M/S Balkrishna Industries Ltd vs Union Of India
2022 Latest Caselaw 1319 Raj/2

      HIGH COURT OF JUDICATURE FOR RAJASTHAN
                  BENCH AT JAIPUR

          1.D.B. Civil Writ Petition No. 2835/2021

M/s Balkrishna Industries Ltd., A-300-305 And E-306-313, Riico
Industrial Area, Chopanki, Dist - Alwar, Rajasthan - 301707
Through R.k. Jha, Agm
                                                                  ----Petitioner
                                   Versus
1.    Union Of India, Through Principal Commissioner And
      Additional   Secretary         To    The      Government      Of   India,
      Department Of Revenue, Ministry Of Finance, North Block,
      New Delhi - 110001
2.    Assistant Commissioner, Central Excise Division, Bhiwadi -
      Ii, Near Ashiana Bagicha, Alwar Bye-Pass Bhiwadi, Alwar -
      Rajasthan.
                                                               ----Respondents

Connected With

2.D.B. Civil Writ Petition No. 11511/2020 M/s. Balkrishna Industries Ltd., A-300-305 And E-306-313, Riico Industrial Area, Chopanki, Dist. - Alwar, Rajasthan- 301707

----Petitioner Versus

1. Union Of India, Through Principal Commissioner And Additional Secretary To The Government Of India, Department Of Revenue, Ministry Of Finance, North Block, New Delhi- 110001

2. Assistant Commissioner, Central Excise Division, Bhiwadi-

Ii Near Ashiana Bagicha, Alwar Bye-Pass Bhiwadi Alwar -

Rajasthan

----Respondents

3.D.B. Civil Writ Petition No. 2861/2021

M/s. Balkrishna Industries Ltd., A-300-305 And E-306-313, Riico Industrial Area, Chopanki, Dist. - Alwar, Rajasthan - 301707 Through R.k. Jha, Agm.

----Petitioner Versus

1. Union Of India, Through Principal Commissioner And

(2 of 10) [CW-2835/2021]

Additional Secretary To The Government Of India, Department Of Revenue, Ministry Of Finance, North Block, New Delhi - 110001

2. Assistant Commissioner, Central Excise Division, Bhiwadi

- Ii, Near Ashiana Bagicha, Alwar Bye-Pass Bhiwadi, Alwar - Rajasthan

----Respondents

4.D.B. Civil Writ Petition No. 2862/2021

M/s. Balkrishna Industries Ltd., A-300-305 And E-306-313, Riico Industrial Area, Chopanki, Dist. - Alwar, Rajasthan - 301707 Through R.k. Jha, Agm.

----Petitioner Versus

1. Union Of India, Through Principal Commissioner And Additional Secretary To The Government Of India, Department Of Revenue, Ministry Of Finance, North Block, New Delhi - 110001

2. Assistant Commissioner, Central Excise Division, Bhiwadi - Ii, Near Ashiana Bagicha, Alwar Bye-Pass Bhiwadi, Alwar - Rajasthan

----Respondents

5.D.B. Civil Writ Petition No. 2863/2021

M/s Balkrishna Industries Ltd., A-300-305 And E-306-313, Riico Industrial Area, Chopanki, Dist - Alwar, Rajasthan - 301707 Through R.k. Jha, Agm

----Petitioner Versus

1. Union Of India, Through Principal Commissioner And Additional Secretary To The Government Of India, Department Of Revenue, Ministry Of Finance, North Block, New Delhi - 110001

2. Assistant Commissioner, Central Excise Division, Bhiwadi - Ii, Near Ashiana Bagicha, Alwar Bye-Pass Bhiwadi, Alwar - Rajasthan.

                                                               ----Respondents





                                     (3 of 10)                    [CW-2835/2021]

6.D.B. Civil Writ Petition No. 2864/2021

M/s Balkrishna Industries Ltd., A-300-305 And E-306-313, Riico Industrial Area, Chopanki, Dist - Alwar, Rajasthan - 301707 Through R.k. Jha, Agm

----Petitioner Versus

1. Union Of India, Through Principal Commissioner And Additional Secretary To The Government Of India, Department Of Revenue, Ministry Of Finance, North Block, New Delhi - 110001

2. Assistant Commissioner, Central Excise Division, Bhiwadi - Ii, Near Ashiana Bagicha, Alwar Bye-Pass Bhiwadi, Alwar - Rajasthan.

----Respondents

7.D.B. Civil Writ Petition No. 2865/2021

M/s Balkrishna Industries Ltd., A-300-305 And E-306- 313, Riico Industrial Area, Chopanki, Dist - Alwar, Rajasthan - 301707 Through R.k. Jha, Agm

----Petitioner Versus

1. Union Of India, Through Principal Commissioner And Additional Secretary To The Government Of India, Department Of Revenue, Ministry Of Finance, North Block, New Delhi - 110001

2. Assistant Commissioner, Central Excise Division, Bhiwadi - Ii, Near Ashiana Bagicha, Alwar Bye-Pass Bhiwadi, Alwar - Rajasthan.

----Respondents

8.D.B. Civil Writ Petition No. 2866/2021

M/s Balkrishna Industries Ltd., A-300-305 And E-306- 313, Riico Industrial Area, Chopanki, Dist - Alwar, Rajasthan - 301707 Through R.k. Jha, Agm

----Petitioner Versus

1. Union Of India, Through Principal Commissioner And Additional Secretary To The Government Of

(4 of 10) [CW-2835/2021]

India, Department Of Revenue, Ministry Of Finance, North Block, New Delhi - 110001

2. Assistant Commissioner, Central Excise Division, Bhiwadi - Ii, Near Ashiana Bagicha, Alwar Bye- Pass Bhiwadi, Alwar - Rajasthan.

----Respondents

9.D.B. Civil Writ Petition No. 2867/2021

M/s. Balkrishna Industries Ltd., A-300-305 And E- 306-313, Riico Industrial Area, Chopanki, Dist. -Alwar, Rajasthan - 301707 Through R.k. Jha, Agm.

----Petitioner Versus

1. Union Of India, Through Principal Commissioner And Additional Secretary To The Government Of India, Department Of Revenue, Ministry Of Finance, North Block, New Delhi - 110001

2. Assistant Commissioner, Central Excise Division, Bhiwadi - Ii, Near Ashiana Bagicha, Alwar Bye- Pass Bhiwadi, Alwar - Rajasthan

----Respondents

10.D.B. Civil Writ Petition No. 11540/2020

M/s. Balkrishna Industries Ltd., A-300-305 And E- 306-313, Riico Industrial Area, Chopanki, Dist. -

 Alwar, Rajasthan- 301707
                                                            ----Petitioner
                                Versus
 1.     Union       Of        India,         Through            Principal

Commissioner And Additional Secretary To The Government Of India, Department Of Revenue, Ministry Of Finance, North Block, New Delhi- 110001

2. Assistant Commissioner, Central Excise Division, Bhiwadi-Ii Near Ashiana Bagicha, Alwar Bye-Pass Bhiwadi Alwar - Rajasthan

(5 of 10) [CW-2835/2021]

----Respondents

For Petitioner(s) : Ms. Disha Bhandari through VC For Respondent(s) : Mr. Siddharth Ranka through VC

HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE SUDESH BANSAL

Judgment

07/02/2022

1. This group of petitions arise out of a common background.

They have been heard together and are being disposed of by this

common judgment.

2. D.B. Civil Writ Petition No.2835/2021 is treated as a lead

case. Facts on record from the said case may be seen. The

petitioner is a limited company and is engaged in the business of

manufacturing of automobile tyres and tubes falling under Chapter

40 of First Schedule to the Central Excise Tariff Act, 1985. For the

purpose of manufacturing tyres the petitioner would utilise

indigenous as well as imported raw materials. In order to avail the

benefits of duty free imports the petitioner had obtained advance

authorisations and imported goods without payment of duty in

terms of notification dated 11.09.2009. For certain locally

procured inputs the petitioner would apply and obtain invalidation

letters from the Directorate General of Foreign Trade by getting

the relevant advance authorisation cancelled for the quantity of

goods invalidated.

3. The petitioner made a rebate claim under rule 18 of Central

Excise Rules, 2002 (for short 'the rules of 2002') for a sum of

Rs.97.74 lacs (rounded off) before the Assistant Commissioner of

(6 of 10) [CW-2835/2021]

Central Excise. The Assistant Commissioner issued a show-cause

notice on 09.02.2015 why such rebate claim should not be

rejected. In the show-cause notice it was mentioned that upon

examination of claim it appears that petitioner had exported goods

and though no valid duty was payable on such exported goods the

petitioner paid the duty from inadmissible CENVAT credit availed

on the basis of inputs supplied against invalidation letters on

payment of duty which was lying in the CENVAT account of

assessee. The assessee had thus paid duty deliberately to claim

the rebate of the same.

4. The petitioner opposed the show-cause notice. The Assistant

Commissioner allowed the rebate accepting the stand of the

assessee upon which the department preferred an appeal.

Commissioner of Appeals by his order dated 31.10.2017 allowed

the appeal. He was of the opinion that in terms of the notification

No.96/2009 of the Customs Department dated 11.09.2009 read

with notification No.44/2001 dated 26.06.2001 read with Foreign

Trade policy the advance licence holder is required to export goods

without payment of duty. In the present case the petitioner paid

the duty though the same was not payable. It was done

deliberately to encash the CENVAT credit which may have been

built up in the account. The advance licence scheme does not

allow such mischief.

5. The petitioner preferred revision petition against the said

appellate order. The revisional authority by the impugned order

dated 08.01.2020 dismissed the revision petition making following

observations:-

"10. The applicant has paid an amount as central excise duty on the export goods from their

(7 of 10) [CW-2835/2021]

cenvat account. The said amount does not assume the character of duty as defined under Rule 2 (e) of Central Excise Rules 2002 wherein 'duty' means "the duty payable under Section 4 of the Central Excise Act".

11. CBIC vide circular no.203/ 37/96-cx dated 26.04.96 has stated that AR-4 (now ARE-1) value of excisable goods should be determined under Section 4 of Central Excise Act, 1944. Any amount paid in excess of duty liability on one's own volition cannot be treated as duty. It has to be treated simply a voluntary deposit with the Government which is required to be returned to the applicant in the manner, in which it was paid, as the said amount cannot be retained by Government without any authority of law.

Hon'ble Punjab and Haryana High Court in the case of Nahar Industries Enterprises Limited Vs. Union of India (2009 (253) ELT 22 (P&H) has held that "Assessee is not entitled to refund thereof in cash regardless of mode of payment of said higher excise duty."

12. Government holds that the applicant is not entitled for rebate under Rule 18 of Central Excise Rules, 2002 on the impugned goods exported under Advance License Scheme in terms of notification 42/2001-Central Excise (N.T.), 44/2001-CE (NT) both dated 26.06.2001 read with notification 96/2009-Cus dated 11.09.2009. Accordingly the order of Commissioner (Appeals) is upheld and revision applications filed by the applicant are rejected."

6. Appearing for the petitioner learned counsel Ms. Disha

Bhandari contended that the excise rules envisage either rebate or

duty free procurement of the raw materials which are used for

manufacturing export product. In the present case the petitioner

opted for procedure under rule 18 of the rules of 2002 and made a

rebate claim after payment of duty. Even if it is assumed that no

duty was payable, the department cannot retain the petitioner's

duty which has already been paid. She drew our attention to the

decisions of various courts holding that payment of duty through

CENVAT credit is as good as duty paid. The CENVAT rules make no

(8 of 10) [CW-2835/2021]

distinction between a case where duty is paid through cash or

through CENVAT credit adjustments. She therefore submitted that

appellate and revisional authorities have committed serious error

in rejecting the rebate claim.

7. Learned counsel appearing for department opposed the

petitions contending that it is indisputable that petitioner was not

required to pay duty on the exports made despite which the duty

was paid. This was done through encashment of CENVAT credit

lying in the account of the petitioner. The rebate claim was later

on made to encash such CENVAT credit which was otherwise not

encashable. The authority has therefore correctly examined the

situation and dismissed the petitions.

8. Having heard learned counsel for the parties and having

perused the documents on record, it appears quite undisputable

that the petitioner had availed the facility of importing goods

under advance licences without payment of duty. In some cases

such advance licence were invalidated in order to procure raw

material duty free from local manufacturers. Raw materials so

procured were utilised for manufacturing the export goods. At that

time the petitioner availed the CENVAT credit and later on claimed

the rebate under rule 18.

9. As is well known, the rules of 2002 recognise two regimes

for equalising excise duty element on raw material used for export

of course subject to the conditions specified by the Government of

India. Under rule 18 the Central Government may by notification

grant rebate on duty paid on excisable goods which are used for

production of export goods. Under rule 19 a manufacturer can

procure such goods without payment of duty on a condition that

same would be used for manufacture of goods which would be

(9 of 10) [CW-2835/2021]

exported. Both these rules 18 and 19 of the rules of 2002 concern

payment of duty. Under Rule 18 there would be rebate of duty

paid. Under rule 19 the duty which is otherwise payable is waived

subject to condition of using raw material for manufacturing

export goods. Neither of these rules relate to an amount which is

deposited with the Government but which is not in the nature of

duty. In other words if there is no duty element involved and

amount is still paid, it does not partake the character of duty. It

may amount to depositing a certain sum with the Government

under erroneous belief. Had the petitioner deposited such sum

believing it to be the duty payable, we would have still considered

directing the Government of India to refund the same. The

Government of India has no authority to retain the sum which is

collected without authority of law. If a person deposits such sum

under mistake he may also claim refund thereof and if

Government of India intends to withhold the same, the same may

be branded as withholding the amount without authority of law.

However in the present case the situation is different. The amount

was not deposited in cash but by encashing CENVAT credit. We are

conscious that the judgments have made observations to the

effect that payment of duty through CENVAT facility is as good as

duty paid. However as observed earlier, it is not an instance of

duty being paid. It is an instance of depositing certain sum with

Government of India which was not payable. We therefore are in

agreement with the view of appellate and revisional authorities

that by this means the petitioner cannot claim refund of the

amount which was offered through CENVAT credit. As is well

known unused CENVAT credit can be encashed subject to certain

terms and conditions. The petitioner cannot encash the CENVAT

(10 of 10) [CW-2835/2021]

credit without following the procedure for making application and

inviting a scrutiny whether the terms and conditions under which

such unused CENVAT credit can be encashed are satisfied.

10. In the result petitions are dismissed.

(SUDESH BANSAL),J (AKIL KURESHI),CJ

KAMLESH KUMAR/21-28, C-1 & 2

Powered by TCPDF (www.tcpdf.org)