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TMI Blog2025 (2) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... lity in terms of rule 96ZO of the Central Excise Rules 2002 [Rules]. 2. In K.B. Rolling Mills, a Division Bench of the Tribunal held that section 11B of the Central Excise Act would be applicable, while in Kothi Steel another Division Bench of the Tribunal held that it would not be applicable. The Division Bench hearing this appeal also noticed that the Division Bench of the Tribunal in Kothi Steel failed to consider the decision of a Larger Bench of the Tribunal in Mohinder Steels Ltd. vs. Commissioner of C. Ex., Chandigarh 2002 (145) E.L.T. 290 (Tri. - LB). 3. It is for this reason that the Division Bench directed that the matter may be placed before a Larger Bench of the Tribunal to examine: i) Nature of levy & discharge thereof under section 3A, in light of Mohinder Steel decision of LB. (145) ELT 290 LB; ii) Consequent applicability of provisions of section 11B. 4. To examine the issues referred to the Larger Bench of the Tribunal, it would be necessary to examine the relevant provisions. 5. Section 3 of the Central Excise Act, as it stood prior to 05.05.2017, provides that there shall be levied and collected in such manner as may be prescribed a duty of excise to be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to claim adjustment of the said amount. Accordingly, the appellant adjusted the said amount towards the duty liability for the month of March 2000 and informed the department. 12. A show cause notice dated 19.03.2001 was issued to the appellant proposing to disallow the said adjustment and consequently demanded duty short paid for the month of March 2000. 13. The appellant filed a reply dated 16.04.2001 to the show cause notice and contended that it had correctly made the adjustment. 14. The Commissioner, by the order dated 25.09.2001, rejected the claim for adjustment of Rs. 1,06,850/- against the duty liability for the month of March 2000 and the relevant portion of the order is reproduced below: "3.8 In view of the above, the Central Excise duty on the excisable goods manufactured or produced before the 1st September, 1997 and cleared on or after that date was required to be discharged @ Rs. 600/- per metric tone in terms of Section 3 of the Act readwith exemption Notification No. 50/97-CE dated 01.08.1997 amended by Notification No. 57/97-CE dated 30.08.1997 (Apart from discharging the duty liability under the Scheme for goods manufactured and cleared on or after 01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and Second Schedule of the Central Excise Tariff Act to be levied. The relevant portion of section 3 is reproduced below: "3. Duties specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 to be levied (1) There shall be levied and collected in such manner as may be prescribed,- (a) a duty of excise, to be called the Central Value Added Tax (CENVAT) on all excisable goods (excluding goods produced or manufactured in special economic zones) which are produced or manufactured in India as, and at the rates, set forth in Schedule I to the Central Excise Tariff Act, 1985; (b) a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods (excluding goods produced or manufactured in special economic zone) specified in Schedule II to the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as and at the rates, set forth in the said Schedule II." 17. Section 3A of the Central Excise Act deals with the power of Central Government to charge excise duty on the basis of capacity of production in respect of notified goods. The relevant portion of section 3A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Excise Rules, 1944, subject to the condition that the total amount of duty liability shall be calculated and paid in the following manner:- I. Total amount of duty liability for the period from the 1st day of September, 1997 to the 31st day of March, 1998 (a) a manufacturer shall pay a total amount calculated at the rate of Rs. 750 per metric tonne on capacity of production of his factory for the period from 1st day of September, 1997 to the 31st day of March, 1998, as determined under the Induction Furnace Annual Capacity Determination Rules, 1997. This amount shall be paid by 31st day of March, 1998; (b) the amount of duty already paid, together with on-account amount paid by the manufacturer, if any, during the period from 1st day of "September, 1997 to the 31st day of March, 1998, shall be adjusted towards the total amount of duty liability payable under clause (a); (c) if a manufacturer fails to pay the total amount of duty payable under clause (a) by the 31st day of March, 1998, he shall be liable to pay the outstanding amount (that is the amount of duty which has not been paid by the 31st day of March, 1998) along with interest at the rate of eighteen pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontention of the appellant is that the provision relating to unjust enrichment could not apply to payments made under Compounded Levy Scheme. We have perused the relevant sections and rules and heard both sides. It is clear that payment made under Section 3A (Compounded Levy) is also duty of excise. Therefore, refund of such amounts would attract provisions of Section 11B, including the provisions relating to unjust enrichment. The appellant has not brought on record any evidence to show that the higher duty paid has not been passed on to the buyers. No evidence by way of differential pricing or otherwise is available on record. The amount paid in excess is also insignificant i.e. Rs. 1,600/- per month. In the absence of evidence it has to be held that the claim is not substantiated. Appeal fails and is rejected." (emphasis supplied) 21. The Division Bench also noticed that another Division Bench of the Tribunal in Kothi Steel held that section 11B of the Central Excise Act would not be applicable. The relevant portion of this decision of the Tribunal is reproduced below: "Heard both sides. The appellants have been denied refund of Rs. 12.50 lakhs on the ground of unjust enric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e view expressed by the Larger Bench of the Tribunal in Mohinder Steels and so the provisions of section 11B of the Central Excise Act would not be applicable. Learned counsel also submitted that the view expressed by the Tribunal in K.B. Rolling Mills does not reflect the correct position in law. The relevant portions of the judgment of the Supreme Court in Hans Steel Rolling are reproduced below: "The issue that falls for consideration in these appeals is, as to whether the provisions of lime limit that are contained in Section 11A of the Central Excise Act, 1944 (in short 'the Act') are applicable to the recovery of amounts due under the compound levy scheme for Hot-Re-rolling Mills, under the Annual Capacity Determination Rules, 1997 because otherwise, it is a separate scheme for the collection of Central Excise Duty for the goods manufactured in the country. 2. In order to record a definite finding on the aforesaid issue it would be necessary to set out certain facts leading to filing of the present appeals. 3. The appellants are engaged in the manufacture of iron and steel products falling under Chapter 72 and 73 of the Central Excise Tariff Act, 1985. During the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) Ltd. as reported in 2000 (118) E.L.T. 311 (S.C.), this court has categorically stated that Section 11A of the Act is not an omnibus provision which stipulates limitation for every kind of action to be taken under the Act or Rules. An example can be drawn with the Modvat Scheme, because even in that particular scheme. Section 11A of the Act had no application with regard to time limit in the administration of that scheme. 15. We are in agreement with the finding and decision arrived at by the Tribunal that the importing of elements of one scheme of tax administration to a different scheme of tax administration would be wholly inappropriate as it would disturb the smooth functioning of that unique scheme. The time limit prescribed for one scheme could be completely unwarranted for another scheme and time limit prescribed under Section 11A of the Act is no exception." (emphasis supplied) 24. The aforesaid decision of the Supreme Court in Hans Steel Rolling will be applicable in the present matter and the reference would, therefore, have to be answered keeping in mind the said decision of the Supreme Court. 25. In the present appeal, the scheme framed under section 3A of the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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