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2015 (10) TMI 966 - CESTAT MUMBAI

2015 (10) TMI 966 - CESTAT MUMBAI - 2016 (331) E.L.T. 456 (Tri. - Mumbai) - Denial of refund claim - Unjust enrichment - validity of SCN - refund of excess amount pursuant to finalization of provisional assessment - Held that:- Adjudicating authority has recorded categorical findings in favour of the assessee both in law and on facts. Further, we find that satisfaction to bar of unjust enrichment was recorded in detail in the order dated 31/03/2003. Further, we find that the show-cause notice gi .....

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l Choudhary, Member (Judicial) And Mr. Raju, Member (Technical) Shri.Ashutosh Nath, Asst. Comm. (AR) : For The Petitioner Shri.Rajesh Ostwal, Advocate : For The Respondent ORDER Per: Anil Choudhary 1. Revenue is in appeal against Order-in-Original No.47/KKS/2005-2006 dated 31/03/2006 passed by Commissioner of Central Excise, Mumbai. 2. Brief facts of the case are that, for the financial year 1998-99 the respondent assessee, a manufacturer of tyres, had cleared the goods under provisional assessm .....

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an appeal before this Tribunal and this Tribunal vide final order dated 28/04/2004 allowed the appeal filed by the assessee and set aside the order-in-appeal dated 04/08/2003. The said order of the Tribunal has become final as the same was not challenged. Pursuant to the finalisation of assessment order dated 04/06/2001, an excess amount was paid by the assessee amounting to ₹ 91,59,977/-. The assessee had claimed the refund of the same and vide order-in-original dated 31/03/2003 the refu .....

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uty after claiming the deduction on account of secondary cost of transportation, duty and taxes absorbed, interest on receivables and various discounts allowed to the buyers on provisional basis as per the provisions of Rule 9B of Central Excise Rules,1944. After the finalisation of the balance sheet, the assessee has been able to quantify the exact amount of permissible deductions on the above heads of accounts. Thus as per the calculation sheet enclosed along with the refund claim, it is clear .....

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ers before finalisation of the assessment and therefore the bar of unjust enrichment do not apply to their case. The report of the Range Officer in this regard is already discussed in earlier paras. The Range Officer in her report had stated that the assessee has issued the credit notes and thereby there is no unjust enrichment. The Range Officer has also verified the statements for the year 98-99 showing the refund of excess duty paid from the Range records and the assessees record and found as .....

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they say is not applicable in their case. Moreover, Rule 9B(5) is crystal clear in this regard which states (5) Where the duty leviable on the goods is assessed finally in accordance with the provisions of these Rules, the duty provisionally assessed shall be adjusted against the duty finally assessed falls short of or is in excess of the duty finally assessed the (assessee) shall pay the deficiency or be entitled to a refund, as the case may be. And along with the provisions of the Rule, vari .....

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pronouncements discussed above, I hold that the assessee is entitled for the quantified refund claim filed by them due to finalisation of the provisional assessments for the year 98-99. 3. In the meantime, the Revenue issued a show-cause notice dated 04/07/2003, which was issued under 11A (1) of the Central Excise Act, 1944 on the ground. Further scrutiny of the case records, it appears that CEAT Ltd., was not entitled to the refund and the same could have been credited to Consumer Welfare Fund .....

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till the date of realization of the price is permissible deduction, provided it is claimed on actual basis and subsequent to the sale of goods and should also be on account of delayed payment. The said show-cause notice was adjudicated vide impugned order. The Commissioner has recorded the findings that the issue as regards the deduction on account of interest on receivables, the same stands settled by the order of this Tribunal dated 28/04/2004. So far, the issue of unjust enrichment is concern .....

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g note of the Honble Supreme Court decision that any refund consequent upon adjustment under sub-rule (5) of Rule 9B will not be governed by Section 11A or Section 11B as the case may be It was further noticed that ruling of Mafatlal Industries Ltd. case was followed by TVS Suzuki Ltd. case 2001 (135) ELT 140 (Tri-Chennai). The Revenue had filed civil appeal before the Honble Supreme Court in TVS Suzuki Ltd. case and had also issued Circular No.518/14/2000-CX dated 03/03/2000.It was further r .....

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ELT 17 (SC) wherein it was held that refund arising out of provisional assessment are not to be governed by Section 11B of the Act. Accordingly, the learned Commissioner settled the case in favour of the assessee and dropped the proceedings. 4. Aggrieved by the order, the Revenue is in appeal before this Tribunal on the ground that the assessee has to clear the bar of unjust enrichment even in the case of refund arising out of provisional assessment. 5. Learned AR appearing for the Revenue have .....

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contention is that the adjudicating authority granting refund vide order dated 31/03/2003 have not considered the issue of unjust enrichment in proper perspective. 5.1 The learned DR further relied upon the decision of Hon ble Madras High Court in the case of Dollar Company Pvt. Ltd. 2015-TIOL-344-HC-MAD-CX wherein the question before the Hon ble High Court was whether on the facts and the circumstances of the case, the Tribunal is right in dismissing the Revenues appeal placing reliance on th .....

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, with effect from 25/06/99 particularly when legislative amendment was introduced under Section 11B of the Act from 01/08/1998 onwards by insertion of clause (eb) to explanation B in Section 11B of the Act. The facts in that case was the assessee manufacturer of medicine had cleared under Chapter 30 of the tariff Act and paid duty of 8%. The Revenue classified the product under 3304 and as such was chargeable at 30% and the assessee has paid the differential duty under protest and thereafter th .....

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i.e. in respect of unjust enrichment. The relevant date of the applicability, the Hon ble High Court following ruling of Mafatlal Industries Ltd., and the TVS Suzuki Ltd. and the Apex Court held that the refund claim was made on 21/09/1998 sub-rule 5 of Rule 9B came into force subsequently therefore, mischief of unjust enrichment will not apply. 6. The learned Counsel for the respondent assessee supports the impugned order and further states that the whole proceedings are otherwise initiated vi .....

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