2024-VIL-744-CESTAT-CHD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Sections 11B and 35F Central Excise, Act, 1944 - Payment of duty under protest - Refund of Pre-deposit - Applicability of doctrine of unjust enrichment - Appellants claimed exemption from payment of excise duty on clinker captively consumed in manufacture of cement, under Notification No.67/95-CE - Original authority denied exemption claimed by Appellants - Commissioner (Appeals) rejected appeals filed by Appellants - Appellants paid full amount of duty as pre-deposit and filed appeals before Tribunal - Pursuant to order passed by Supreme Court, Appellant claimed refund of pre-deposit - Adjudicating Authority rejected refund claims on ground that refund claims are hit by unjust enrichment as provided under Section 11B of the CEA, 1944 - Commissioner (Appeals) upheld orders of Adjudicating Authority - Whether duty continued to be paid by Appellants under protest during pendency of appeal qualifies to be pre-deposit for purposes of Section 35F of the Act - HELD - Appellants have deposited amount equivalent to duty under protest during pendency of their appeal before Commissioner (Appeals), Tribunal and Supreme Court, who were not inclined to grant a stay - Appellants had no choice but to deposit amount of duty in order to exercise their right to appeal - Amount deposited by Appellants is not towards Excise Duty, but by way of deposit under Section 35F of the Act for availing remedy of appeal - Many judgments of various Courts have reiterated same principle that in case any amount is deposited during pendency of adjudication proceedings or investigation, said amount would be in nature of deposit under protest - Amounts paid/deposited under protest during pendency of appeal are in nature of pre-deposit for purposes of Section 35F of the Act - Appeal is partly allowed - Refund of pre-deposit - Applicability of doctrine of unjust enrichment - Whether provisions of Section 11B of the Act and doctrine of unjust enrichment are applicable to refund of pre-deposit - HELD - Refund of amounts deposited during pendency of appeal are not subjected to provisions of Section 11B of the Act - Since amounts deposited by Appellants under protest during pendency of appeal is a pre-deposit for purposes of Section 35F of the Act, provisions of Section 11B of the Act are not attracted - It is not evident that Appellants have passed on duty to customers - Merely because amounts were debited to expenses in Profit & Loss Account, it does not necessarily follow that incidence of duty was passed on to buyers - Chartered Accountant in his certificate has been categorical in asserting that prices of cement being market driven, Appellants do not have capacity to pass on incidence of duty to customers - It is not open for Revenue to arrive at a conclusion in disregard of certificate without challenging or controverting same with cogent evidence and reasoning - Provisions of Section 11B of the Act and doctrine of unjust enrichment are not applicable to refund of pre-deposit - Appellants are entitled to refund of amount deposited during pendency of litigation, however, refund should be granted after deducting Cenvat Credit availed by them on inputs used in manufacture of clinker - Delayed refund - Entitlement of interest on delayed refund - Whether Appellants are eligible to claim interest on delayed payment of refund of pre-deposit - HELD - Appellants argued that Appellants are entitled for interest under Section 35FF as introduced w.e.f. 10-5-2008 - Provisions relating to payment of interest on delayed payment of refund of pre-deposit were introduced vide Section 35FF of the Act w.e.f. 10-5-2008 - Section 35FF of the Act as it stood on 10-5-2008 did not provide for payment of interest on deposits made under main Section 35F of the Act - W.e.f. 6-8-2014, amended Section 35FF of the Act provides for payment of interest on delayed refund of amount deposited under main Section 35F of the Act - Argument of Appellants that Appellants are eligible for interest on delayed refund w.e.f 10-5-2008 is not acceptable - Appellants are eligible for interest on delayed refund of amounts deposited by them after 6-8-2014.
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