TMI Blog2017 (5) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... Cess, the provisions of the Central Excise Act as incorporated in the OIC Act would also not apply to the amount paid by mistake. Refund allowed - appeal allowed - decided in favor of assessee. - Appeal Nos. E/75739-75748, 75844-75853, 75886, 75892-75893, 75934-75935, 76051-76054, 76083, 76121/2015, 75166-75168, 75223-75224, 75361, 75384, 75652, 76793/2016 - Order No. FO/A/75683-75722/2017 - Dated:- 24-4-2017 - Hon ble Shri P. K. Choudhary, Member ( Judicial ) Smt. Chandreyi Alam (Gupta), Advocate Shri Devraj Sahu, Advocate for the Appellant Shri K.Choudhary, Supdt.(AR) for the Revenue M/s.Itakhuli Tea Estate,M/s.Baghjan Tea Estate,M/s.Raidang Tea Estate,M/s.Phillobari Tea Estate,M/s.Hunwal Tea Estate,M/s.Dekorai Tea Estate,M/s.Dufflaghur Tea Estate,M/s.Nya Gogra Tea Estate,M/s.Pertabghur Tea Estate,M/s.Behali Tea Estate,M/s.Phulbari Tea Estate,M/s.Rupajulie Tea Estate,M/s.Paneery Tea Estate,M/s.Borengajuli Tea Estate,M/s.Dimakusi Tea Estate,M/s.Tarajulie Tea Estate,M/s.Attareekhat Tea Estate,M/s.Bhooteachang Tea Estate,M/s.Harchurah Tea Estate,M/s.Addabarie Tea Estate,M/s.Betjan Tea Estate,M/s.Bogopani Tea Estate,M/s.Rajmai Tea Estate,M/s.Corramore Tea Esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the Board s Circular No.978/2/2014-CX dated 07.01.2014. (b) A Show Cause Notice dated 14.11.2014 was issued proposing as to why the Refund Claim of ₹ 1,23,882/- shall not be rejected on the ground that a major portion of the amount is barred by limitation beyond one year from the relevant date, laid down in Section 11B of the Act, 1944. It is also hit by unjust enrichment. (c) The Assistant Commissioner of Central Excise Service Tax, Tezpur Division by order dated 09.04.2015 sanctioned the Refund of ₹ 17,394/- under section 11B of the Act, 1944, during the period from 31.08.2013 to 31.03.2014 and ordered that the same to be credited to Consumer Welfare Fund. The balance amount of refund was rejected as time barred. (d) In appeal, the Commissioner(Appeals) by order dated 03.08.2015, rejected the appeal filed by the appellant. It is seen from the said order, that the appellant submitted Chartered Accountant Certificate wherein it is certified that the duty element has not been passed on to the buyers. (e) The Refund claim was filed by the appellants in view of the Board s Circular dated 07.01.2014. The relevant portion of the said Circular is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of Section 11B of the Central Excise Act, 1944, which was challenged before the Hon ble High Court. The refund claim was rejected on the ground of limitation as well as unjust enrichment. The Hon ble High Court quashed the Adjudication order and allowed the Refund claim made vide application dated 17.07.2014. The relevant portions of the said decisions are reproduced below:- 5.2 It was submitted that in the present case, there was no assessment to begin and that mere payment of tax cannot be said to be an assessment. It was submitted that assessment is a machinery provision which derives relevance from substantive power, that is, levy. If the levy does not exist, there is no question of assessment. * * * * * * * * * * 10. What is subject matter of challenge in the present petition, is the order passed by the adjudicating authority rejecting the application made by the petitioner seeking refund of the Education Cess, Secondary and Higher Secondary Education Cess erroneously paid by it, and hence, the next question that arises for consideration is as to whether the petitioner was liable to pay Education Cess and Secondary and Higher Secondary Education Cess. Educati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (No. 2) Act, 2004 (23 of 2004) and Secondary and Higher Education Cess on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 (1 of 1944) or under any other law for the time being in force. The Secondary (2) and Higher Education Cess on excisable goods shall be in addition to any other duties of excise chargeable on such goods, under the Central Excise Act, 1944 (1 of 1944) or any other law for the time being in force and the Education Cess chargeable under Section 93 of the Finance (No. 2) Act, 2004 (23 of 2004). (3)The provisions of the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder, including those relating to refunds and exemptions from duties and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of the Secondary and Higher Education Cess on excisable goods as they apply in relation to the levy and collection of the duties of excise on such goods under the Central Excise Act, 1944 or the rules made thereunder, as the case may be. 10.1 On a plain reading of Section 93, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s levied by the Ministry of Petroleum and Natural Gas. In the aforesaid premises, the requirements of Section 93 of the Finance Act, 2004 and Section 138 of the Finance Act, 2007 are not satisfied in the present case, and consequently, the said provisions have no applicability to the facts of the present case. The petitioner, therefore, cannot be said to have been liable to pay Education Cess and Secondary and Higher Secondary Education Cess under the above provisions. * * * * * * * * * * * * * * 12.1 Thus, Section 11B of the Central Excise Act applies to the claim for refund of any duty of excise and interest, if any, paid on such duty. In the present case, as discussed hereinabove, Oil Cess under the OID Act is not a duty of excise though described as such for the sake of convenience. Education Cess under Section 93 of the Finance Act and Secondary and Higher Secondary Education Cess under Section 138 of the Finance Act, 2007 are duties of excise calculated on the aggregate of all duties of excise to the extent provided thereunder. Reverting to the facts of the present case, since Oil Cess is not a duty of excise, the amount paid by the petitioner by way of Education Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on behalf of the revenue, that in case the limitation prescribed under Section 11B of the CE Act is not applicable, the general principles of limitation would apply and the limitation of three years for filing a suit would apply, whereas on behalf of the petitioner reliance has been placed upon Section 17 of the Limitation Act, 1963 to contend that this case would be governed by the said provision and hence the limitation would not begin to run till the petitioner discovered the mistake. In support of the above submission, on behalf of the petitioner, reliance has been placed on the following decisions : * * * * * * * * * * * * * * 14.4 Thus, in view of the principles enunciated by the Supreme Court in Salonah Tea Co. Ltd. v. Superintendent of Taxes, Nowgong (supra), in case where money is paid by mistake, the period of limitation prescribed is three years from the date when the mistake was known. Besides, Section 17 of the Limitation Act inter alia provides that when a suit or application is for relief from the consequences of a mistake, the period of limitation would not begin to run until the plaintiff or applicant has discovered the mistake, or could, with reasonab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1B of the Central Excise Act, 1944 along with the documentary evidences as provided under Section 12A. According to the adjudicating authority, two basic requirements are to be complied with based on documentary evidences (i) the amount of duty, in relation to which the refund is claimed, is paid by the claimant; and (ii) the incidence of such duty has not been passed by the claimant to any other person. The first requirement is satisfied. As regards the second requirement, the adjudicating authority has found that the petitioner has failed to prove conclusively and beyond doubt that the incidence of the duty, in relation to which the refund is claimed, has not been passed by it to any other person and has held that the refund claim is therefore squarely hit by unjust enrichment in view of the provisions of Section 12B of the Central Excise Act, 1944 as the claimant has passed on the incidence of duty to any other person. In this regard, it may be germane to refer to Paragraph 19.19 of the impugned order wherein the adjudicating authority has recorded thus : 19.19 The claimantvide letter F. No. JTI/2014-15/Excise/416, dated 20-11-2014 (received in the office on 21-11-2014) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fixed solely on the basis of the international price of crude as traded in the international market and the burden of cess and royalty payable to Government of India is on the seller. In the impugned order, the adjudicating authority has brushed aside the certificate dated 20-11-2014 issued by the Senior Finance Manager of IOCL merely on the ground that such certificate was issued at the request of the claimant. As has rightly been stated in the above letter dated 29-7-2015, in the ordinary course, the petitioner would not be required to obtain such a certificate and it is only in the peculiar facts of the present case, where it is called upon to prove that it has not passed the incidence of the Education Cess and Secondary and Higher Secondary Education Cess paid by it to the buyer, that the petitioner was required to obtain such a certificate. Under the circumstances, the adjudicating authority was not justified in not giving due weightage to the letter dated 20-11-2014 issued by the IOCL. In the opinion of this court, the material on record clearly establishes that the incidence of Education Cess and Secondary and Higher Secondary Education Cess has not been passed on to the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ujarat High Court itself in Bajaj Foods , have taken a different view. * * * * * * * * * * * * * * * 1.26 The appellants have relied upon the Hind Agro judgment where the Hon ble Delhi High Court held that when cess was erroneously paid on meat problems, refund claim could be filed within three years from the date of discovery of the mistake. The Hon ble Delhi High Court did not follow the Mafatlal judgement on the ground that it is applicable to Central Excise and Customs duties alone. The Hon ble Court followed the Hon ble Supreme Court judgements in Salonah Tea and U.P.Pollution Control Board despite noting that in those cases levy was without the authority of law. It is submitted that the cess Act, referred to in the Hind Agro case, borrowed the provisions of the Customs Act relating to levy and collection, including refund and exemption, but this fact was not brought to the notice of the Hon ble Court. It is also submitted that no other High Court, whose judgements have been cited by both sides in these appeals, including the Gujarat High Court in Joshi Technologies strongly relied upon by the appellants, has refused to apply the Mafatlal judgement on this ground. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the provisions of the Act and the writ petition would naturally be considered and disposed of in the light of the provisions of Section 11B of the Act. It has been held therein that power under Article 226 has to be exercised to effectuate the regime of law and not for abrogating it, as the power under Article 226 is conceived to serve the ends of law and not to transgress them. At paragraph 113 of the said judgment, they classify the various refund claims into three groups or categories : (a) The levy is unconstitutional-outside the provisions of the (I) Act or not contemplated by the Act. (b) The levy is based on misconstruction or wrong or erroneous (II) 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. (c) Mistake of law the levy or imposition was (III) 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 by the High Court or the Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent could have approached this Court instead of filing the appeal choosing a wrong forum, could not be a deficit coming in the way to claim refund. 25. However, the petitioner has not approached the Tribunal after the order passed by 1st appellate authority and they have approached this Court. Therefore, even the provisions of Section 35B(1)(b) would not be applicable. From the facts of the case as discussed herein above, it emerges that petitioner has approached this Court contending that Section 11B is not applicable as there was no duty cast on them to pay service tax and they have paid such amount under mistaken notion. Viewed from nay angle, we are of the opinion that the learned Single Judge was justified in setting aside that portion of the order which rejected the claim of refund and accordingly same is confirmed. 10. The Tribunal in the case of Jubilant Enterprises Pvt.Ltd. v. CCE, Mumbai-I [2014 (35) ELT STR 430 (Tri.-Mum.) has held as under :- 6. In this case, the appellant has paid service tax during the impugned period for which they are not required to pay service tax at all as clarified by C.B.E. C. As the payment made by the appellant is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11B of Central Excise Act, 1944 extended to the Service Tax are not applicable to this case. Hence, the bar of limitation is not applicable to this case. 9. Now, I come to the third issue. I find that in this case the respondent has filed the refund claim for the amount, which they paid the Service Tax to the department, but they have not received the same from their clients. Moreover, this fact has been corroborated by their balance-sheet showing that the amount is receivable from the Central Excise and Chartered Accountant has also given a certificate to that effect. In this situation, the respondent has qualified the bar of unjust enrichment and the same is not applicable in this case. 12. In the recent decision of the Division Bench of the Tribunal in the case of M/s.Monnet International Ltd. Another vs. CCE, New Delhi by Final Order No.52170-52171/2017 dated 08.03.2017 allowed the appeal on the identical situation. In that case, the assessee was providing liaisoning services to M/s.Dongfeng Electric Corpn., China during the period 01.06.2005 to 31.01.2007. They have deposited the amount of ₹ 93,13,142/- in the first case and ₹ 25,31,125/- in the second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod of three years prescribed by Hon ble Delhi High Court. Therefore, we are of the view that the assessee-Appellants are entitled to get the refund and the same is not hit by the limitation prescribed under Section 11B of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. 18. Moreover, it may be mentioned that the Department should not take advantage of the ignorance of the assessee-Appellants as per the ratio laid down in the case of Parekh Brothers vs CIT, 150 ITR 105 Kerala; and CIT vs Maha Laxmi Sugar Mills, 160 ITR 920 SC. 19. In the instant case, we are of the view that it is not a case of refund of tax, but return of deposit for which limitation (Section 11B of the Act) is not applicable. Hence, we set aside the impugned orders and direct the jurisdictional Commissioner to return the deposited amount, as per law. 20. In the result, both the appeals filed by the assessee-Appellants are allowed. 13. On perusal of the aforesaid decisions, I find that the present case is squarely covered by the decision of the Hon ble Gujarat High Court in the case of Joshi Technologies International v. UOI (supra), where the Adjudication order was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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