant (A1) has filed the refund claim for refund of
Agricultural Produce Cess paid @ 0.5 on the FOB value in respect of Prawns/
Shrimps on 11.11.2005 and the Deputy Commissioner of Customs (Refunds)
has come to the conclusion that the Appellant's (A1) refund claim could not
be rejected as the collection of Cess by the Department was without the
13
authority of law and the refund claims are outside the scope of Sections 26
and 27 of the Customs Act, 1962 relying on the decision in the case of M/s.
Ahmed Khan & Sons, passed by Calcutta Tribunal that collection of the said
Cess ab initio was illegal being not leviable under the Customs Act, 1962 and
as such it has to be considered as a deposit made to the Customs. The
Deputy Commissioner of Customs (Refunds) has sanctioned their refund
claim for Rs.1,11,34,359/- by the Order-in-Original No. 15029/2011 dated
01.03.2011. The Department again filed an appeal before the Commissioner
of Customs (Appeals) and raised the issue of the limitation and also the
principle of unjust enrichment. The Department was of the view as revealed
from the Review Order that the Chartered Accountant had not categorically
stated how the burden of tax not passed on to the ultimate buyer. The
Commissioner (Appeals) in his common order vide Order-in-Appeal Nos.
1017 to 1020/2013 dated 22.07.2013 has set aside the Orders of the
Original Refund Sanctioning Authority with a direction to recover the already
sanctioned refund amounts with interest.
11.1 Similarly, M/s. Sai Marine Exports P. Ltd. (Appellant A2) has
challenged the levy of Cess on export of Prawns / Shrimps under the
Agricultural Produce Cess Act, 1940 before the Hon'ble High Court of Madras
in 1998 wherein the jurisdictional High Court directed the claimant to file an
appeal before the Commissioner of Customs (Appeals), Custom House,
Chennai.
14
11.2 The Commissioner of Customs (Appeals) vide No.
C3/C619/O/2004-Sea dated 31.08.2004 has held that Cess is not leviable on
export of Prawns / Shrimps as they are different from the Fish.
Consequently, the Appellant (A2) has filed the refund claim for
Rs.1,06,77,882/- dated 26.05.2005 for the Shipping Bills covered during the
period from 1999-2004 which was rejected by the Deputy Commissioner of
Customs (Refunds) on the grounds of time-bar and also for non-production
of original shipping bills.
11.3 Against the rejection of Refund Claim, the Appellant (A2) has
preferred an appeal before the Commissioner of Customs (Appeals) who vide
Order-in-Appeal No. C.Cus. 305/2006 dated 24.04.2006 has set aside the
Lower Authority's order of rejection. Thus, the issue has been remanded
again to the Deputy Commissioner of Customs (Refunds), Custom House,
Chennai. Against the above Commissioner (Appeals) order, the Department
has filed an appeal before the Chennai Tribunal who vide its Final Order No.
1030 to 1035/2006 dated 10.11.2006 has dismissed the Department's
appeal (Para No. 10.3 refers). Against this CESTAT Order, the Department
again filed appeal before the Hon'ble High Court of Madras. The Appellant
(A2) has referred to the judgment of Hon'ble Supreme Court in the case of
Shiv Shankar Dal Mills Vs. State of Haryana [AIR 1980 SC 1037] wherein it
was held that there is no law of limitation, especially for public bodies, on
the virtue of returning what was wrongly recovered to whom it belongs.
15
11.4 Again, the Appellant (A2) has filed the refund claim for refund of
Agricultural Produce Cess paid @ 0.5 on the FOB value in respect of Prawns/
Shrimps on 26.05.2005 and the Deputy Commissioner of Customs (Refunds)
has come to the conclusion that the Appellant's (A2) refund claim could not
be rejected as the collection of Cess by the Department was without the
authority of law and the refund claims are outside the scope of Sections 26
and 27 of the Customs Act, 1962 relying on the decision in the case of M/s.
Ahmed Khan & Sons, passed by Calcutta Tribunal that collection of the said
Cess ab initio was illegal being not leviable under the Customs Act, 1962 and
as such it has to be considered as a deposit made to the Customs. The
Deputy Commissioner of Customs (Refunds) has sanctioned their refund
claim for Rs.1,06,39,247/- by the Order-in-Original No. 15030/2011 dated
01.03.2011. The Department again filed an appeal before the Commissioner
of Customs (Appeals) raising the issue of the limitation and also the principle
of unjust enrichment. The main ground raised by the Revenue as could be
seen from the Review Order was that the Chartered Accountant had not
categorically stated how the burden of tax has not been passed on to the
ultimate buyer. As such, the Commissioner (Appeals) in his common order
vide Order-in-Appeal Nos. 1017 to 1020/2013 dated 22.07.2013 has set
aside the Orders of the Original Refund Sanctioning Authority with a
direction to recover the already sanctioned refund amounts with interest.
12. M/s. Premier Marine Products (Appellant A3) has also challenged
the levy of Agriculture Produce Cess on export of Prawns / Shrimps vide
W.P. No 17526 of 1998 before the Hon'ble High Court of Madras stating that
16
the levy of Cess was not attracted for Prawns / Shrimps as the said product
was not included in the schedule annexed to the said Act.
13. M/s. Kader Exports Pvt. Ltd. (Appellant A4) has similarly
challenged before the Hon'ble High Court of Madras by filing W.P. 17544 of
1998 regarding the levy of Cess on Prawns / Shrimps.
14. Similarly, M/s. Sagar Grandhi Exports Pvt. Ltd. (Appellant A5)
and M/s. G.V.R. Exports Pvt. Ltd. (Appellant A6) have challenged the levy of
Cess on export of Prawns / Shrimps under the Agricultural Produce Cess Act,
1940 before the Hon'ble High Court of Madras in W.P. No. 13884 to 13887 of
1998.
15. M/s. Devi Sea Foods Ltd. (Appellant A7) has similarly challenged
the levy of Cess on export of Prawns / Shrimps by filing W.P. No. 8645 of
1999 dated 12.05.1999.
16. Thus, we have carefully gone through all the refund sanctioning
orders by the Deputy Commissioner of Customs (Refunds), Chennai which
were appealed against by the Revenue before the Commissioner of Customs
(Appeals) who vide their orders dated 28.04.2006, 23.05.2006 and
31.03.2006 has set aside the refund sanctioned both on the grounds of
limitation and also on the principle of doctrine of unjust enrichment.
17
17. A perusal of all these orders clearly reveal that all the appellants
have challenged the levy before the Hon'ble High Court of Madras when the
Commissioner of Customs (Appeals) vide order dated 28.04.2006 have held
that limitation was not applicable to these cases as the levy was challenged
by them before the jurisdictional High Court as detailed above.
18. Finally, the Hon'ble High Court in the case of Commissioner of
Customs, Tuticorin Vs. Edhayam Frozen Foods [2008 (230) ELT 225 (Mad.)]
has finally settled the issue relating to levy of export Cess on export of
Prawns and Shrimps treating them as Fish. The issue has attained finality by
the decisions passed by the Tribunal and by the Hon'ble Apex Court in the
case of Commissioner of Customs, Tuticorin Vs. Edhayam Frozen Foods was
reported in [2005 (190) ELT 72 (Tri. Chennai)] and [2022 (381) ELT 577
(SC)] respectively.
19. The Commissioner of Customs (Appeals) in his order dated
24.04.2006 has held in respect of M/s. Sai Marine Export P. Ltd. (A2) as
follows: -
18
20. The Hon'ble Apex Court in the case of Mafatlal Industries Limited
Vs Union of India [1997 (89) ELT 247 (SC)], has held as follows: -
"113. In this batch of cases, the claims by different assessees for
refund of excise duty paid by them under mistake of law arise over a
period of years, and the claims were made in different proceedings -
before the departmental authorities by way of civil suits and writ
petitions under Article 226 of the Constitution, which are in appeal
before us.
Broadly, the basis for the various refund claims can be classified into 3
groups or categories :-
(I) The levy is unconstitutional - outside the provisions of the Act or not
contemplated by the Act.
(II) The levy is based on misconstruction or wrong or erroneous interpretation of
the relevant provisions of the Act, Rules or Notifications; or by failure to follow the
vital or fundamental provisions of the Act or by acting in violation of the
fundamental principles of judicial procedure.
(III) Mistake of law - the levy or imposition was unconstitutional or illegal or not
exigible in law (without jurisdiction) and, so found in a proceeding initiated not by
the particular assessee, but in a proceeding initiated by some other assessee either
19
by the High Court or the Supreme Court, and as soon as the assessee came to
know of the judgment (within the period of limitation), he initiated action for
refund of the tax paid by him, due to mistake of law.
.
.
297. I am further of the view, the Legislature has merely adopted a device and a cloak to confiscate the property of the tax-payer by not only withholding repayment of unlawfully gathered tax but also taking away a portion of the sale price collected from the buyer without any lawful demand or excuse. Every person has a right to contract and bargain for the price. Section 11D places unreasonable fetter to the freedom to carry on trade and commerce and violates the guarantee given by Article 19(1)(g) of the Constitution.
.
.
299. In conclusion, I hold that the Government is permitted to levy and retain only that much of excise duty which can be lawfully levied and collected under the Central Excise Act read with the Central Excise Tariff Act, 1985 and the Central Excise Rules and various notifications issued from time to time. Anything collected beyond this is unlawful and cannot be retained by the Government under any pretext. The illegal levy and collection of duty violate not only the Central Excise Act and the Rules but also offends Article 265 of the Constitution of India.
300. I am of the view that the provision of Section 11B is a device for deying the claim for refund of duty to a tax-payer and must be struck down as violative of Article 265 of the Constitution. It in effect tries to perpetuate an illegal levy without altering the basis of the law under which the levy was made in any way. It is also a colourable piece of legislation and must be struck down.
301. Section 11D imposes unreasonable restriction on the right to carry trade and violates Article 19(1) (g). Excise authority cannot deny the manufacturer the freedom to commerce and trade and take away a portion of the contract price even without raising any demand or giving any hearing. The Excise Officer cannot under any circumstance give the balance to the ultimate consumer or credit the amount to the Fund. Section 11D is arbitrary and is a colourable piece of legislation and is hereby struck down.
302. Sections 12C and 12D are parts of a device to withhold refunds of unlawfully gathered tax. These provisions are also violative of Article 265 of the Constitution.
303. I express my respectful agreement with the views expressed by my learned Brother Paripoornan, J. that an action by way of a suit or writ petition will be maintainable, depending upon the facts and circumstances of the case. I am entirely in agreement with the views expressed by him and the reasoning on points `E', `F' and `G' of the 20 concluding part of his judgment. I also agree with my learned brother Paripoornan, J.'s holding on points `H' and `I' subject to my views that in view of Article 265 of the Constitution, the Excise Department is not entitled to withheld refund of any unlawfully collected duty of excise under any circumstances. Any provision to that effect will be ultra vires Article 265 of the Constitution. Such illegally collected duties must be returned to the person from whom it has been collected.
304. In my judgment, the appeals should be allowed and the writ petitions should succeed."
21. From the above, it is obvious that the Revenue has raised the issue of limitation many times before the Appellate Authorities including the Tribunal and the High Court unsuccessfully as the Commissioner of Customs (Appeals) in his order dated 24.04.2006 has categorically held that the issue of limitation is not appliable to these cases as they have challenged levy of cess before the Hon'ble High Court of Madras and also in terms of ratio decidendi that once the levy and collection of Cess were challenged, the payments received are to treated as paid under protest and the rule of limitation is not applicable.
22. The Departmental appeals filed against the above order of the Commissioner (Appeals) have been dismissed by the Tribunal Chennai vide [Final Order Nos. 1030-1035/2006 dated 09.11.2006] and as such nothing survives including the rule of limitation as this order of the Commissioner (Appeals) have attained finality and as such the Revenue is barred from raising the issue of limitation again and again.
23. It has to be observed that on the issue of levy and collection of Cess on Prawns and Shrimps there was vexatious litigation indulged in by 21 the Revenue over a prolonged period, thus, hurting the interest of exporters. The exporters would have been permitted to provisionally assess the shipping bills filed which was not done in these cases for strange reasons.
24. Then, on the second issue of the principle of unjust enrichment, we find that all the Appellants have produced Certificates from their Chartered Accountants, a sample copy of which is given below: - 22
25. We have carefully gone through all the Chartered Accountants Certificates issued in respect of all these appeals clearly indicating that the element of Agricultural Produce Cess paid on the export of Prawns and Shrimps was not passed on or recovered from the importers / foreign buyers. All these Certificates were categorical in stating that Agricultural Produce Cess was not added to the price of exports. As such, all these appellants have to be treated to have proved that the incidence of AP Cess has not been passed on to their importers / foreign buyers. Relying on these Chartered Accountants Certificates issued separately i.e., (i) for the Appellant (A1) was issued by M/s. Sarpararu & Associates dated 14.08.2006 23 for the period from 1998-2005, (ii) for the Appellant (A2) was issued by M/s. Chowdary & Rao dated 04.09.2006 for the period from 1999-2004, (iii) for the Appellant (A3) was issued for the period from 2000-2005, (iv) for the Appellant (A4) was issued by Mr. Rajan Verghese Chacko dated 03.11.2006 for the period from 2000-2005, (v) for the Appellants (A5&A6) were issued by M/s. Abraham & Philip dated 18.05.2011 for the period from 1998-2005 and (vi) for the Appellant (A7) for the period from 1999-2005, the Refund Sanctioning Authority has held that refund claims filed were eligible for sanction.
26. In view of the above detailed discussion and findings, the impugned Orders-in-Appeal Nos. 1017-1020/2013 dated 22.07.2013, Order- in-Appeal Nos. 1600-1601/2014 dated 28.08.2014 and Order-in-Appeal No. 352/2014 dated 24.12.2014 cannot be sustained and are required to be set aside. Ordered accordingly.
27. Thus, the appeals are allowed with consequential reliefs, if any, as per the law.
(Order pronounced in open court on 07.01.2025)
Sd/- Sd/-
(VASA SESHAGIRI RAO) (P. DINESHA)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
MK