ORDER
P. Karthikeyan, Member (T)
1. This is an appeal filed by the Revenue against the Order in Appeal No. 44/2001 (M-I) dated 30.5.2001 passed in appeal against the order of the Assistant Commissioner, D Division, Chennai I Commissionerate rejecting three refund claims filed by M/s Indian Steel and Allied Products, for a total amount of Rs 10,57,6317- on the grounds of time bar and unjust enrichment. The facts of the case are that the respondent company was engaged in the manufacture of Iron and Steel re-rolled products falling under Chapter 72 of CETA Schedule. They were paying duty based on Annual Capacity of Production under Section 3A of the Central Excise Act, 1944. Initially, vide Commissioner’s letter dated 25.3.98, their Annual Capacity of Production was fixed at 6626.347 MT per year with monthly duty liability of Rs 1,65,659/- in terms of Rule 96ZP of Central Excise Rules. This was effective from September 1997. The Annual Capacity of Production was re-determined vide Commissioner’s letter dated 1.2.2000 at 3227.990 MT with monthly duty liability as Rs. 80,700/- per month accepting the assessee’s claim that theirs was not a pusher type furnace but a batch type one. Owing to change in the parameter d, the ACP was revised and monthly duty liability fixed at Rs. 72783/- in terms of Rule 5 of the Hot Rerolling Steel Mills Annual Capacity Determination Rules 1997 with effect from 5.10.98. Again, based on ratio of the decisions of Tribunal in the case of Awadh Alloys (P) Ltd. v. CCE Meerut reported in 1999 (112) 19 (Tribunal) and Durga Agro Industries v. CCE Jaipur , the Commissioner vide letter dated 16.11.2000 re-fixed the Annual Capacity of Poduction as 1235.16 MT with duty liability as Rs 30,880/- per month for the period from 5.10.98. The appellant filed three refund claims for a total of Rs 10,57,631/- being the excess duty paid in view of the above downward revisions. After due process of law, the lower authority rejected the claims.
2. The assessee had claimed refund of the duty excess paid owing to downward revision for clearances during September 1997 to September 1998 and October 1998 to March 2000. The Assistant Commissioner had rejected the refund claims for the reason that the claims had been time barred as the assessee had not followed the procedure prescribed in Rule 233B of the Central Excise Rules, 1944 but had only endorsed the TR-6 challans that payment of duty had been made under protest. The assessee had not proved that the duty claimed as refund had not been passed on to their buyers.
3. In appeal against the above order, the Commissioner (Appeals) observed that the respondents had vide letters dated 2.1.98, 10.2.98 and 28.2.98 intimated the department that duty had been paid under protest. He found that the department had also acknowledged these letters. According to him, since their refund claims were filed within six months of 16.11.2000, when the Commissioner finally fixed the ACP , the refund claims were not time barred.
4. As regards unjust enrichment, the Commissioner found that the asssesee had not indicated the duty amount in the statutory invoices as well as commercial invoices. They had produced Chartered Accountant’s certificate, copy of certified balance sheet and also sworn affidavit as laid down in this regard in the decisions reported in 1997 (93) ELT (3) SC and of the apex court. From the above, he concluded that duty claimed as refund had not been passed on to their buyers.
5. In the appeal, the Revenue has argued that the respondents had not filed letters of protest with the Assistant Commissioner as per procedure laid down in the Rule 233B and explained by the Hon’ble Supreme Court in the case of Mafatlal Industries Ltd. . They had only filed letters with the Range Officer without indicating the grounds of protest. Moreover the rule required that the assessee lodge protest with the Assistant Commissioner indicating the grounds of protest. The Commissioner (Appeals) had made wrong reliance on the guidelines of the Hon’ble Supreme Court as regards payment of duty under protest, as the guidelines applied to cases pending in appeal/writ/reference application before the Courts. As regards unjust enrichment, filing of sworn affidavit by the respondents also applied only to such cases. It was observed by the Hon’ble Supreme Court that the fact whether the manufacturer had shown duty separately in the invoice or not did not lead to a conclusive inference as regards passing on of duty paid.
6. The learned SDR, Smt. R. Bhagyadevi reiterated the points made in the appeal of the Revenue.
7. Shri R. Raghavan, learned Counsel for the respondents supported the order of the Commissioner (Appeals). He stated that duty had been paid under protest and the same had not been passed on to the customers. Bar of unjust enrichment was not attracted in the case as it had been established before the Commissioner (Appeals) with balance sheet, Chartered Accountant’s Certificate, duty paying documents, commercial invoice and sworn affidavit that the duty claimed as refund had not been passed on. Order of the Commissioner (Appeals) was substantiated by various judicial authorities which he had cited. He also submitted that several show cause notices had been issued to the respondents demanding duty short paid compared to the duty determined as payable by the Commissioner at the time of clearance, though there was no short levy compared to liability finally determined by the Commissioner at a later date for the respective periods. These show cause notices were kept pending owing to delay in finally deciding the application for refund. He requested that the matter may be remanded to the original authority for detailed examination and disposal.
8. We have given careful consideration to the rival submissions and the records of the case. As regards Rule 233B, the Hon’ble Supreme Court in their judgment in the case of Mafatlal Industries Ltd. v. UOI made the following observations in para 85 of its judgment.
The rule no doubt requires the assessee to mention the “grounds for payment of the duty under protest” but it does not empower the proper officer, to whom the letter of protest is given, to sit in judgment over the grounds. The assessee need not particularise the grounds of protest. It is open to him to say that according to him, the duty is not exigible according to law. All that the proper officer is empowered to do is to acknowledge the letter of protest when delivered to him and that acknowledgement shall be the proof that the duty has been paid under protest. A reading of the rule shows that the procedure prescribed therein is evolved only with a view to keep a record of the payment of duty under protest. It is meant to obviate any dispute whether the payment is made under protest or not. Any person paying the duty under protest has to follow the procedure prescribed by the Rule and once he does so, it shall be taken that he has paid the duty under protest. The period of limitation of six months will then have no application to him.
It is seen that the order dated 25.3.98 fixing the monthly duty at Rs. 1,65,659/- was passed taking into account the RPM as 739 and the factor ‘d’ as 232.5 mm. The Mill was taken as pusher type Mill. The protest registered by the respondent in letter dated 7.10.98 was on the ground that the furnace was batch type and not pusher type adopted for calculation. It is seen from the respondent’s letter dated 7.10.8 addressed to the Commissioner that the letter contained the ground for payment of duty under protest. Therefore, the said letter is in accordance with Rule 233B of Central Excise Rules, 1944 as they existed at the material time and limitation would not apply for payment of duty since 7.10.1998. It is seen that the said letter was received in the office of the Assistant Commissioner and the office of the Commissioner also on 7.10.98 as per the seals appearing on the letter. The letter also carries the seal of the Sudpt, Range D Division of Chennai-1 Commissionerate. Commissioner (Appeals) observed that the respondents had vide letters dated 2.1.98, 10.2.98 and 28.2.98 intimated the department that duty was being paid under protest. These letters were not produced by the respondent despite specific directions from the Bench. Therefore these could not be considered. This ground mentioned in their letter dated 7.10.98 ceased to be in effect when their claim that the furnace was batch type was accepted by the Commissioner vide his order dated 1.2.2000. The admissibility of the claims has to be regulated considering limitation with reference to this fact.
9. As regards the question of unjust enrichment, even though the sworn Affidavit was directed to be filed by the Hon’ble Supreme Court in the Mafatlal Industries case (supra) in respect of cases pending in Courts, Affidavit can be accepted and treated as averments/assertion also in cases where, refund claims are made before departmental authorities along with other evidence. It is seen that before the original authority also, the respondents had made the submission that the amount claimed had been accounted as receivables in the balance sheets and therefore, the same had not been passed on to the customers. This claim merits consideration, since if the amount was accounted as expenditure for the relevant year it would be obvious that the same had been accounted as cost of production and, therefore, passed on in the sale price of products manufactured. Another claim made before the original authority was that the respondent’s sale price had remained unchanged before and after imposition of different rates of monthly levy which proved that they had not passed on the duty claimed as refund. The assessee had a composite price and therefore duty was not separately shown in the invoices. In this case price apparently did not vary when the duty was reduced a number of times. This aspect also needs further examination and the assessee’s sale price before imposition of compounded levy also requires to be compared. We find that the case has to be examined afresh. The original authority can call for any other evidence from the respondent, if he considers it necessary to examine the question of unjust enrichment. In the circumstances, we remand the matter to the original authority for comprehensive examination of the claim and decision afresh in the light of our above observations. The appeal is disposed.
(operative portion of this order was pronounced in the open Court on 6.4.2006)