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TMI Blog2003 (3) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... re the application for COD is allowed. 2. The short facts of the case are that appellants are manufacturers of viscose staple fibre and rayon filament yarn. They filed refund application dated 17-11-94 for Rs. 1,04,81,884/-. They claimed the above refund as a result of order of Commissioner (Appeals), Trichy in Appeal No. 92/94 (TRY), dated 11-10-94. The refund was claimed on the ground that they had paid duty of Rs. 5,48,02,096/- whereas duty payable was Rs. 4,43,20,212/- only and there is excess amount of Rs. 1,04,81,884/-. The assessees were granted permission to set up a 100% EOU vide letter indent dated 19-12-91 by Secretariat for Industrial Approvals, Ministry of Industry, Govt. of India. On 8-9-93, they made an application to the Secretary, Ministry of Commerce, Govt. of India and sought debonding of its unit from 100% EOU; i.e. withdrawal from 100% EOU scheme and the debonding was permitted with effect from 15-11-93. At the time of debonding the dispute has arisen as to whether duty on the finished goods lying in stock is to be paid under main Section 3(1) of CESA, 1944 or under proviso to Section 3(1) of CESA, 1944. The appellant have contended that they had to pay d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the facts and circumstances of the case and the submissions made by the appellant. The question to be decided in this case is whether duty has to be paid under main Section 3(1) of the CEA, 44 or under proviso to Section 3(1) of the CEA with regard to the finished goods lying in stock on 15-11-1993 has been set at rest by the Hon'ble Supreme Court in C.A. No. 1787/1998, dated 10-3-2000 [2000 (117) E.L.T. 281 (S.C.) ] in favour of the appellant. They have produced copy of the order. The Hon'ble Supreme Court has held that :- "26. Considering the whole aspect of the matter we are of the opinion that the Tribunal was not right in holding that duty is to be leviable in terms of the proviso to Section 3(1) of the Central Excise Act, 1944. We, therefore, set aside the impugned judgment of the Tribunal and restore that of the Collector of Central Excise, dated October 11, 1994. The appeal is accordingly allowed. There shall be no order as to costs." Even prior to the above order of the Hon'ble Supreme Court, the appellant filed a refund claim in pursuance of O-I-A No. 92/94, dated 11-10-94 of the Collector (Appeals) for refund of Rs. 1,04,81,884/- on 17-11-1994. The lower au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ...................... "140..................Alternatively, it may be stated that duty paid in cases, which finally ended in orders or decrees or judgments of Courts, must be deemed to have been paid under protest and the procedure and limitation etc., stated in Section 11B(2) read with Section 11B(3) will not apply to such cases." A reading or the relevant portion of the above judgment would show that the finding of the Assistant Commissioner that refund claim should have been filed within six months from the date of payment of duty is erroneous and contrary to settled position of law. The Hon'ble Supreme Court has clearly held that where a person contests the levy of duty, it is deemed that the duty has been paid under protest. In the present case the appellant has not only paid the duty under protest but also contested the issue up to the Hon'ble Supreme Court. By the above judgment it may be seen that the Assistant Commissioner failed to appreciate the settled legal position. Moreover out of the total amount, the appellant paid Rs. 88,26,360/- vide TR6 Challan No. 49/93-94 under protest on 26-2-1994 towards duty on finished goods, which were lying in stock on 15-11-1993. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omers. In the case of Easter Industries Ltd., v. CCE reported in 2003 (161) E.L.T. 1034 (T) = 1999 (35) RLT 696 the Hon'ble Tribunal has held that the presumptions made in Section 12B can be only to the extent of the duty assessed and paid at the time of clearance of the goods and not of duties subsequently collected unless there is some positive evidence to the effect produced by the department. In the present case there is no finding that the appellant has realised the customs duties from their customers. In the present case the appellant filed an appeal against the order of the Assistant Commissioner and immediately after the appeal was allowed by the Commissioner (Appeals) in their favour a refund claim was filed. It is a settled position of law that once an appellate authority has allowed the appeal with consequential relief the question of time bar does not arise. This view has been echoed in the case of Omega Alloys Castings Pvt. Ltd., 2000 (121) E.L.T. 336. The above view is further strengthened by the fact that the appellant had paid the duty under protest. With regard to payment of duty to the tune of Rs. 88,26,360/- on 26-2-94 the appellant had clearly mentioned that dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 104, dated 23-11-93 to 27-2-94. An amount of Rs. 35,907/- was paid vide TR 6 Challan No. 17/93 and 18/93, dated 15-11-93. For Rs. 16,19,602 the lower authority has rejected the refund claim since the appellant has not produced any duty paid document for the proof of payment of duty. The refund was sought on the ground that they had paid higher rate of duty than what is payable. I find from the records that the duty element has been passed on to the customers pertaining to this amount. Hence the appellant are not eligible for refund of the amount of Rs. 16,19,617/- paid. For the rest of the amount of Rs. 86,26,360/- after the detailed discussion above, I hold that these are not hit by time bar and unjust enrichment. So they are entitled for the refund of Rs. 88,26,360/-. 4. In view of the above discussion, the order passed by the lower authority is modified to the above event and he is directed to grant refund of Rs. 88,26,360/-. 4. We have heard Shri K. Veeraraghavan, Central Govt. Addl. Standing Counsel and Shri K. Sankararaman, ld. Counsel for the respondent-assessee. 5. The department filed invoices and the GPs to show that assessee had paid BED and AE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-rule (5) of Rule 9B of Central Excise Rules 1944. He pointed out that proviso to Section 11B is not applicable as all the assessments were provisional and duty had been paid under protest. Ld. Counsel relied on the judgment of Smithkline Beechem Consumer Healthcare Ltd. v. CCE, Guntur, 2001 (137) E.L.T. 125 (T) which followed the Tribunal's ruling rendered in the case of CCE v. TVS Suzuki Ltd. (supra) and other judgments. Further reliance was also made on judgment of CCE v. Tamilnadu Pharmaceuticals Ltd., 2001 (47) RLT 709 (CEGAT-Che.). 8. We have carefully considered the submissions made by both sides and have perused various records. The dispute pertaining to levy of duty under Section 3(1) of the Act or under proviso to Section 3(1) of the Act had reached finality by the Hon'ble Apex Court holding in assessee's own case for the period in dispute that the levy has to be under Section 3(1) of the Act. Hence the refund claim was lodged by the appellants in respect of those payments made after the clearances from the stocks and pertaining only to the customs duty element of the payments. There is no claim for refund of AED and BED. Therefore, the argument raised by the Stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... @ 1.1. US Dollar per kg of Fibre on the stock as on 15-11-93. Vide TR6 Challan No. 49/93-94, dated 26-2-94 which amounts to Rs. 88,26,360/-. Request to please refer our letter No. S/FPG/10238/94, dated 26-2-94. 2. Also we have paid the short amount demanded by the Department and communicated to us for the difference vide Letter No. C. No. VIII/48/3/93-Cus., dated 14-2-94 on the indigenous capital goods in the event of debonding, which amounts to Rs. 28,25,631/- vide TR6 Challan No. 56/93-94, dated 17-3-94. We have also communicated this payment to you vide our letter No. S/FPS/10858/94, dated 17-3-94 and also mentioned that Rs. 42,563/- is of revenue nature erroneously demanded by the department for which liability was paid on 15-11-93. We request you to take consideration of the above said points and issue a corrigendum to the Order dated 31-3-94. Kindly acknowledge the receipt of this letter. 10. Assessee also filed details of differential duty worked out by them which is also extracted below :- DETAILS OF DIFFERENTIAL DUTY OF RS. 88,26,360/- PAID TO EXCISE DE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's claim of Rs. 16,19,617/- after examining all the documents grant refund as in our considered opinion the provisions of unjust enrichment would not apply to the facts of this case. Thus, the assessee's cross appeal is remanded to Commissioner (Appeals) for de novo consideration. Sd/- (S.L. Peeran) Member (J) Dated : 21-8-2002 13. [Contra per : Jeet Ram Kait, Member (T) (Oral)]. - I have perused the order proposed by my learned brother and I am not able to agree with his view that the Revenue appeal is to be dismissed and the assessee's appeal is to be remanded. Therefore, I proceed to record a separate order. 14. The Assessees are manufacturers of Viscos Staple Fibre and Rayon Filament Yarn. They had switched over from 100% EOU after de-bonding after obtaining due permission from the competent authority. They had paid duty on the goods lying in stock at the time of de-bonding of the unit on 15-11-1993 and the duty was demanded by order-in-original No. 5/94, dated 31-3-94 wherein the Assistant Commissioner demanded duty on the goods lying on stock as on 15-11-1993, against which the party filed appeal before the Commissioner (Appeals) who decided the case i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessed, the assessee shall pay the deficiency or be entitled to refund as the case may be. Any recoveries or refunds consequent on the adjustment under sub-rule 5 of Rule 9B will not be governed by Section 11A or Section 11B as the case may be. However if the orders passed under sub-rule (5) are appealed against or questioned in a writ petition or a suit, as the case may be, assuming that such a writ or suit is entertained and is allowed/decreed - then any refund claim arising as a consequence of the decision in such appeal or such other proceedings as the case may be governed by Section 11B. It is also made clear that if an independent refund claim is filed after the final decision under Rule 9B(5) re-agitating the issue already decided under Rule 9B - assuming that such a refund claim lies and is allowed it would obviously be governed by Section 11B. It follows logically that position would be the same in the converse situation." It would therefore be seen that what the Hon'ble Apex Court has clarified by the judgment as reproduced is that: (a) in case of provisional assessments, the ingredients of Section 11A or Section 11B will not come into pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicated that the price mentioned in the invoice is inclusive of Customs duty, Excise and also taxes. The revenue has also taken the plea that even the invoices from depot to the consumer also speak about the customs duty and as such there is a clear passing of the duty so as to attract provisions of Section 11B of the CE Act, 1944. It was also contended by the Revenue that it was for the assessee to discharge the burden of proof that incidence of duty was not passed on to the customers which burden has not been discharged. The learned Counsel for the respondents-assessee on the other hand submitted that although invoices show that the price is inclusive of Customs and Central Excise duty on inputs at Rs. 7.67 per kg and on fibre at 14.95 kg as per the order of the Assistant Commissioner dated 20-11-93, but mere is no actual passing of the incidence of duty to the consumers. This plea cannot be countenanced for the simple reason that if there was no intention to pass on the incidence of duty, there was no necessity to mention the incidence of duty in the invoice and in any case it was for the assessee to prove that incidence of duty was not passed on to the customers. It is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether duty burden has been passed on to the customers. The invoices indicated both Customs and Central Excise duties having been passed on to the buyers. What is relevant is whether the assessee has passed on the duty burden to the buyers or not and whether the assessee became eligible to the refund as a result of decision in the assessee's favour on a civil appeal or by a suit or writ petition. Admittedly in this case, the assessee has failed to discharge the burden cast on them that the burden of duty has not been passed on to the customers. Secondly the assessee became eligible to the refund as a result of the judgment of the Hon'ble Apex Court, inasmuch as in the present case the refund claim was made after an order in their favour by the Commissioner (Appeals), which was set aside by the Tribunal and which on appeal before the Apex Court was ruled in favour of the assessee. The Hon'ble Supreme Court in the matter of SRF Ltd. v. Assistant Collector of Central Excise, Trichy reported in 2001 (134) E.L.T. 324 (S.C.) has held that even if levy of duty is unconstitutional, it has to be established that incidence of duty has not been passed on to the others. It was also held there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emains referred to a Larger Bench in the case of CCE, Mumbai v. Allied Photographic India Ltd., reported in 2004 (163) E.L.T. 401 (S.C.). 22. The legal position emerging from the decisions of the Hon'ble Supreme Court in the case of Commissioner v. T.V.S. Suzuki Ltd., reported in 2003 (156) E.L.T. 161 (S.C.) and Sinkhai Synthetics & Chemicals Pvt. Ltd. is that refunds arising from duty payments under provisional assessment or under protest are not covered by the provisions relating to unjust enrichment contained in Section 11B of the Central Excise Act, 1944. The correctness of this view has been doubted by another division bench of the Apex Court in the case of CCE, Mumbai v. Allied Photographic India Ltd., and the issue referred to the Larger Bench. Such a reference does not affect the binding nature of law stated in the judgments in the cases of Sinkhai Synthetics & Chemicals Ltd. and T.V.S. Suzuki Ltd. The appellant's claim for refund of Rs. 88,26,360/- remains covered by these decisions. Therefore, I am in agreement with the view taken by the ld. Member (J) that this amount is required to be refunded to the appellants. 23. With regard to the remaining amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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