Custom, Excise & Service Tax Tribunal4. Whether Order Is To Be Circulated To ... vs Cce, Trichy on 26 February, 2008IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI

				E/228/2004

(Arising out of Order-in-Appeal No. 286/2003 (TRY) (ADK) dated 30.10.03, passed by the Commissioner of Customs and Central Excise (Appeals),  Trichy)

For approval and signature	

Honble P. G.CHACKO, Member (Judicial)
Honble P. KARTHIKEYAN, Member (Technical).
_________________________________________________
1.    Whether Press Reporters may be allowed to see  :	  
       the Order For Publication as per Rule 27 of the
       CESTAT (Procedure)Rules, 1982?

 2.   Whether it should be released under Rule 27 of   :
       the CESTAT (Procedure)Rules, 1982 for publication 
       in any authoritative report or not?

3.    Whether  the Honble Member wishes to see the  :
       fair copy of the  Order.

4.    Whether order is to be circulated to the	 	    :
       Departmental Authorities?  __________________________________________________________________
The Superintending Engineer, :	Appellant
M/s. TNEB, Nagapattinam   
			 	 
			Vs.

CCE, Trichy				:	RespondentAppearance
						
Shri P.C. Anand, Consultant for the appellant
Dr. Nitish Birdi, SDR for the respondent  

CORAM
	
Shri P.G. CHACKO, Member (Judicial) 
Shri P. KARTHIKEYAN, Member (Technical)	

				
                                       Date of hearing  	         : 26.02.08
                                       Date of pronouncement:Final ORDER No.________/2008

Per P. KARTHIKEYAN.The Superintending Engineer, TNEB, Nagapattinam, has filed this appeal.  In the impugned order the Commissioner (Appeals) sustained the order of the original authority. Original Authority had sanctioned refund of Rs. 43,50,765/- and credited the same to the Consumer Welfare Fund.  He had also rejected the refund claim to the extent of Rs. 17,53,427/-.2.	The facts of the case are that during the period 1989 to 1994, the RCC pole yards located in Nagapattinam circle of the Tamil Nadu Electricity Board (TNEB, Electricity Board, Board), got manufactured RCC poles through jobworkers (contractors). During the material period, the TNEB paid the excise duty due on the poles cast in these yards and released for consumption by the TNEB.    Following the decision of the Tribunal that the Electricity Board was not the manufacturer of the RCC poles, the Superintending Engineer, TNEB, Nagapatnam, claimed refund of duty to the tune of Rs.61,04,192/- from the department.  The jurisdictional Assistant Commissioner of Central Excise, Tanjavur Division decided the claim of TNEB and sanctioned Rs.43,50,765/-.  He ordered deposit of this amount in the Consumer Welfare Fund as the claimant had not established that this amount of excise duty had not been passed to the consumers of power.  As regards the balance of Rs.17,53,427/-, not evidenced to have been deposited with the department either with RT12 or PLA was rejected.  Payment of this amount was not substantiated by duty paying documents such as GP1 or TR6 challans also.  The present appeal is filed against the impugned order of the Commissioner of Central Excise (Appeals) affirming the above order of the Assistant Commissioner of Central Excise, Tanjavur.3.    As regards unjust enrichment of the Electricity Board involved in the refund of the amount of  Rs.61,04,192/- claimed, the appellant has submitted that the Tamil Nadu Government which decide the power tariff do not take into account excess duty payment in the computation.In the case of Commissioner of Customs, Aircargo unit,New Delhi Vs. Maruti Udyog Ltd.reported in 2003 (155) ELT 523 (Tri.), the Tribunal observed that the revenue had not produced any material to rebut the findings of the Commissioner based on the balance sheet, Chartered Accountants certificate and constant prices of the car brought on record by the respondent.Relying on another decision of the Tribunal inHero Honda Ltd.case wherein the appellant had shown the disputed refund amounts as receivable from the Government in the balance sheet and annual report as well as the Chartered Accountants certificate to the effect that the appellants had not passed on the incidence of deposit to the customers, the Tribunal had upheld the order of the Commissioner (Appeals) and dismissed the appeal filed by the Revenue.  The appellant submits that its accounts showed the impugned amount as a recoverable with the excise authorities.	In their balance sheet the impugned amounts were shown as deposits with excise authorities.  It showed that the amount claimed as refund had not been passed on to the buyers.4.	The appellant cited the decision of the Tribunal in the case ofBrindavan Tex Processors Pvt. Ltd., Vs. CCE Bangalorereported in 2006 (196) ELT 61 (Tri.-Bang.), wherein the Tribunal had found that the appellants therein had not passed on the refund claimed as the balance sheets for the relevant years showed the refund amount claimed by the assessee as receivable.According to the appellant this ratio was followed in Coring SA Vs. CCE New Delhi reported in 2005 (192) ELT 355 (Tri.) . It was held that the bar of unjust enrichment was not applicable as the excess duty paid by the appellants had been shown as deposit with the customs and not passed on to the buyers. Appellant submitted that the excise duty paid on poles did not affect the determination of power tariff.5.	The Electricity Board ran in loss as the Government had to also serve the social causes such as distribution of electricity at lower rates to the under privileged and the agricultural sector.In the case ofUP Twiga Fibre Glass Ltd. Vs. CCE[2000 (116) ELT 537], it was held that when there was negative sales realization, it indicated that the incidence of duty had not been passed on to the customers.  In the case of the appellants the recoveries were less than the cost of generation and transmission.  The Board was run on State Government grants.  In a similar case of TNEB, vide Final Order reported in 2004 (164) ELT 84 (T), it was decided that unjust enrichment did not apply.6.	As regards the denial of refund to the extent of Rs.17,53,427/-, the appellant prayed that photocopies of TR6 challans may be ordered to be accepted in proof of payment of the amount claimed as refund.InJay Engineers Works Ltd. Vs. CCE Hyderabad[2003 (158) ELT 718], it was decided that refund could not be refused for non supply of original TR6 challans if otherwise eligible and payment could be verified from other documents filed with the department.7.	The Ld. Counsel for the appellants reiterated the grounds taken in the appeal. He submitted that the refund claim was consequential to the department accepting that TNEB is not the manufacturer of RCC/PSC poles and plates. He submitted that allowing an appeal involving similar facts inTNEB, Superintending Engineer Vs. CCE Trichyreported in 1999 (106) ELT 499 (Tri.), this Bench had made the following observations.6. On a careful consideration of the submission, we? notice that the appellants had come up in a large number of appeals against the orders passed by the lower authorities holding them as manufacturers. The Tribunal in the noted orders examined the terms of contract and hold that the appellants are not the manufacturers but the real manufacturer is the contractor and on that ground allowed all their appeals and dismissed the Commissioners appeal in Appeal No. E/1245/95. Therefore it follows that the duties paid by them on protest is required to be refunded in terms of the refund claim filed by them. The refund claims were rejected solely on the ground that they are the manufacturers and not the contractors and duty had been rightly demanded and collected from them. As the Tribunal has not categorically held that they are not the manufacturers, therefore the duty paid by them is required to be refunded and further question of unjust enrichment also does not arise in this case. In that view of the matter, following the ratio of the cited judgments in the appellants own case, we allow the appeals with consequential reliefs.

Revenue had not challenged this decision. In view of the above ratio the impugned claim did not involve unjust enrichment. Ld SDR reiterated the findings in the impugned order.8.	 We have carefully considered the records of the case and submissions by both sides.  From the records furnished by the appellants, we find that the balance sheets for the year ending 31.3.2006 for Nagapattinam circle show a total current assets of Rs. 200,97,12,269/-. Under  Schedule 26, Total current assets, break up of current assets was given.  Sundry receivables are shown to account for Rs.109,45,660/-. Breakup of sundry receivables was given in Schedule 26 (e). Item 7, Deposits, of the schedule shows Rs. 63,93,515/-.  In the monthly statement of accounts for the month of March 2006, Rs. 61,04,192/- was shown as deposit with excise authorities.  This is the amount in dispute covered by the subject appeal.  We find that the appellant has furnished a Chartered Accountants certificate which, inter alia, certifies that the impugned amount of Rs.61,04,192/- paid to the excise authorities under protest during 1985 to 1994 was not charged to the cost of manufacture of RCC/PSC poles or to the profit and loss account but was kept as an advance with the excise department.  The certificate also states that this amount had not been recovered from the consumers.  The ratio of the decisions of the Tribunal in CC Vs. Maruti Udyog Ltd. (supra) is that bar of unjust enrichment did not apply when the excess duty paid by the appellants was shown as deposit with the department.  In Brindavan Tex Processors Pvt.Ltd. (supra), the Tribunal found that the appellants therein was eligible for the refund amount claimed as the refund amount was shown as excise duty amount receivable in the assessees audited balance sheet.9.	The appellant has shown that the recoveries from distribution of power are much less than the cost of generation and transmission of power in various years.  The Board is run with the subsidy extended by the State Government periodically.  Taking into account also the Chartered Accountants certificate showing the impugned amount as  receivable in their accounts, we hold that the impugned refund claim does not suffer from the vice of unjust enrichment. We also find that inSuperintending Engineer, TNEB Vs. CCE, Chennaireported in 2004 (164) ELT 84 (Tri.-Chen.), this Bench  had held that unjust enrichment did not apply to refund of excess duty paid on naptha as the assessee had shown that the power tariff fixed much earlier had remained constant, the appellants had incurred huge losses and the refund amount claimed had been shown as sundry receivables in their balance sheets. This decision lends support to our finding as regards unjust enrichment in grant of the impugned refund claim.9.1.	We have considered the ratio ofTNEB, Superintending Engineer Vs. CCE Trichy(supra) cited by the Ld. Consultant.We do  not find it advance the case of the appellant in view of the Apex Courts decision inSahakari Khand  Udyog Mandal Ltd Vs CCE[2005(181)E.L.T.328]  that irrespective of applicability of Section 11B of the Act, the doctrine of unjust enrichment could be invoked to deny the refund to which a person is not otherwise entitled.10.	As regards the denial of refund on the ground of the appellants failure to substantiate the payment of the amount claimed in the absence of any of the following documents GP1s, TR6 challans, PLA register and RT12 returns in original, we find that the impugned order calls for no intervention.  The department cannot refund any amount of duty paid  unless the payment is evidenced by any of the above mentioned documents/ register/returns in original.  In the circumstances, we order that refund shall be allowed where evidence of duty payment is produced.  The appellants shall produce the originals of the CA certificate and audited balance sheets covering the material period produced before us. As regards the claim for refund denied for want of duty paying documents, the revenue is free to accept bank scrolls of the link/focal bank showing deposit of the impugned payments in the PLA account in evidence of original payment of duty. Board shall be at liberty to produce any evidence in this regard acceptable to revenue. This part of the claim is remanded. Appellant shall be afforded adequate   opportunity for an effective hearing. The appeal is disposed.(Order pronounced in open Court on                     )



(P.KARTHIKEYAN)               		(P.G. CHACKO)
      MEMBER (T)                           	   MEMBER (J)


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