TMI Blog2005 (12) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... rued to the assessee prior to June 25, 1999 and, therefore, the amended Rule 9B(5) has no application cannot be accepted for the simple reason that in view of the amendment to Section 11B with effect from August 1, 1998, all refunds arising on finalisation of the provisional assessments made under the Excises Rules are governed by the procedure prescribed u/s 11B of the Excise Act and the amendment to Rule 9B(5) on June 25,1999 merely clarifies the legal position existing from August 1, 1998. Thus, refund accrued to the assessee after August 1, 1998 and moreover claim for refund was admittedly made after the amendment to Rule 9B(5) and , therefore, the principles of unjust enrichment is squarely applicable to the facts of the present case. Accordingly, we hold that, the Assessing Officer was justified in invoking the principles of unjust enrichment to the refund arising on finalisation of the provisional assessment on June 8, 1999 and that the refund claimed by the assessee by application dated November 1, 1999 was governed by the provisions of Section 11B of the Excise Act. In the present case, admittedly the assessee has recovered from its customers the duty paid on goods cleared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India reported in 1997 (89) E.L.T. 247 (S.C.) and the decision in the case of Commissioner of Central Excise v. T.V.S. Suzuki Limited reported in 2003 (156) E.L.T. 161 (S.C.) have held that the assessee is entitled to the refund and that the principles of unjust enrichment is not applicable to the present case. Hence, the revenue has filed this appeal under Section 35G of the Central Excise Act, 1944. 3. The assessee is engaged in the manufacture of metal containers on job work basis on behalf of M/s. Bharat Petroleum Corporation Limited (BPCL) and M/s. Hindustan Petroleum Corporation Limited (HPCL). During the period from July, 1991 to March, 1992, the assessee had filed price list for metal containers at the rate of Rs. 204.77 ps. per drum and cleared the same provisionally under Rule 9B of the Central Excise Rules 1944 ('the Rules' for short) at the rate of Rs. 204.77 ps. per drum. 4. On finalisation of the accounts, the assessee filed revised price lists on June 8, 1999 in respect of the goods cleared on provisional assessment by declaring the assessable value at the rate of Rs. 177.61 ps. per drum and the said price-list was approved by the then Assistant Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the principles of unjust enrichment contained in Section 11B of the Excise Act is not applicable in the present case. However, by an order dated August 30, 2001 the Assistant Commissioner of Central Excise held that the assessee has not disputed that the differential duty has been collected from the customer and, accordingly, rejected the assessee's refund claim by applying the principles of unjust enrichment. 8. The assessee filed an appeal against the said order dated August 30, 2001 and the Commissioner of Central Excise (Appeals), by his order dated December 31, 2001 allowed the appeal by following the judgment of the Apex Court in the case of Mafatlal Industries Limited (supra). The Appellate Authority held that the principles of unjust enrichment are not applicable to the refunds arising on finalisation of the provisional assessment prior to June 25, 1999 and, therefore, the refund due to the assessee on finalisation of the provisional assessment on June 8, 1999 amounting to Rs. 23,98,669/- cannot be denied to the assessee. On further appeal filed by the revenue, the CESTAT vide its order dated December 2, 2003 upheld the order of the Commissioner of Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of India Others reported in AIR 1976 S.C. 1152, M/s. Shiv Shankar Dal Mills etc. etc. v. State of Haryana Others reported in AIR 1980 S.C. 1037, U.P. State Electricity Board v. City Board, Mussoorie Others reported in AIR 1985 S.C. 883 and Full Bench decision of this Court in the case of New India Insurance Limited v. Union of India reported in 1990 (46) E.L.T. 23 (Bom.), Mr. Rana submitted that even if there was no statutory provision, a person can not claim or retain undue benefit and enrich himself unjustly. Relying upon the decision of the Apex Court in the case of Sahakari Khand Udyog Mandal Limited v. Commissioner or Central Excise Customs reported in 2005 (181) E.L.T. 328 (S.C.), Mr. Rana submitted that the principles of unjust enrichment would apply even if Section 11B of the Act is not applicable. Strong reliance was placed by Mr. Rana on Para 48 of the decision of the Apex Court in the case of Sahakari Khand Udyog Mandal Limited which reads as follows : 48. From the above discussion, it is clear that the doctrine of unjust enrichment is based on equity and has been accepted and applied in several cases. In our opinion, therefore, irrespective of applicability of Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally 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 . Any recoveries under sub-rule (5) of Rule 9B will not be governed by Section 11A or Section 11B, as orders passed under sub-rule (5) are appealed against-questioned in a writ petition or 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, would 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) reagitating the issues 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. 104. Rule 9B provides for provisional assessment in situations specified in clause (a), (b) and (c) of sub-rule (1). The goods pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delay on the part of the Revenue in refunding the amount due to the assessee. Therefore, whether an application for refund was made or not, the revenue was bound to refund the amount accrued to the assessee on finalisation of the provisional assessment on June 8, 1999 without applying the principles of unjust enrichment. In support of his submission, Mr. Bhatt relied upon the decision of the Apex Court in the case of T.V.S. Suzuki Ltd. (supra) and submitted that the amendment to Rule 9B(5) is prospective and not retrospective and, therefore the principles of unjust enrichment made applicable to the refunds arising on finalisation of provisional assessment after June 25, 1999 cannot be applied to the refunds arising on finalisation of the provisional assessment prior to June 25, 1999. 17. Mr. Bhatt further relied upon the decision of the Apex Court in the case of Commissioner of Central Excise, Mumbai v. Allied Photographics reported in 2004 (163) E.L.T. 401 wherein the Apex Court had referred similar question to a Larger Bench. The Larger Bench of the Apex Court in the case of Allied Photographics India Limited reported in 2004 (166) E.L.T. 3 while holding that there is no conflic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndal Limited has no relevance to the facts of the present case and in the light of the decisions of the Apex Court in the case of Mafatlal Industries Limited, TVS Suzuki Ltd., and Allied Photographics India Limited referred to hereinabove, the Tribunal was justified in holding that the bar of unjust enrichment is not applicable to the refunds accrued to the assessee on finalisation of the provisional assessment on June 8, 1999. 19. Mr. Bhatt fairly stated that in the present case, the assessee had collected from its customers the excise duty paid on goods cleared on provisional assessment. However, Mr. Bhatt submitted that the assessee had subsequently refunded the said amount to its customers. Mr. Bhatt further submitted that if the contention of the Revenue that the doctrine of unjust enrichment would apply to any amount recoverable by the assessee from the department is correct, then it would render Section 11B itself otiose as the said section contemplates grant of refund under various circumstances without reference to the doctrine of unjust enrichment. He submitted that the doctrine of unjust enrichment is a doctrine of equity. Rule 9B(5) of the said Rules as it stood prior t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Mafatlal Industries Limited (supra), the legislature by Act 21 of 1998, has further amended Section 11B of the Excise Act with effect from August 1, 1998 by inserting clause (eb) to Explanation B in Section 11B of the Excise Act. Relevant portion of Section 11B after insertion of clause (eb) with effect from August 1, 1990 read as follows : 11B. Claim for refund of duty. - (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of six months from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence including the documents referred to in Section 12A as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from or paid by him and the incidence of such duty had not been passed on by him to any other person : Provided Provided (2) .. . (3) .. . (4) .. . (5) .. . Explanation. - For the purposes or this section - (A) .. . (B) relevant date means, - (a) .. . (b) .. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e powers conferred by Sections 6, 12 and 37 of the Central Excise Salt Act, 1944 to carry into effect the purposes of the Excise Act. Thus, the Excise Rules have to be read in the light of he Excise Act and in case of conflict between the Act and the Rules, then, the Act shall prevail. In our opinion amendment to Section 11B by Act 21 of 1998 does not create any anomaly between the Act and Rules as it merely provides that the refunds arising on finalisation of the provisional assessment must be claimed by filing an application under Section 11B within the time stipulated therein from the relevant date. In other words, by amending Section 11B by Act 21 of 1998 it is made clear that refund arising on finalisation of the provisional assessment under Rule 9B(5) are governed by the provisions of Section 11B. 25. Although Section 11B of the Excise Act and Rule 9B of the Excise Rules operated in different fields prior to September 1, 1998, by amendment Act 21 of 1998, the legislature has removed the barriers and specifically brought the refund arising on finalisation of the provisional assessment within the purview of Section 11B and, therefore, from August 1, 1998 refund arising on final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- the procedure prescribed under Section 11B has to be followed as per the amendment effected by Act 21 of 1998. In our opinion, there is no merit in thin contention, because, firstly, there is nothing in clause (eb) inserted by Act 21 of 1998 to suggest that the said clause shall not apply to refunds arising on finalisation of the provisional assessment. Secondly, it is now well settled by the decisions of the Apex Court in the case of Commissioner of Central Excise v. Flock India (P) Ltd. reported in 2000 (120) E.L.T. 285 (S.C.) and the decision of the Apex Court in the case of Priya Blue Industries Limited v. Commissioner of Customs reported in 2004 (172) E.L.T. 145 (S.C.) = AIR 2004 S.C. 5115 that correctness of the assessment cannot be considered while dealing with the refund claim. In other words, if a party is aggrieved by the final assessment order passed under Rule 9B(5), then the remedy is to file an appeal and it is not open to the party to question the correctness of the order of the adjudicating authority by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing the order. Therefore, the contention of the assessee tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect from August 1, 1998, because, the issue in that case was relating to the refund arising on finalisation of the provisional assessment prior to August 1, 1998. The ratio laid down by the Apex Court in the case of TVS Suzuki Limited (supra) that the amendment to Rule 9B(5) applies prospectively from June 23, 1999 has to be read in the context of the refund arising on finalisation of the provisional assessment prior to August 1, 1998 and, therefore, the ratio laid down by the Apex Court in the case of TVS Suzuki Limited cannot be applied to the refunds arising on finalisation of the provisional assessment after August 1, 1998. 30. The decision of the Apex Court in the case of Allied Photographics India Limited (supra) does not in any way support the case of the assessee. In that case also, the issue before the Apex Court was relating to the refunds arising on finalisation of the provisional assessment prior to August 1, 1998. While bringing out the difference between 'making of refund' and 'claiming of refund' under the unamended Rule 9B(5) and the unamended Section 11B respectively, the Apex Court held that Rule 9B was a complete code by itself and that Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer was justified in rejecting the refund claim of the assessee. Both the appellate authorities below, in our opinion, were in error in relying upon the decisions of the Apex Court which were rendered in the context of the unamended Section 11B. Counsel for the assessee submitted that during the pendency of the proceedings before the authorities below, the provisional duty collected has been refunded to the customers namely BPCL and HPCL. Admittedly, this contention was not raised before the authorities below and hence, this contention of the assessee remains unsubstantiated. Moreover, having consistently argued before the authorities below that irrespective of the assessee collecting excise duty from the customers, the revenue cannot deny refund arising on finalisation of the provisional assessment, it is not open to the assessee, at this belated stage in this appeal to make out an altogether different case that the duty collected has been refunded to the customers. 33. For all the aforesaid reasons, we hold that the assessing officer was justified in holding that the refund arising on finalisation of the provisional assessment on June 8, 1999 was governed by the principles o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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