MAHALAKSHMI CABLE INDUSTRIES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The following substantial question of law was framed for the purpose of this appeal: -

(2.) The facts briefly are that the appellant had paid excise duty during the period between 22.2.1999 and 28.8.1999. The amounts were deposited towards excise duty payable. The adjudication order for the relevant period was made on 23.6.2004 pursuant to a show cause notice. Thereafter, the assessee/appellant applied for refund of the amount deposited in 1999 aggregating to Rs.4,12,590/-. It was contended that the amounts had been paid under protest and under directions of the audit party. The refund claimed was processed and allowed by an order dated 3.12.2004. The Assistant Commissioner while allowing the refund application, inter alia, held as follows: - "I have carefully examined the refund claim of the applicant. The initial issue involved was whether the place of removal would be factory gate or the buyers premises and whether the amount of freight and insurance charged by the applicant from their customers should form part of the assessable value and the same was held as not includable. Further, the Order-in-Original dated 23.6.04 has been accepted by the Department. An Affidavit dated 25.11.04 from Shri Rajiv Chanana, Proprietor of M/s Mahalakshmi Cables Industries confirmed that the refund amount in question was paid by the applicant and that they have not issued any debit or credit notes in respect of the duty for which the refund application pertains. Further, the accounts of the applicant have been audited by Central Excise Officers even after 1999 but no such debit or credit note passing on the incidence of duty to their customers has been report. Thus, the applicant had not passed on the incidence of duty to the buyer, therefore, the provisions of unjust enrichment given in Section 11B of Central Excise Act, 1944 would also not be applicable in this case. In view of the above, the applicant is entitled to claim the refund of Rs.4,12,590/-."

(3.) The Revenue, claimed to be aggrieved, applied for review before the Commissioner of the above order, and vide order dated 2.12.2005, the Commissioner directed the Assistant Commissioner to prefer an appeal before the Commissioner (Appeals) against the refund order. In the course of the appeal, the assessee preferred cross objections contending that the refund was validly made. It was submitted that the amounts were in fact paid as a consequence of directions of the concerned officials and, therefore, were not voluntary. The assessee wished to rely upon second proviso of Section 11B of the Central Excise Act which provides that limitation period for filing the refund application would not apply where the duty is paid under protest. The assessee's contentions were, however, overruled by the Commissioner (Appeals): -