M/S United Phosphorous Ltd vs Commissioner, Central Excise & Service ...

Appeal No.E/13546/2013-DB [Arising out of OIA No.SUR-EXCUS-002-APP-179-13-14, dt.30.08.13, passed by Commissioner (Appeals), Central Excise & Service Tax, Surat-II]

M/s United Phosphorous Ltd. Appellant

Vs

Commissioner, Central Excise & Service Tax, Surat-II Respondent

Represented by:

For Appellant: Shri P. Paranjape, Advocate For Respondent: Shri Alok Srivastava, Authorised Representative

For approval and signature:

Honble Mr. P.K. Das, Member (Judicial) Honble Mr. P.M. Saleem, Member (Technical)

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

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

3. Whether their Lordships wish to see the fair copy of Seen the order?

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

CORAM:

HONBLE MR. P.K. DAS, MEMBER (JUDICIAL) HONBLE MR. P.M. SALEEM, MEMBER (TECHNICAL)

Date of Hearing/Decision: 19.10.2015

Order No. A/11527/2015, dt.19.10.2015

Per: P.K. Das

After hearing both the sides and on perusal of the records, we find that the main contention of the learned Advocate for the Appellant is that they have filed this appeal on a limited issue of rejection of refund claim of Rs.1,01,37,551.00 for the period December 1997 to September 2000. It is contended by the learned Advocate that the refund claim is arising out of the finalisation of the provisional assessment under Rule 9B of the erstwhile Central Excise Rules, 1944. By Notification No.45/99-CE(NT), dt.25.06.1999, a proviso was inserted in Rule 9B of the said Rules 1944, as under:-

Provided that, if an assessee is entitled to a refund, such refund shall not be made to him except in accordance with the procedure established under sub-section (2) of Section 11B of the Act.

2. The Larger Bench of the Tribunal in the case of CCE & ST., Vadodara-II Vs M/s Panasonic Battery India Co. Ltd  2013-TIOL-1367-CESTAT-AHM-LB held that the principle of unjust enrichment will not be applicable for refund arising out finalisation of provisional assessment pertaining to the period prior to 25.06.1999, even if assessment are finalised after 25.06.1999. The relevant portion of the said decision is reproduced below:-

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.

3. The learned Advocate submits that after 25.06.1999, they are eligible for refund in view of the decision of the Hon'ble Gujarat High Court in the case of CCE & Cus Vs Alembic Ltd  2010 (262) ELT 112 (Guj). On a query from the Bench, the learned Advocate fairly submits that the Adjudicating authority had not given any finding on the decision of Hon'ble Gujarat High Court. He further submits that the decision of the Larger Bench of the Tribunal came after passing of the impugned Adjudication order.

4. We find that the refund claim was rejected on the ground of non-fulfillment of the condition of unjust enrichment.

In view of the decision of the Larger Bench of the Tribunal in the case of Panasonic Battery India Co. Ltd (supra), unjust enrichment will not be applicable prior to 25.06.1999. The refund claim for the period on or after 25.06.1999 is required to be considered in the light of the decision of Hon'ble Gujarat High Court.

5. In view of the above discussion, we hold that the refund claim on finalization of provisional assessment under Rule 9B of the erstwhile Rules, 1944 for the period prior to 25.06.1999 cannot be rejected on the ground of unjust enrichment. Accordingly, we set aside the impugned order to the extent of rejection of refund claim of Rs.1,01,37,561.00. We allow the refund claim for the period prior to 25.06.1999, following the decision of the Larger Bench of the Tribunal and to consider the refund claim from 25.06.1999 onwards in the light of the decision of Hon'ble Gujarat High Court in accordance with law. Needless to say that the Adjudicating authority shall give proper opportunity of hearing before passing the order. The appeal filed by the Appellant is remanded on the above terms.

(Dictated & Pronounced in Court)

(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial)

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