9911796707
TMI Blog2003 (2) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... ies and without payment of duty even after the withdrawal of the exemption. Hence a case was registered by the department for the lapses committed and a show cause notice was issued for Rs. 1,54,41,755/- being the duty involved on the past clearances and also the department had invoked penal provisions. The then Collector in his Order-in-Original No. 39/93, dt. 9-9-93 had confirmed the said demand and also imposed penalty of Rs.15,00,000/- under Rule 173Q of the Central Excise Rules, 1944. Aggrieved by the above said order the appellant preferred an appeal before Hon'ble Tribunal. As per directions of the Hon'ble Tribunal the assessees had paid Rs. 40,00,000/- as pre-deposit. The Hon'ble Tribunal in its final order no. 712, dt. 8-5-96 had upheld the Collector's order for full amount of demand of duty but reduced penalty to Rs. one lakh. Consequently, the assessees had paid the difference amount of Rs. 1,15,41,755/- (inclusive of penalty of Rs. 1,00,000/-). Subsequently, the appellant filed a Rectification of Mistake (ROM) before the said Tribunal and the same was heard on 23-1-98 on the grounds that the proviso to Section 11A(1) would not be attracted in their instant case. The Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indings as to how he was satisfied that incidence of duty was not passed on to the customers by the respondent company; that the company merely said in their reply to show cause notice dt. 20-5-98 that they have not collected any amount towards duty from the customers; that on perusal of the clearance documents like invoice-cum-delivery notes for the relevant period that no duty amount was collected from the buyers; but all the invoices are marked as provisional; that since the duty liability is there on the impugned goods under above documents it is not known whether any supplementary invoices have been raised by the company to collect the duty portion from the customers; that to this effect, no recording has been done by the lower authority; that since it is found from the invoices that the customers are only two (i.e.) MRL and IOC, the lower authority could have easily verified this fact from the other end accordingly, directed the lower authority to verify this aspect after hearing the party and with the above observations the appeal was remanded to the lower authority for fresh considerations. 4. The lower authority after due process of law vide Order-in-Original No. 42/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , he had taken the entire invoice values based on which he calculated duty demand. The Hon'ble Commissioner would have excluded excise duty from the invoice value, if it were felt that excise duty was also claimed as part of price. Section 4 clearly provides the exclusion of excise duty while valuing the clearances. The Commissioner however collected duty on the invoice price treating the entire value as price exclusive on excise duty. It is therefore erroneous for the lower authority to now overrule a fact confirmed by the Commissioner, that the excise duty was not a part of the excise invoice price. (6) The lower authority was directed in the remand only to examine whether supplementary invoices had been raised to the buyers and whether the assessments were provisional. The lower authorities however exceeded all the scope of jurisdiction and erroneously re-examined the grant of refund afresh, which was not within his jurisdiction. (7) In addition to the refund the department is also due to pay interest to the company as provided under Central Excise Act, 1944, from 25-5-1999, till th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the CEGAT. That the appellant informed the department of the rectification application filed before the CEGAT, and therefore paid the duty of Rs. 1,15,41,755/- "Under Protest", pending decision of the CEGAT in the rectification application. The appellant contest that the amount for which refund was sought was not excise duty, but only amounts deposited with the deptt. pending adjudication of the case. The amounts were not confirmed as excise duty, by the deptt. nor the CEGAT. The department has also not filed any appeal against the order of the CEGAT and therefore the order of the CEGAT has become final, with the consequential relief for suo motu grant of refund. (b) The amounts which have been deposited with the deptt. pending adjudication, the same are not attracted by the provisions of Section 11B, and automatic refund has to be granted as per the decision of the Supreme Court in the Mafatalal Industries case 1997 (89) E.L.T. 247 (S.C.). The provisions of unjust enrichment are not attracted and the deptt. cannot see to deny the refunds for such reasons, and they have to suo motu refund the amount deposited. The Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the principles of rule of law. The Assistant Commissioner has wrongly interpreted the decision of the Supreme Court in the Mafatlal Industries case as the decision, clearly provides, that where it is clearly established that duty has not been passed on, the refund should be granted. (h) The Assistant Commissioner has failed to consider the letters and correspondence from the two major buyers, viz Indian Oil Corp. and Chennai Petroleum Ltd. that they had not collected the duty from the company nor had they paid any excise duty for Furfuraldehyde, during the relevant period claimed in the refund claim. (i) The Assistant Commissioner erroneously confirmed the refund amount as Rs. 1,05,62,417/- by deducting Rs. 7,55,954/- as interest for Rs. 41,23,384/- and he further failed to consider the interest claims of the appellant, on interest for delayed payment of refund, to the appellant. 7. The chain of events spread over a time span of a decade are not disputed. Facts pertinent to the issue at hand commences with the Hon'ble CEGAT Stay Order No. 48/1994, opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er No. 712/96, dt. 8-5-96 that proviso to Sec. 11A(1) of the Act was attracted is withdrawn and it is held that the proviso was not attracted, consequently the demand is upheld only in regard to the period immediately preceding the period of six months prior to the date of notice. (ii) There is no error in the final order in other respects." The ROM order was accepted by the Appellant and by the Respondent without any reservation. It was also deemed to have been accepted as final settlement of the legal proceedings as neither side preferred any further appeal before the next higher appellate forum. This is a crucial factor of paramount importance in order to appreciate the crux of the contentious issue before me, The Hon'ble CEGAT unequivocally held that "The finding that the proviso to Sec. 11A(1) of the Act was attracted and the amendment was not barred by time was erroneous on the face of the record." Consequently it follows that any action taken in pursuance of CEGAT Final Order No. 712 of 1996, dated 8-5-96 would not be legal and correct. But it was in pursuance to this Order that the Appellant paid Rs. 1,54,41,755/- on 23-7-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are covered under the provisions of Section 11B of the Act and are governed by the parameters applicable to the claim of refund of duty as the amount is deposited under Section 35F of the Central Excise Act, 1944. The Hon'ble Supreme Court vide its order dated 26-11-2001 dismissed the appeal. Even though the Apex Court did not spell out the reasons for dismissal, it can well be construed in the light of its earlier judgment in the case of Suvidhe Ltd. and Mahavir Aluminium that the law relating to refund of pre-deposit has become final. 3. In order to attain uniformity and to regulate such refunds it is clarified that the refund applications under Section 11B(1) of the Central Excise Act, 1944 or under Section 27(1) of the Customs Act, 1962 need not be insisted upon. A simple letter from the person who has made such deposit, requesting the return of the amount, along with an attested Xerox copy of the order-in-appeal or CEGAT order consequent to which the deposit made becomes returnable and an attested Xerox copy of the Challan in Form TR6 evidencing the payment of the amount of such deposit, addressed to the concerned Assistant/Deputy Commissioner of Central Excise or Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax liability of the goods covered by the import in this case but in connection with some import. The show cause notice remains to be a show cause notice. It does not create any liability on the part of the appellant. Unless and until final order is passed against the appellant, it cannot be held that the appellant is liable to pay or deposit any amount. Department cannot have the right to retain the sum deposited by the appellant. Therefore the Commissioner is directed to refund Rs. 15 lakhs remitted by the Appellant on 27-11-1997 with interest at 18% per annum which is legally due, from 1-5-1999 till date of payment, on or before 13-9-1999. (AIR 1974 SC 1265 relied on) [paras 11, 12] Strictures against Commissioner - Order passed by Deputy Commissioner (Refunds) rejecting the appellant's claim of refund merely an attempt to defy Tribunal's order which is also confirmed by Supreme Court - Tribunal's Order not implemented in spite of specific direction given by Tribunal - Order of Deputy Commissioner to be treated as an attempt to flout the decision of Tribunal's. - "Order passed by Deputy Commissioner (Refunds) rejecting the appellant's claim for refund of Rs. 15 lakhs is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim for refund should not be rejected. To say least, the show cause notice is the outcome of the officer's ignorance of the law. 3. The amount deposited pursuant to the order passed by this Tribunal under Sec. 35F of the Act should have been returned after the final order dated 15-2-99 by the department without demur. In the instant case where the deposit was made by making endorsement in the PLA, the assessee himself could have taken credit of the amount by making necessary endorsement in his own PLA account. The assessee is directed to take credit of the said amount in his PLA with notice to the concerned Jurisdictional Authority. The officer is directed not to peruse the show cause notice proposing to reject the claim for return of the money. He is also directed to make necessary endorsement in the assessee's PLA allowing him to take credit of the amount deposited pursuant to the order of the stay". The Hon'ble High Court of Madras in the case of CCE v. Calcutta Chemicals Co. Ltd. - 2001 (133) E.L.T. 278 (Mad.), has held as follows :- "Pre-deposit made by assessee - Appeal decided by CEGAT in favour of assessee - Repayment of pre-deposit having been delayed by Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether any supplementary invoices have been raised by the company to collect the duty portion from the customers. To this effect, no recording has been done by the lower authority. Since it is found from the invoice that the customers are only two (i.e.) MPL and IOC, the lower authority could have easily verified this fact from the other end . I direct the lower authority to verify this aspect after hearing the party. With the above observation, the appeal is remanded to the lower authority for fresh consideration". On remand the directions of the Commissioner (Appeals) was to verify whether any supplementary invoices were raised by the appellant to collect the duty portion from the customers. Instead of addressing this issue the Assistant Commissioner in page 19 of the impugned order has held as follows :- "By mere stressing that they had not raised any debit notes/ supplementary invoices subsequent to the transaction it is felt that the Counsel intended to divert the attention of the department in order to derail the issue. Simply because there were no clearances of the impugned goods after 29-12-92 till February, 93 for the reasons best known to the assessee, it cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that duty incidence had been passed on to the buyer. Having examined the record, I find that the department has not discharged this burden". 11. I have to commensurate with the plight of this assessee who in spite of litigating for over a decade is still to get what is legally and rightfully due to him. Issues are unnecessarily being obfuscated and misinterpreted to deliberately deny the assessee his rightful due. Simple logic dictates that if in pursuance of a defective order (which stands acknowledged by the very maker of that order) if any remittance of duty has been made it is legally incorrect; later if the defect is rectified, corrected and accepted by all parties to the dispute, appropriate amendments have to be made by all concerned. There cannot be any controversy on that. A concept like unjust enrichment cannot surface up in such a legal dispute, it is irrational and contrary to law. The very purpose of a ROM order is cancellation of unintended consequences otherwise justice would be scuttled at the portals of its own kingdom. Conventional wisdom tells that the Bench comprising of the Hon'ble CEGAT President and the Hon'ble Technical Member gracefully accepted an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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