M/S. Shreeji Concast Limited vs Commissioner Of Central Excise & S.T., ...

(Arising out of OIA-8/2008/BVR/KC/COMMR-A/AHD dated 12.02.2008 Passed by Commissioner (Appeals) Central Excise & Service Tax, Bhavnagar)

M/s. Shreeji Concast Limited : Appellant (s)

VERSUS

Commissioner of Central Excise & S.T., Bhavnagar : Respondent (s)

Represented by :

For Appellant(s) : Shri Kuntal Parikh, Advocate

For Respondent(s) : Shri J. Nair, A.R.

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial)

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Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial)

Date of Hearing / Decision : 05.01.2015

ORDER No. A/10007 / 2015 Dated 05.01.2015

Per : Mr. P.K. Das;

The appellants were engaged in the manufacture of MS Ingots classifiable under Chapter 72 of Central Excise Tariff Act, 1985. They had opted for payment of duty under Section 3A of Central Excise Act, 1944 with effect from 01.09.1997. The appellant by their declaration dated 22.10.1997 declared that the furnace head was deteriorated and the capacity was reduced to 4 MT instead of 5 MT as declared earlier. But, the Commissioner of Central Excise provisionally determined the Annual Capacity of Production as 5 MT under Rule 96ZO of the erstwhile Central Excise Rules, 1944. The appellant discharged the duty liability on the basis of 5 MT and contested before the Tribunal. By Final order No. A/859 to 860/WZB/AHD/07 and S/494/WZB/AHD/2007 dated 24.4.2007, the Tribunal held that the production capacity during the relevant time was within 4 MT. The appellant filed refund claim on the basis of the order of the Tribunal. The adjudicating authority sanctioned the refund claim, but, it was credited to the Consumer Welfare Fund as provided under Section 12C of the Central Excise Act, 1944 on the ground that the appellant failed to prove that the incidence of duty was not passed on to the customers. Commissioner (Appeals) upheld the adjudication order. Hence, the appellant filed this appeal.

2. Learned Advocate on behalf of the appellant drew the attention of the Bench to relevant portion of the impugned order to substantiate that the appellant discharged the duty liability on the basis of Annual Capacity of Production (ACP) provisionally fixed by the Commissioner of Central Excise. He submits that the appellant paid the duty on provisional basis during the period September 1997 to April 1998. So, the principles of unjust-enrichment would not be applicable as held by the Larger Bench of the Tribunal in the case of CCE & ST, Vadodara-II vs. Panasonic Battery India Company Limited  2014 (303) ELT 231 (Tri. Larger Bench). He also relied upon the following decisions of the Tribunal:-

(a) B.S. Processors vs. CCE, Ahmedabad  2011 (270) ELT 289 (Tri. Ahmd.)

(b) Hindustan Composite Limited vs. CCE, Mumbai  2014 (304) ELT 574 (Tri. Mum.)

(c) CCE, Ahmedabad vs. Anjani Fabrics Limited  2008 (229) ELT 412 (Tri. Ahmd.)

He also relied upon the Board Circular No. 326/42/97-CX dated 25.7.1997, wherein it is stated that in case there is likely to be any delay in determining the capacity of production it may be determined on a provisional basis. He also placed a Chartered Accountant certificate to establish that the duty element has not been passed to the customers.

3. On the other hand, Learned Authorised Representative for the Revenue reiterates the findings of the Commissioner (Appeals). He submits that the decision of the Larger Bench of the Tribunal in the case of Shivagrico Implements Limited - 2006 (199) ELT 44 (Tri. LB) is directly on the issue and held that unjust-enrichment would be applicable in the case of Compound Levy Scheme. He also relied upon the decision of the Tribunal in the case of Southern Ferro Limited vs. UOI - 2009 (245) ELT 517 (Tri. Chennai.).

4. After hearing both the sides and on perusal of the records, I find that the appellant discharged the duty liability on the basis of ACP provisionally fixed by the Commissioner of Central Excise as 5 MT. It was subsequently re-determined by the Tribunal as 4 MT instead of 5 MT. The refund claim of the excess duty, was rejected by the lower authorities on the ground of unjust-enrichment. The Larger Bench of the Tribunal in the case of Shivagrico Implements Limited (supra), held that the payment of duty erroneously under Section 3A of Central Excise Act, 1944 being in the nature of duty under Compounded Levy Scheme attracts the principles of unjust-enrichment. The Single Member Bench of the Tribunal in the case of Southern Ferro Limited vs. CCE, Belgaum following the decision of the Honble Supreme Court in the case of Mafatlal Industries Limited vs. UOI - 1997 (89) ELT 247 (SC) and the Larger Bench of the Tribunal in the case of Shivagrico Implements Limited (supra) rejected the appeal on an identical issue, filed by the assessee. In my considered view, the said decisions are squarely applicable in the facts and circumstances of the present case.

5. The Larger Bench decision of the Tribunal in the case of Panasonic Battery India Company Limited (supra), as relied upon by the Learned Advocate, is in the context of payment of duty under Rule 9B of the erstwhile Central Excise Rules, 1944. In the present case, the appellant had not paid duty under Rule 9B of the erstwhile Rules. The decision of the Tribunal in the case of B.S. Processors (supra), relied upon by the learned Advocate, where, there were no production during the period and till the whole month of Compound Levy Scheme and in this context, the Tribunal observed that when there was no production during this period, the question of clearance of goods and payment of duty do not arise at all and principles of unjust-enrichment can not be invoked. The other decisions relied upon by the learned Advocate are not applicable in the facts and circumstance of this case.

6. I find that the facts and circumstances of the present case are squarely covered by the decision of the Larger Bench of the Tribunal in the case of Shivagrico Implements Limited (supra). However, the learned Advocate placed Chartered Accountant certificate to substantiate that the duty incidence was not passed to the customers. In my considered view, the appellant should be given an opportunity to place this certificate before the adjudicating authority to establish that the duty was not passed on to the customers, in the interest of justice.

7. In view of the above discussions, the impugned orders are upheld on merits, but, the adjudicating authority shall examine the Chartered Accountant certificate and any other evidence to establish that the incidence of duty was not passed on and has fulfilled the conditions of unjust-enrichment. Appeal is disposed of in above terms.

(Dictated and pronounced in the Court)

(P.K. Das) Member (Judicial) ..KL

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