TMI Blog2018 (7) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses in profit loss a/c whereas assessee collected cum-duty prices. Further if amount shown in P L account, it must have been factored into price of goods manufactured. Refund hit by bar of unjust enrichment. Appeal dismissed. - Appeal No. E/1020/2009 - ORDER No. A/86901/2018 - Dated:- 13-7-2018 - Hon ble Dr. D.M. Misra, Member (Judicial) And Hon ble Mr. Sanjiv Srivastava, Member (Technical) Shri Mayur Shroff, Advocate, for appellant Shri A.B. Kulgod, Assistant Commissioner (AR), for respondent ORDER Per : Sanjiv Srivastava The appeal is directed against the order in appeal dated 29.6.2009 of the Commissioner of Central Excise (Appeal) Pune I upholding the order in original dated 17.03.2009. Vide the said order in original a Refund of ₹ 11,03,924/- (Rupees Eleven Lakhs Three Thousand Nine Hundred and Twenty Four only) has been sanctioned under the provisions of Section 11B of Central Excise Act, 1944 but ordered to be credited to Consumer Welfare Fund. Appellant had claimed the refund pursuant to the order of Commissioner (Appeal) Pune I. The issue involved here is one of suo motto adjustment of the excess payment against the short pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... richment can never be applied in case of the refund of amounts pre-deposited in terms of Section 35F of the Central Excise Act, 1944. The SLP filed by the department against this order has been dismissed by the Apex Court as reported in 1997 (94) ELT A 159 (SC) iv. In respect of the deposits made during the investigation following authorities have settled the law- Commissioner Central Excise Chennai II Vs UCAL Fuel System Ltd [2014 (306) ELT 26 (Mad)] Commissioner Central Excise Coimbatore Vs Pricol Ltd [2015 (320) ELT 703 (Mad)] Commissioner Central Excise Lucknow Vs Eveready Industries India Ltd [2017 (357) ELT 11 (All)] Commissioner of Customs Vs Mahalaxmi Exports 2010 (258) ELT 217 (Guj)] 4.0 For the revenue Shri A B Kulgod, Authorized Representative, reiterated the order of Commissioner (Appeal) and submitted that:- i. In the present case the refund claim made is under section 11B for the refund of the amounts deposited during investigation and not of the amounts pre-deposited under section 35F. ii. Bar of unjust enrichment is applicable in respect of all the refund made under Section 11B. In terms of Sub Section (3) to Section 11B it has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n accordance with the terms and conditions of the agreement governing such loan or advances, or (f) any sum payable by the assessee as an employer in lieu of any leave at the credit of his employee, [or] (g) any sum payable by the assessee to the Indian Railways for the use of railway assets, shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him. In terms of the said section amounts payable by way of tax, duty etc., can be claimed as deduction only when the said amounts are paid. Thus the essential character of the amounts deposited as Central Excise duty shall be that of the duty when the same is paid and claimed as deduction under the Section 43B of the Income Tax Act, 1961. 6.3 Hon ble Apex Court has in the case of Commissioner Of Income Tax II vs M/S Modipon Ltd [AIR 2018 SC 182] was considering the nature of deposits made in PLA (Personal Ledger Account). After considering the submissions their Lordship ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exported out of India; (b) unspent advance deposits lying in balance in the applicant's account current maintained with the Principal Commissioner of Central Excise or Commissioner of Central Excise; (c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act; (d) the duty of excise and interest, if any, paid on such duty paid by the manufacturer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (e) the duty of excise and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (f) the duty of excise and interest, if any, paid on such duty borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify : Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of duty and interest, if any, paid on such duty has not been passed on by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in view of the clear distinction between the pre-deposit and payment of duty. The pre-deposit made as per the direction of the court or appellate authority is nothing but a statutory requirement for hearing the appeal and payment made towards the duty are for discharge of statutory liability in terms of section 35F of the Central Excise Act, 1944. The liability for the payment of predeposit is created under Section 35F of the Central Excise Act, 1944 and not under section 3 hence both have been treated differently. While an action lies for recovery of the duty that has not been paid by resorting to provisions of section 11A and 11 of the Act, no similar action lies for recovery of pre-deposit. In case the court or appellate authority finds that the amount required to be pre-deposited for hearing the appeal has not been paid, they can refuse to hear the appeal, but cannot proceed to recover the said amount of pre- deposit. Further where a statutory interest has been provided for delay in payment of duty the same is not true for delay in deposit of pre-deposit. All the above distinctions clearly make the pre-deposit distinguishable from payment of duty. Para 5.2 of the CBEC Circula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed legal position that bar of unjust enrichment is also applicable to captive consumptiona. Solar Pesticides [2000 (116) ELT 401 SC (Para 20)] b. DCW Ltd [2006 (072) ELT 0130 (GUJ-HC)(Para 21] (iv) The Act provides for not passed on and it is different from not recovered.. It implies that you may not recover the duty explicitly from the buyers but while determining the price of final product (cable jointing kit which is not excisable) every prudent business man shall take into to accountthe duty suffered on components/ intermediate products in process of manufacturing which amounts to passing on the incidence of duty to others/ customers. In this regard I rely upon following case laws a. Ballarpur Industries [2005 (184) ELT 67 (Tri-Del) (Para 6)] b. S Kumar Ltd Vs CCC Indore [2003 (153) ELT 217 (Tri LB)] (v) Honourable High Court s judgement in case of AC C EX vs Bata Shoe Co Pvt Ltd., [2004 (1690) ELT 3 (Cal)] is squarely applicable to the facts of the case where it has been held that where there is no direct collection from customers but duty paid under compulsion, must have reflected in ultimate cost of finished goods, clause of unjust enrich ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cross the bar of Unjust Enrichment. The only possible way to pass the bar of Unjust Enrichment is that the disputed tax /duty is not expensed off in the accounts, but booked as Receivables . Tribunal has in case of Philips Electronics India Ltd Vs. Commissioner of Central Excise, Pune I [2010 (257) ELT 257(Tri-Mum)]. 13. The appellant produced a certificate dated 10.2.2004 of their Chartered Accountant in support of their claim for refund of duty of ₹ 17,45,42,335/-. The C.A. certified that the assessee had paid the said amount of duty @10% (20 - 10%) by raising excise invoices for the period from 13.5.93 and that the amount had not been recovered from their customers. It was further certified that the amount had been shown as expenses in the Profit and Loss account for the aforesaid period whereas it is contended by the assessee that they collected cum-duty prices from their customers and that the prices at which the customers sold the goods were also cumduty prices. The C.A. s certificate of non-recovery of duty by the assessee from their customers loses its probative value (if any) in the face of the above contention of the assessee. The above refund claim was filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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