M/s. Global Poly Bags (P) Limited vs Commissioner Of G.S.T. And Central Excise

This appeal is filed by the assessee against the Order-in-Appeal No. 306/2019 dated 14.10.2019 passed by the Commissioner of G.S.T. and Central Excise (Appeals), Madurai.

The relevant facts required for consideration are as under:

(i) A case was booked by the DGCEI, Madurai against the appellant-assessee under O.R. No. 2/2006/DGCEI/MDU dated 07.03.2006, for short payment of Education Cess on Domestic Tariff Area Sales. In that connection, the appellant paid an amount of Rs.5,00,000/- under protest vide challan No. 177/2005-06 dated 15.03.2006 as per the above said DGCEI's Offence Report as advance deposit of Educational Cess.

(ii) Subsequently, Show Cause Notice No. 02/2007-CE dated 10.08.2007 was issued to the assessee and after due process of law, the Adjudicating Authority vide Order-in-Original No. 09/2007 dated 20.11.2007 confirmed the demand of Rs. 13,98,763/- with interest, vacated the protest recorded by the appellant while paying advance deposit of Rs.5,00,000/- and ordered appropriation of the same towards the amount of demand.

(iii) On assesee's appeal, the First Appellate Authority vide Order-in-Appeal No. 156/2009 dated 11.05.2009 set aside the impugned Order-in-Original and directed that the Education Cess payable by the assessee should be quantified for only one year from the date of issue of Show Cause Notice.

(iv) On further appeal, the CESTAT, Chennai Bench vide Final Order Nos. 42761 to 42763 of 2017 dated 31.10.2017 set aside the impugned order thereby allowing the appeals with consequential relief to the appellant.

(v) Based on the above order, the appellant claimed the refund of Rs. 5,00,000/- which is the subject in dispute in this appeal.

Shri M. Karthikeyan, Learned Advocate, appeared for the assessee-appellant and Shri L. Nandakumar, Learned Authorized Representative, appeared for the Revenue-respondent.

In support of his case, Learned Advocate for the appellant would also rely on the following decisions:

(i) M/s. Mafatlal Industries Ltd. v. Union of India [1997 (89) E.L.T. 247 (S.C.)];

(ii) Commr. of Central Excise v. M/s. Advance Steel Tubes Ltd. [2018 (11) G.S.T.L. 341 (All.)];

(iii) The Commr. of Central Excise, Coimbatore v. M/s. Pricol Ltd. [2015 (320) E.L.T. 703 (Mad.)];

(iv) M/s. EBIZ.COM Pvt. Ltd. v. Commr. of Central Excise, Customs & S.T. [2017 (49) S.T.R. 389 (All.)];

(v) M/s. Lakshmi Gayatri Iron & Steel P. Ltd. v. C.C.E. & S.T., Hyderabad-III [2017 (358) E.L.T. 462 (Tri. - Hyd.)];

(vi) M/s. Universal Heat Exchangers Ltd. v. Commr. of C.Ex., Coimbatore [2015 (329) E.L.T. 936 (Tri. - Chennai)];

Learned Authorized Representative for the Revenue while supporting the findings of the lower authorities, would also rely on the decision of the Hon'ble Supreme Court in the case of M/s. Sahakari Khand Udyog Mandal Ltd. v. Commissioner of C.Ex. & Cus. reported in 2005 (181) E.L.T. 328 (S.C.). He would also refer to the accounting procedure which is not followed by the appellant, but that the appellant had only furnished a Chartered Accountant certificate which is not a conclusive proof.

He also points out to the observations in the impugned order that despite copy of the Balance Sheet and P&L Account having been called for, for the period from 2005-06 to 2016-17, only one for the period 2005- 06 and later, for the period 2016-17 was submitted, by which the authorities below were unable to verify from the appellant's records whether the amount in question was carried over as pre-deposit or receivable in the subsequent year's financial statements.

Heard both sides, perused the documents placed on record and have also gone through the various decisions/orders referred to during the course of hearing.

From the judgements relied upon by the Learned Advocate for the assessee, there remains no doubt that any payment made during investigation would partake the character of pre-deposit, for which unjust enrichment would not apply. But a perusal of the impugned order i.e., the Order of the Commissioner (Appeals) dated 14.10.2019 makes it clear that the rejection of refund is upheld for want of verification from the appellant's books as to the treatment given in subsequent years, as pointed out by the Learned Representative for the Revenue. The Commissioner (Appeals) has observed in paragraph 9.4, as under:

"9.4. ....

. . .

Whereas in this case, despite the copy of the Balance Sheets and P&L accounts have been called for, for the period from 2005-06 to 2016-17, only the Balance Sheet and P&L for the year 2005-06 & 2016-17 were later submitted by them..."

On the one hand, the appellant claims that the amount paid is to be treated as pre-deposit for which unjust enrichment would not apply, but, on the other hand, fails to furnish the necessary documents requested by the authorities who are empowered to look into all aspects before passing an order. This is because the lower authorities have to be primarily satisfied, who thereupon would record a positive finding after considering such necessary documents. This factual verification has to be done and only thereafter can we apply judicial precedents.

For the above reasons, I am of the considered view that the matter has to be set aside and remanded back to the file of the Original Authority, before whom the appellant shall furnish all necessary documents that may be required by the said authority, who thereafter shall pass a speaking order after considering all such documents and the binding judicial precedents that may be relied upon by either side. All contentions are left open.

The appeal stands allowed, by way of remand.

(Order pronounced in the open court on 22.03.2021)