COMMISSIONER OF CENTRAL EXCISE, CHENNAIversusM/S. T.V.S. SUZUKI LTD. HOSUR

         COMMISSIONER OF CENTRAL EXCISE, CHENNAI                               A
                                    v.
                   M/S. T.V.S. SUZUKI LTD. HOSUR

                            AUGUST 6, 2003

  [S. RAJENDRA BABU, B.N. SRIKRISHNA AND GP. MATHUR, JJ.]                      B

      Central Excise Act, 1944; Rule 9B(5) and its Proviso & Section JJB:
Refund claim-Proviso to Rule 9B(5) vis-a-vis Section 11 B-Applicability
of-Held: Refund claim after adjustment under Rule 9B(5) would not be           C
governed by the restrictions under Section 11 B--Since Proviso to Rule 9B(5)
was introduced when refund claim of the assessee was pending with the
Revenue, right of the assessee does not get defeated by the subsequent
amendment in the provision oflaw--Tribunal rightly held that claim/or refund
had to be decided in accordance with the existing law.

     Assessee, a Public Sector Undertaking, filed an application for refund    D
claim after completion of final assessment. Assistant Commissioner,
Central Excise, rejected the claim on the ground of limitation. But the
order was reversed by the appellate authority and it was affirmed by the
CEGAT. Hence the present appeals.

      It was contended for the Revenue that since the refund claim of the      E
assessee was pending with the Revenue, when Proviso to sub rule (5) of
Rule 98 was introduced by way of an amendment, it had to be adjudicated
in accordance with the amended provision of law.

     Dismissing the appeals, the Court
                                                                               F
      HELD: Merely because the departmental authorities took a long time
to process the application for refund, the right of the assessee does not
get defeated by the subsequent amendment made in sub-rule (5) of Rule
98 of the Central Excise Act. The Commissioner of Central Excise and
the CEGAT were, therefore, justified in holding that the claim for refund      G
made by the assessee had to be decided in accordance with law laid down
by this Court in Mafatlal Industries Ltd. and would not be governed by
the proviso to sub-rule (5) of Rule 98. (284-C, DJ

     Ma/at/al Industries Ltd and Ors. v. Union of India and Ors., (1997) 5
sec 536, followed.                 281                                         H
    282                     SUPREME COURT REPORTS (2003] SUPP. 2 S.C.R.

A        Sinkhai Synthetics & Chemicals Pvt. Ltd v. C.C.E. Aurangabad, [2002)
    143 ELT 17 (SC) and Commissioner of Central Excise, Meerut v. Mis. Star
    Paper Mills Ltd,[2003) 7 SCC 27, relied on.

          CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2416 of 2000.

B        From the Judgment and Order dated 21. 7 .1999 of the Central Excise,
    Customs and Gold (Control) Appellate Tribunal, Madras in A. No. E/
    3292/98 in F.O. No. 1786 of 1999.

                                       WITH

          C.A. Nos. 2891, 8380/2001 and 610-611 of 2002.
c
         M.L. Verma, Ms. Nisha Bagchi, P. Manish and B.K. Prasad for the
    Appellant.

         Rajendra Singhvi, Ashok K. Singh, V. Lakshmi Kumaran, Aolk Yadav,
    V. Balachandran and Staish K. Agnihotri for the Respondent.
D
          The Judgment of the· Court was delivered by

          SRIKRISHNA, J.

          Civil Appeal No. 2416 of 2000

E         On 5. 7 .1996 the respondent filed an application for refund claim of Rs.
    1,48,58,630.94 after the final assessment was completed. The Assistant
    Commissioner of Central Excise issued a show cause notice dated 9.7 1996
    as to why the claim should not be rejected for non-compliance with Section
    11 B of the Central Exdse Act, 1944. After considering the reply filed by the
F   respondent the Assistant Commissioner of Central Excise by his order 17th
    July, 1996 rejected the refund claim of the respondent on the ground that the
    refund claim had been made beyond the period of limitation and that
    respondent was unable to show that the amount of excise duty for which the
    refund was claimed, had not been passed on to any other person. On appeal,
    the Commissioner of Central Excise, in his order dated 19th June, 1998
G   observed that on the date on which the Assistant Commissioner of Central
    Excise made the above order (i.e 17.7.1996), the assessment was only
    provisional and that the assessment was finalised only on 25.7.1996. In the
    circumstances, the Commissioner was of the view that the refund claim was
    not time barred. Following the law laid down by this Court in Ma/at/a/
H   Industries Ltd. & Ors. Y. Union of India & Ors., [1997] 5 SCC 536, he held
                 C.C.E. v.T.V.S. SUZUKI LTD. [SRIKRISHNA, J.]            283

that the concept of unjust enrichment would not be attracted on finalisation     A
of provisional assessments. He consequently allowed the refund claim. On
appeal the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter
referred to as 'CEGAT') agreed with the view of the Commissioner and
dismissed the appeal. Hence, the department is in appeal before us.

      In Mafatlal Industries Ltd (supra) a Bench of nine learned Judges of       B
this Court held that refund claims consequent upon the adjustment under sub-
rule (5) of Rule 9B would not be governed by the restrictions of Section I IA
or Section 1 IB, as the case may be. This Court observed (vide paragraph
104) as under:

       "Rule 9-B provides for provisional assessment in situations specified C
       in clauses (a), (b) and (c) of sub-rule (1). The goods provisionally
       assessed under sub-rule (1) may be cleared for home consumption or
       export in the same manner as the goods which are finally assessed.
       Sub-rule (5) provides that " when the duty leviable on the goods is
       assessed finally in accordance with the provisions of these Rules, the D
       duty provisionally assessed shall be adjusted against the duty finally
       assessed, and if the duty provisionally assessed falls short of or is in.
       excess of the duty finally assessed, the assessee shall pay the deficiency
       or be entitled to a refund, as the case may be". Any recoveries or
       refunds consequent upon the adjustment under sub-rule (5) of Rule 9-
       B will not be governed by Section 11-A or Section 11-B, as the case E
       may be."

      In order to get over the situation arising under Mafatlal Industries Ltd
(Supra) vide notification No. 45/99-CE (NT) dated 25.6.1999, an amendment
was made in sub-rule (5) of Rule 9B by adding a proviso thereto. The effect
of the proviso is that, even after finalisation of the provisional assessment    F
under Rule 9B (5), if it is found that an assessee is entitled to refund, such
refund shall not be made to him except in accordance with the procedure
established under sub-section (2) of Section 11 B of the Act.

      There is no dispute that the refund claim in th is case was made much
prior to the addition of the proviso in svb-rule (5) of Rule 9B. On the date     G
on which the refund claim was made, the law applicable was the law as
declared by this Court in Mafatlal Industries Ltd (supra) which we have
reproduced above. However, it is contended by the learned counsel Shri
Verma for the department, that the claim of refund would be governed by the
proviso introduced in sub-rule (5) of Rule 98, and that as a consequence, the    H
    284                      SUPREME COURT REPORTS [2003] SUPP. 2 S.C.R.

A restrictions in Section 1 l A and Section 11 B with regard to th~ procedure for
    refund would apply to the case of the respondent. The same question came
    up for consideration of this Court in Sinkhai Synthetics & Chemicals Pvt. Ltd.
    v. C.C.E., Aurangabad, (2002) 143 E.L.T. 17 SC. This Court took the view
    that the case would be governed by the rule laid down in Mafatlal Industries
B   Ltd (supra). This view has been reiterated in a subsequent judgment of this
    Court in C.A. No. 2533 of 200 I. (Commissioner of Centi-al Excise, Meerut
    v. Mis. Star Paper Mills Limited, (2003] 7 SCC 27) upholding the view of
    the tribunal that the refund claim of the asseessee before the court was justified.

          Shri Venna fairly concedes that the proviso introduced in sub-rule (5)
C of Rule 9B cannot be said to be retrospective in operation. He, however,
    contends that on the date on which the proviso was brought into force, i.e.
    25.6.1999, the refund claim was still pending with the departmental authorities .
    and, therefore, it had to be adjudicated in accordance with the law as it
    became enforceable from 25.6.1999. In our view, this contention cannot be
    accepted. Merely because the departmental authorities took a long time to
D   process the application for refund, the right of the asseessee does not get
    defeated by the subsequent amendment made in sub-rule (5) of Rule 98. The
    Commissioner of Central Excise and the CEGA T were, therefore, justified in
    holding that the claim for refund made by the respondent had to be decided
    according to the law laid down by this Court in Mafatlal Industries Ltd.
E   (supra) and would not be governed by the proviso to sub-rule (5) of Rule 98.

          In the result, we find no merit in appeal. The appeal is accordingly
    dismissed. However, there shall be no order as to costs

          Civil Appeal Nos. 289112001, 8380/2001 and 610-611/2002

F          In all these appeals the question which arises for our consideration is
    identical. The refund claims were made pursuant to the finalisation of
    provisional assessment orders and prior to 25.6.1999, i.e. the date on which
    the proviso to sub-rule (5) of Rule. 98 came into force. In our view, therefore,
      I
    all these cases would be governed by the rule in Mafatlal Industries Limited
G   (supra) namely that the restrictions in Section I I A and Section I I B would
    not apply to refurid claims consequent upon finalisation of provisional
    assessment orders.

          Hence, these appeals are dismissed.
          No. costs
H S.K.S.                                                          Appeals dismissed