PSL LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) APPEAL No. E/13022/2013 -DB has been filed by the appellant -M/s. PSL Ltd. against OIA No. 179/2013(RAJ) CE/AK/Commr(A)/Ahd/dated 26 -4 -2013. Appeal No. E/12536/2013 has been filed by the Revenue against the same OIA dated 26 -4 -2013, passed by the first appellate authority. Brief facts leading to these appeals are that the appellant set up a unit of bare pipe manufacturing before 31 -12 -2005 for getting benefit under the Notification No. 39/2001 -C.E., dated 31 -7 -2001 and also set up a coating unit after 31 -12 -2005. CESTAT Ahmedabad vide Order No. A/1634 -1637/WZB/AHD/2010, dated 26 -8 -2010 ordered that the coating unit set up after 31 -12 -2005 will not get the benefit of the said notification, accordingly, appellant obtained a fresh registration for the same, pursuant to the order of Tribunal. The lower adjudicating authority, while deciding the refund claim under the said notification for the period December, 2007 to March, 2008 sanctioned the refund to the tune of Rs. 15,87,45,674/ - towards Bare Pipes, Bare Pipes cleared for coating and M.S. Scrap and rejected refund to the tune of Rs. 4,69,25,261/ - in respect of value of Coated Pipes and Coating Scrap. Further, the lower adjudicating authority also held that exemption is available to the Excise duty or additional Excise duty and exemption notification did not cover Education Cess and Secondary & Higher Secondary Education Cess (SHE) and therefore had not sanctioned the claim of the appellant to that extent. The lower authority further held that as clarified vide D.O.F. No. 256/2/2001 -TRU, dated 17 -10 -2001, the refunds under the notification should not be treated as refunds under Section 11B of the Central Excise Act, 1944 and would not be subject to the principles of unjust enrichment. While sanctioning the above refund, the lower adjudicating authority deducted an amount of Rs. 44,28,923/ - sanctioned excessively during the period October, 2006 to February, 2007 on account of clearance of Coated Pipes and Coating Scrap, along with interest of Rs. 29,85,461/ - thereon. The lower adjudicating authority also deducted an amount of Rs. 9,93,832/ - on account of Cenvat credit available on input services during the period December, 2007 to March, 2008, in respect of coating division, where documents were in the name of Bare Pipe division. Under the impugned OIA dated 26 -4 -2013, the first appellate authority upheld the O -I -O No. 01 -04/2012 -13, dated 14 -5 -2012 passed by the adjudicating authority except chargeability of interest of Rs. 29,85,461/ - on erroneously refunded amount as per Para 9 of the OIA dated 26 -4 -2013. Against this portion of OIA, holding that interest not payable by M/s. PSL Ltd., Revenue has filed Appeal No. E/12536/2013 on the grounds that refund for the period 31 -12 -2005 was with respect to duty paid as normal clearances outside the mechanism of Notification No. 39/2001 -C.E., dated 31 -7 -2001 and that interest was recoverable from appellant M/s. PSL Ltd.

(2.) SHRI Anand Nainawati (Advocate) appearing on behalf of the appellant -M/s. PSL Ltd. argued that refund of Education Cess and SHE Cess is admissible to his client as these levies are not independent inasmuch as whenever the Basic Excise Duty is 'NIL', there will be no liability towards payment of Education Cess and SHE Cess. Ld. Advocate relied upon the following case laws in support of his arguments: - -

(3.) HEARD both sides and perused the case records. For appreciating the admissibility of refund of Education Cess/SHE Cess under Notification No. 39/2001 -C.E., it will be relevant to glance through the opening paragraph of Notification No. 39/2001 -C.E., dated 31 -7 -2001 which reads as follows: - -