Commissioner Of Central Excise, ... vs Britannia Industries Ltd

(Arising out of Order-in-Appeal No. BR(2597)279/MI/2004 dated 21.12.2004 passed by Commissioner of Central Excise (Appeals), Mumbai-I)

For approval and signature:

Honble Mr. P.K. Jain, Member (Technical) and Honble Mr. S.S. Garg, Member (Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the :

CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

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Commissioner of central Excise, Mumbai-I Appellant Vs. Britannia Industries Ltd. Respondent

Appearance: Shri V.K. Shastri, Assistant Commissioner (AR), for appellant Shri Shridev Vyas, Advocate, for respondent

CORAM: Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S.S. Garg, Member (Judicial)

Date of Hearing: 1.7.2015 Date of Decision: 8.7.2015

ORDER NO

Per: P.K. Jain

This appeal is filed by the Revenue against the order of Commissioner (Appeals) dated 21.12.2004. In the said order, the Commissioner (Appeals) has rejected the Revenues appeal against the order of Deputy Commissioner dated 28.5.2003.

2. In brief, the issue is relating to refund arising out of Honble Supreme Courts order dated 9.1.1997. The issue in this case is relating to deduction of expenses relating to carriage and freight in the assessable value. The Honble Supreme Court in the said order relating to carriage and freight has observed as under:-

 .To decide that question evidence on question, of fact would be necessary. It is therefore, appropriate that we remit the matter to the Assistant Commissioner (Central Excise), Worli. Bombay to determine the question of liability of excise duty, after taking into consideration the claimed deduction under the aforesaid head on the basis of the evidence to be produced before him. The Assistant Commissioner shall decide the matter in the light of the observations made by this in M. R. F.'s case (supra). The question whether or not the appellant is entitled to any refund after the final determination is made would be decided by the competent authorities under section 11(B) of the Central Excise and Salt Act. as interpreted by the constitution Bench in Mafatlal Industries Ltd Vs. Union of India reported is {1997(89) ELT 247.SC}. Consequent to the said order, the Deputy Commissioner of Central Excise, Worli, Mumbai passed order dated 28.5.2003. Against the said order, the Revenue filed appeal before the Commissioner (Appeals) who, after going through the said order, found the order passed by the Deputy Commissioner is incorrect and dismissed the appeal of the Revenue. Against the said order, the Revenue has come in appeal.

3. There are two issues raised in the grounds of appeal. The first issue is that the amount has been sanctioned without the necessary documents being submitted by the respondent to show that the amount refunded on account of the cost element of carriage and freight was borne by documentary evidence as per the decision of the Honble Supreme Court. The second issue raised by the Revenue is relating to unjust enrichment.

4. Heard both sides.

5. We find from the grounds of appeal that there is no challenge by the Revenue that the cost element on carriage and freight was to be deducted. The challenge is that the Deputy Commissioner has passed the order without the necessary documents being submitted by the respondent. Learned counsel for the respondent submits that even after the passing of the interim order by the Honble Bombay High Court, though they were filing the price list but they were not paying duty on the carriage and freight element. Further, the respondent filed appeal to the Honble Supreme Court against the said order of the Honble Bombay High Court and it is on the direction of the Honble Supreme Court that they paid duty corresponding to the carriage and freight element. It was further submitted that this duty was not paid along with every gate pass but was paid on lump sum basis as determined by the jurisdictional Assistant Collector at that point of time and now they are claiming refund on the same basis. There cannot be any further document to compute the refund amount in the present facts and circumstances of the case.

6. As far as the second issue relating to unjust enrichment is concerned, the learned counsel further submitted that undoubtedly the refund is for the period from 1984 to 1989 and the assessments were provisional. The said assessments have been finalized only after the said order of the Honble Supreme Court. He further submitted that whether the doctrine of unjust enrichment would be applicable to the cases which pertain to the period prior to amendment in Section 11B, but processed after the said amendment had come up before the Larger Bench of this Tribunal in the case of CCE&ST, Vadodara-II vs. Panasonic Battery India Co. Ltd. reported in 2014 (303) ELT 231 (Tri.-LB). He further submitted that in para 8 of the said judgment, the Larger Bench has held that the amended provision will not be applicable to the provisional assessments pertaining to the year before the amendment. Under the circumstances, doctrine of unjust enrichment is not applicable to their case.

7. The learned AR reiterates the various grounds of appeal.

8. We have considered the submissions. As far as the first issue is concerned, the fact that the respondent was not paying duty on carriage and freight element while clearing individual consignment is not being disputed. In fact they started filing the price list only after the Honble Bombay High Court directed to pay the duty on the carriage and freight element and on cardboard box packaging and interest on distributors advances. They did not agree and filed appeal to the Honble Supreme Court. It is on the direction of the Honble Supreme Court that they paid the duty on these three components along with interest. The said duty was paid based upon the computation done by the Assistant Collector at that point of time and now they are claiming the refund on the basis of computation. Under the circumstances, we do not see what other documents are required to be submitted by the respondent to prove their claim. We, therefore, dismiss the appeal of the Revenue on this count.

9. The second issue is relating to doctrine of unjust enrichment. It is not disputed that the goods were cleared on provisional assessment basis and the provisional assessments have been finalized in 2002. We further find that the Larger Bench in the case of Panasonic Battery India Co. Ltd. (supra) has observed as under:-

8.?After analyzing the law laid down by Supreme Court in the case of CCE, Mumbai-II v. Allied Photographics Ltd. [2004 (166) E.L.T. 3 (S.C.)], Honble High Court in para 18 of the order in the case of Commissioner of Customs v. Hindalco Industries Ltd. (supra) has held that there is distinction between making of a refund and claiming of a refund and that the amendment carried out in Section 18(5) on 13-7-2006 cannot be held to be clarificatory and retrospective in nature. In para 21 of the judgment in the case of Hindalco Industries Ltd. (supra) it has been held that department is bound by law to make the refund without any claim being required to be filed for the period up to 12-7-2006. Entitlement to refund and finalization of provisional assessment under Rule 9B of the Central Excise Rules, 1944 is independent from the provision of refund under Section 11B of the Central Excise Act, 1944. Even under the amendment made by Notification No. 45/99-C.E. (N.T.), dated 25-6-1999 only the procedure established under sub-section (2) of Section 11B of Central Excise Act, 1944 has been made applicable to the refunds arising out of finalization of provisional assessments under Rule 9B of the Central Excise Rules, 1944. Accordingly the procedure regarding application of unjust enrichment to refunds on finalization of provisional assessments will be applicable to the provisional assessments made after 25-6-1999 and not before that date.

The addition of proviso to Rule 9B(5) has not been made with retrospective effect. Based on the ratio of the law laid down by Honble Supreme Court in the case of CCE, Mumbai-II v. Allied Photographics Ltd. (supra) and Gujarat High Court in the case of Commissioner of Customs v. Hindalco (supra), the doctrine of unjust enrichment will, therefore, not be attracted to the refunds pertaining to the finalization of provisional assessments for period prior to 25-6-1999 when the linking proviso under Rules 9B(5) of Central Excise Rules, 1944 was not existing. The linking provision under proviso to Rule 9B(5) was made by an amendment with effect from 25-6-1999 and will be applicable only w.e.f. 25-6-1999. The opinion of this Bench on the issue, therefore, goes in favour of the assessee and against the Revenue that for the period prior to 25-6-1999 unjust enrichment will not be applicable for refunds arising out of finalization of provisional assessments pertaining to the period prior to 25-6-1999 even if assessments are finalized after 25-6-1999. The regular Bench of WZB, Ahmedabad to decide the main appeals on the basis of this Larger Benchs view. In view of the decision of the Larger Bench, the doctrine of unjust enrichment will not be applicable in the facts and circumstances of the present case.

10. In the result, the appeal filed by the Revenue is dismissed.

(Pronounced in Court 8.7.2015)

(S.S. Garg) Member (Judicial) (P.K. Jain) Member (Technical)

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