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TMI Blog2014 (5) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... L regarding the dutiability of HSD/Naptha captively used in the generation of electricity which was consumed within the refinery. The department was of the view that the appellant was not eligible for the duty exemption as electricity was not excisable and hence benefit of Notification NO. 67/95-CE dated 16-3-95 would not be available. While a sum of Rs. 2.33 Crore (approx.) was paid after clearance of the goods by the appellant, the majority of the duty amounting to Rs. 5,17,40,712/- was paid on monthly basis. These duty payments pertained to the period December, 1998 to June 2001. These duty demands were confirmed vide O-I-O NO. 3/2002 dated 30-1-2002. M/s HPCL challenged the said order before this Tribunal and vide order dated 15-7-2005, the Tribunal allowed the appeal of HPCL. The said decision was challenged by the Revenue before the Hon'ble High Court of Bombay vide Central Excise Appeal No. 40/2006 which was dismissed by the hon'ble High Court vide order dated 28-2-2008. Thereafter, M/s HPCL filed the refund claim on 19-5-2008. On 24-12-2008, the jurisdictional Asst. Commissioner of Central Excise wrote to M/s HPCL to furnish evidence that the incidence of duty was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of refund claim on this ground is not sustainable in law. (3) The amount paid at the instance of the department and the amount paid during investigation should be considered as pre-deposit and hence refund/return of deposit should have been made by the Revenue without insistence on a refund application and relies on the CBEC circulars 275/37/2K dated 2-1-2002, 802/35/04-CX dated 8-12-2004 and decisions in the case of Gujarat Insecticides Ltd. [ 2005 (183) ELT 3 (Guj)] and a few other decisions. (4) In this case the matter was finally settled by the decision of the Hon'ble High Court when the Revenue appeal was dismissed and the order of the High Court is dated 28-2-2008. Therefore, the period of limitation, if at all, should be computed from this date and in as much as the claim was filed on 19-5-2008, the refund claim is not hit by time bar. Accordingly he prays for the refund of the amount to M/s HPCL by setting aside the impugned order. 4. The ld. Commissioner (AR) appearing for the Revenue made the following submission:- (i) The ld. Lower appellate authority erred in concluding that the pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the impugned order be set aside and the refund claim held as time barred. 5. During the appellate proceedings, when the case was heard on 7-11-2013, a query was raised by this Tribunal about the treatment given to the refund amount of Rs. 7,50,44,129/- in the books of account of the appellant M/s HPCL. In reply thereto, the M. HPCL, vide letter dated 28-1-2014, has submitted that the above amount was not shown as receivables in their books of account 6. We have carefully considered the rival submissions. 6.1 There are two issues to be decided in this case. The first issue is whether the refund claim of the appellant HPCL is time barred or not. The second issue is whether the refund claim attracts the bar of unjust enrichment. 6.2 As regards the first issue, HPCL's contention is that since the matter relating to their eligibility to benefit of notification no. 67/95 was pending before the adjudicating authority and subsequently before the appellate authority, the payment made by them should be considered as "payment under protest" and reliance has been placed on the decisions of the Apex Court in the Mafatlal Industries case. It will be useful to see what the Apex Court sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... months will then have no application to him. 86. We may clarify at this stage that when the duty is paid under the orders of Court (whether by way of an order granting stay, suspension, injunction or otherwise) pending an appeal/reference/writ petition, it will certainly be a payment under protest; in such a case, it is obvious, it would not be necessary to lodge the protest as provided by Rule 233B." A reading of the said decision makes it absolutely clear that to consider the payment duty as payment under protest, the procedure prescribed under the statute must be followed. The only situation where this is not required is when the duty is paid under the orders of the Court or appellate authority during the interlocutory stage of stay, suspension, injunction or otherwise. In the present case before us, HPCL paid the duty on their own pending adjudication of the matter and they did not follow the procedure prescribed for payment of duty under protest. It was not on account of any directions from the court or appellate authority the payment of duty was made. If that be so, the payment of duty by HPCL cannot be considered as payment under protest at all and we h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s inserted in the Statute with effect from 11-5-2007. Clause (f) stipulates that in any other case, the period of one year has to be computed from the date of payment of duty. In the present case, the refund arose consequent to the decision of the Tribunal dated 15-7-2005. The payments were made much before, that is during December 1998 to June 2001 and part of the payments were made in June and September 2002 and in July, 2003. The refund claim was filed only on 19-5-2008, that is about 3 years after the decision of the Tribunal and more than 5 years after the payment of duty. Thus the refund claim has been filed much after the stipulated period of one year under section 11B and hence they are clearly time-barred. It is in this context the decision of the Apex Court in the Dena Stuff (P) Ltd case (supra) becomes relevant. In the said case, the hon'ble Apex Court held that the cause of action for claiming refund arises only when dispute is settled in the assessee's case and the period of limitation would run from the date of such decision. Thus in the present case, the refund became due to HPCL consequent to the Tribunal's decision dated 15-7-2005 and the one year perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of this legal position, CBEC circulars cannot be of any relevance and accordingly, we reject this contention raised by the appellant. 6.6 The last issue for consideration is whether the refund is barred by the unjust enrichment clause in the present case. In the Mafatlal Industries case (supra), the hon'ble Apex Court held that all refund claims under the Central Excise Act whether arising out of orders of the appellate authority, Appellate Tribunal or court will be governed by the unjust enrichment provisions stipulated in the section 11B and sub-section (3) of section 11B makes this position very clear. The relevant extracts from the said judgment are reproduced below:- "82. A good amount of debate took place before us on the question whether sub-section (3) makes Section 11B exhaustive of all kinds of refund claims including those which are refundable as a consequence of appellate/revisional order and/or as a consequence of orders made by the High Court/Supreme Court. Sri Nariman pointed out that in Rule 11 (as it was in force during the period August 6, 1977 to November 17, 1980), sub-rule (3) expressly provided that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake in refund claims arising as a consequence of appellate or a superior court order. We do not think it is possible to agree. Such a holding would run against the very grain of the entire philosophy underlying the 1991 Amendment. The idea underlying the said provisions is that no refund shall be ordered unless the claimant establishes that he has not passed on the burden to others. Sub-section (3) of the amended Section 11B is emphatic. It leaves no room for making any exception in the case of refund claims arising as a result of the decision in appeal/reference/writ petition. There is no reason why an exception should be made in favour of such claims which would nullify the provision to a substantial degree. So far as "lack of incentive" argument is concerned, it has no doubt given us a pause; it is certainly a substantial plea, but there are adequate answers to it. Firstly, the rule means that only the person who has actually suffered loss or prejudice would fight the levy and apply for refund in case of success. Secondly, in a competitive market economy, as the one we have embarked upon since 1991-92, the manufacturer's self interest lies in producing mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutional), has necessarily to be filed, considered and disposed of only under and in accordance with the relevant provisions relating to refund, as they obtained from time to time. We see no unreasonableness in saying so." 6.7 In the present case, it is an admitted position that the refund amount due was not reflected in the books of account of HPCL as claims receivable. This implies that the duty paid was shown as current expenditure and formed part of the Profit and Loss account of the assessee. Thus, if the claimant himself has treated the refund amount due as expenditure and not as "claims receivable", the claimant cannot said to have passed the test of unjust enrichment. This is the settled position in law. The appellant has also contended that the appellant's goods are sold at prices determined by the Govt. and therefore, it should be presumed that the appellant has borne the incidence. Similar argument has been negated by the hon'ble Apex Court in Allied Photographic India Ltd. [2004 (166) ELT 3 (SC)], wherein it was held that "uniformity in price before and after the assessment does not lead to the inevitable conclusion that incidence of duty has not been passed on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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