JAVID IQBAL, JUDICIAL MEMBER.---This appeal has been preferred by Messrs MAKK Beverages and Mineral Water (Pvt.) Ltd., Charsadda Road, Peshawar against Order-in-Appeal No. 360 of 2009, dated 23-7-2009, passed by Collector (Appeal), on the main ground that impugned orders may be set aside and declared to be void and of no legal effect with the direction to department to refund the amount of Rs.33134073 recovered illegally on account of CED on beverages cleared during the period from July, 1994 to October, 2003.
2. Brief facts of the case as reported in the impugned order leading to this appeal are that Messrs Makk Beverages and Mineral Water (Pvt.) Ltd. Charsadda Road. Peshawar having sales tax Registration No.05-01-2811-001-73 claimed refund of Central Excise Duty for Rs.3,31,34073 vide letter No. Nil dated 1-10-2007. This amount stated to have been recovered in excess to what was due to be paid as C.E.D during the period July, 1994 to October, 2003 placing the reliance on the judgment of Supreme Court of Pakistan in Civil Appeals Nos.1368 to 4389 of 2002 dated 15-2-2007. Vide Order-in-Original the claim of appellant was declined by respondent No. 2. Against the finding of respondent No. 2 claimant filed an appeal before the respondent No. 1 who confirmed the finding given vide order-in-original, hence this second appeal before this forum.
3. We have heard the arguments of the parties and perused the relevant orders of the officer below and the cases law referred by both the side, and the other material made available before us.
4. The L/AR of the appellant argued that at that time the beverages were assessable to Central Excise duty @ of 12.5% of the retail price, which was changed from time to time and to be paid under section 4(2) of the Central Excise Act, 1944, which lays down that the duty shall be charged on the retail price fixed by the manufacturers, inclusive of all charges and taxes other than the sales tax, In the case of appellant duty was assessed by the Central Excise staff posted to the unit for supervision on the basis of retail price. Subsequently the duty was recovered for the second time. The said action was challenged in the High Court by the various manufacturers which was decided against the department. The Supreme Court of Pakistan also finally decided the matter in favour of manufacturers. It was pleaded by the L/AR that excise duty recovered for the second time was not passed on to the consumer as alleged in the orders because declared price as embossed on the container was not challenged. The same price inclusive of C.E.D B also advertised in the newspaper "Daily Aaj". Moreover section 3(D) Central Excise Act, 1944 on the subject of passing incidence can be invoked under the mis-apprehension of the provision of the Act. In the present case there is no such situation L. This way reliance was placed on the case-law reported 2002 YLi 3498. In the case duty was recovered by Central Excise staff posted at the unit for supervision on the basis of retail price which already included the amount of Central Excise duty in term of CEGO No. 14/69. Similarly it is pertinent that retail price for each bottle was legibly and prominently indicated which price the consumer was supposed to pay. The incidence of excess payment was not thus passed on to the consumer. The bar by limitation under rule 11 of Central Excise Rules, 1944 is not applicable in the current case, firstly because the excess duty was collected by the department illegally and the payment was made not through inadvertence, error or misconstruction but because of the fact that respondent was made to make the payment. In this connection the L/AR relied upon the principle of law deducible on period of limitation for refund of duty and taxes as laid down by the Hon'ble Supreme Court of Pakistan in case Pfizer Laboratory v.
Federation of Pakistan on page CL-360-61. The judgment of Hon'ble Lahore High Court cited as 1994 CLC 994 is also very clear on the subject, it is not a past and closed transaction. The judgment of apex court is in continuation of the demand of duty created by different forums of the department through passing orders-in-original and ordersin-appeal. As regards its applicability the judgment is applicable in the instant case as facts and the circumstances of the dispute are the same.
According to Tribunal's Karachi Bench judgment cited as PTCL 2005 CL 193, benefit of the orders/decision can be extended to the similarly . Placed persons. There is no question of retrospective effect. The judgment is in the field and is to be complied with in respect of the dispute mentioned in the judgment.
5. As per comment and submission of L/DR the departmental stance with reference to invoking the provisions of section 3D of the CEA 1944 or section 11 of the FEA 2005, is well founded and is justified to state that the Duty (CED) as collected by the department has ultimately been passed onto the consumers. The Central Excises Act, 1944/Federal Excise Act, 2005 being a special law provide that the onus to prove that the incidence of CED has not been passed on to consumers lies on the appellant as required under subsection (3) of section 3D of the Central Excises Act, 1944. The appellant was under obligation to have brought on record the very label put on the bottles regarding price declared as embossed on it. Further, the appell ant's contention that the said provisions can only be invoked where duty h as been collected under misapprehension of the provisions of the Act is to ally misconceived.
6. The perusal of provisions of law as contained in section 3-D of Central Excises Act, 1944 and section 11 of Federal Excise Act, 2005 if seen in juxtaposition with the appeal filed by the appellant, it is manifestly established that the appellant has conveniently ignored the wordings or otherwise in section 3D of the Act. These wordings are of extreme significance to rebut the argument of the appellant that the provisions of section 3D are attracted only when duty has been overpaid due to any misapprehension of law. These wordings cover all other possibilities of payment of excess excise duty including payment by wrong interpretation of law, illegal recovery etc. It covers all other situations, reasons other than misapprehension of law i.e. It even covers the situation of collection of duty under the correct apprehension of law which was subsequently declared by the Courts to be an incorrect interpretation. This is the sole reason that "or otherwise" has been used in contradiction to the word misapprehension and covers all foreseeable situations other than misapprehension. It will be of interest to note that building upon this concept to forestall unjust enrichment the legislature has used the words "for___ any reason whatsoever" in the Federal Excise Act, 2005 to make sure that the principle of unjust enrichment is not violated by any queer interpretation of law. Reference in this regard is made to the judgment of the Apex court wherein it has been held that, "the principle of passing on burden of indirect tax has nexus with the doctrine of unjust enrichment, according to which windfalls are prohibited to a person in respect of amount which is not owned by him or it had sustained any loss in respect thereof." (Messrs Fector Belarus Tractor v. Federation of Pakistan 2005 PTD 2286).
7. The claim of appellant is purely based on the idea of an afterthought because the duty was regularly paid by the appellant in accordance with the Central Excise General Order No.14 of 1969 during period from 1-7-1994 to 2003 whereas admittedly they have filed their claim for refund of CED after the judgment of Hon'ble Supreme Court of Pakistan in Civil Appeals Nos. 1368 and 1389 of 2002. They were required either to have protested against the deposit of CED at that time by approaching proper forum or court of law or should have deposited the same under protest which transpires that they were not aggrieved by the depositing of CED and even did not file any representation to th collecting agency or any case. Before a court of law. Further, the appellant has failed to declare the amount of its claim as a refund in their annual accounts which is a statutory document under the Companies Ordinance, 1984.
8. It was admitted to be correct that various manufacturers of beverages and mineral water including cement manufacturers as a result of the aforesaid judgment of apex court have filed refund claims for the CED for the period under reference however, it merits to mention that the appellant was not a party to the said judgment of apex court. Pursuant to the above, the litigant units Messrs Cherat Cement Company, Messrs Lucky Cement Company filed their claim for refund of the CED however, this RTO has issued show cause notice to the above units which have been challenged in the Peshawar High Court which are still sub-judice.
9. That the by the Appellate Tribunal as referred to by the appellant have no nexus with the appeal under reference because in these cases the CED was less charged and contravention cases were framed for short paid of CED which was not paid by the then appellant (Messrs Popular Juice) whereas in the instant cases CED was properly charged and deposited by the appellant. Therefore, the appellant's case is hit by the principle of estoppels.
10. In the present case, it is purely a question of application of funds and is covered by International Accounting Standards 1 (IAS). Had the petitioner made the payments out of on funds/income, it would have been an act against the overall scheme of indirect taxes. This payment would then have taken the shape of direct tax thus its burden would be on the appellant rather than on the consumers. Resultantly, the payment would have been reflected in the cash flow statement and being against the normal scheme of indirect taxes from day one, it would have been a payment out of on funds. Nowhere, the accounts reflect this state of affairs. The entire excise duty has been included in the gross figures of sales and while calculating net sales, the same has been subtracted thus expressly indicating that the excise duty formed part of sales and was recovered from the consumers. Beside this, it has not been declared in the cash flow statement. Had it been paid out of petitioner's on funds, it would have taken the color for direct tax and hence like income tax, it should have been reflected in the cash flow statement. The difference of .Direct and indirect taxes has been lucidly explained .By the Hon'ble Supreme Court in the case of Messrs Illahi Cotton Mills and others v. Federation of Pakistan as under:- "That a direct tax is one which is demanded from the very person, who it is intended or desired should pay it, whereas indirect taxes are those, which are demanded from one person in the expectation and intention that he shall indemnify himself at the expenses of another, like custom duties, excise taxes and sales taxes, which are borne by the consumers."
11. Since payment by the appellant would have been against the I normal scheme of indirect taxes (wherein burden is passed on to the consumers by making the levy a part of the total sale consideration received from customers, accordingly, as per standard accounting practices and the fact that the recovery was illegal should have been I reflected as such from day one. However, from day one the appellant has neither attempted to declare the same as receivable nor shown in the cash flow statement which is admission of the fact that it was passed on to the consumers.
12. We are persuaded to agree with the argument of L/DR that the Hon'ble Supreme Court of Pakistan upheld the judgment of Peshawar High Court to the extent that CED cannot be included in the retail price for working out CED. However, the Apex court disagreed with the findings of the Peshawar High Court with respect of holding it to be double taxation. However the appellant's contention that benefit of another judgment involving similar issue could be extended to them is not acceptable because of the fact that the appellant has in no way filed any representation to any forum (then Collectorate or CBR) or any court of law against such collection of duty by the department and to call for such remedy in his favour. It is quite against the doctrine of laches, in other words equity aids the vigilant and not the indolent. Had the appellant filed any appeal against the collection of duty being illegal or otherwise like others whose cases remained pending before any authority , the benefit under the said judgment could have been extended but no such application/representation whatsoever has been found pending or for that matter in pipeline for the same. The appellant's claim is manifestly time barred under rule 11 of the Central Excise Rules, 1944 or section 44(1) of Federal Excise Act, 2005. The contentions of the aforesaid provisions of law are quite clear on the issue. The aforesaid provision of law finds support of the judgment of the Hon'ble Supreme Court of Pakistan cited as 2009 PTD 1544 titled as Shahtaj Sugar Mills Ltd. v.
Additional Secretary Government of Pakistan as the relevant portion of which is as under:- 7n the instant case the duty was levied or imposed on the manufactured sugar by the sugar mills i.e.f. 7-4-1975 and was recoverable at the time of clearance thereof. The petitioner, admittedly, deposited the duty claimed by the Government, on the sugar cleared from the premises, and at the time of clearance or deposit of the said duty it did not object to the same, which would mean that it was deposited voluntarily without any protest. Had the petitioner any objection to the deposit of the duty either it would have not deposited the same or ought to have deposited the same under protest. The application for refund of the duty was made for the first time before the competent authority after a decision rendered by the High Court in case of Colony Thal Textile Mills, (PLD 1980 Lahore 377) and the judgment of this court, dated 2-11-1980 in the same case, while the duty was paid by the petitioner much earlier from the date of decision by this court in the Colony Thal Textile Mills case, PLD 1980 Lah. 377. First application before the Collector has been filed by the petitioner-Company on 17-5-1981 after one year of the judgment passed by this court in the case referred to above. The petitioner had availed of the alternate remedies available under the law and in this regard final order rejecting the prayer of the petitioner was passed by the Addl. Secretary on 28-8-1988. This court had passed a judgment in case of Pfizer Laboratories Ltd. v. Federation of Pakistan (PLD 1988 SC 64) involving the same question. Learned Counsel forcefully stressed that in view of the judgment of this court in Messrs Pfizer Laboratories Ltd. Supra, the petitioner was also entitled for refund of the regulatory duty deposited by it. It is pertinent to note that in that case the petitioner from the very first day objected the payment of the duty and resorted to remedies available under the law upto this court but the facts in the case in hand are distinguishable. The petitioner in the instant case for the first time approached the competent authority after the judgment passed by this court in Colony That Textile Mills, supra and as observed in the preceding paragraph a specific period has been provided for the purpose of claim of refund of the excess duty, charges etc. In the relevant laws and a specific period of one year, has been provided for claiming the same under Rule 11 of the Central Excise Rules. 1944. The. Petitioner after the expiry of the said period had initiated the proceedings for the first time in 1981. It is a settled proposition of law that the judgment of this court would be operated from the date of its pronouncement and would not be effective retrospectively, as such, the case of the petitioner is a past and closed transaction............. It was farther clarified that the judgment and the law would be retrospectively effective only if those cases had not been finally disposed of by the authority and were pending before it of court at the time of announcement of the judgment................. By depositing the Regulatory duty and not claiming the refund within one year, the petitioner was estopped to agitate the claim after six years, and the principle of laches and waiver would also come into play against the petitioner............... The petitioner did not challenge the levy of the regulatory duty and kept mim/remained in state of dormancy during five/six years and were up, when the other affectees in case Pfizer Laboratories, PLD 1998 SC 64 had gained the relief from the court................
13. In view of above discussed facts and the judgment of Hon'ble Supreme Court of Pakistan, wherein it has been held that when specific period has been provided for purpose of claim of the excess duty, charges etc., in the relevant laws and specific period of one year has been provided for claiming the same under Rule 11 of Central Excise Rules, 1944. The petitioner after the expiry of the said period must not be entitled to claim of refund. It has been further clarified that the judgment and law would be retrospectively effective, only if these had not been finally disposed of by the authority and were pending before it. By not doing so subsequently relying on the judgments of the Supreme Court the claimant is estopped from the claim of refund. In the matter in hand the appellant has paid the levy from the years 1994 to 2003 could have asked for his claim within the period of one year but has asked for refund in the year 2007. Thus it has become past and closed transaction, and the claimant/appellant is not entitled to any refund. appeal rejected.