Barmer Lignite Mining Company Ltd. Vs Commissioner (CESTAT Delhi)
Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, has ordered a full refund of Rs. 107,56,07,953 deposited “under protest” by Barmer Lignite Mining Company Ltd. during a tax dispute. The Tribunal’s decision set aside an order from the Commissioner (Appeals) that had denied the refund citing the principle of unjust enrichment under Section 11B of the Central Excise Act, 1994.
Barmer Lignite Mining Company, a joint venture with the Government of Rajasthan, is involved in lignite mining operations in the Barmer District. The company’s entire lignite output was supplied exclusively to Raj West Power Ltd. (now JSW Energy (Barmer) Limited – JSWEBL) for electricity generation, governed by a Fuel Supply Agreement. A significant factor in the case’s context is that the price at which Barmer Lignite Mining Company supplied lignite to JSWEBL was not determined unilaterally but was fixed by the Rajasthan Electricity Regulatory Commission (RERC), a state authority established under the Electricity Act, 2003.
The dispute with the tax authorities originated from demands for excise duty raised against Barmer Lignite Mining Company. While contesting the taxability, the company deposited an amount exceeding Rs. 107 crore “under protest” during the investigation and adjudication proceedings. This payment under protest signified that the company was making the payment under compulsion of law or departmental demands while reserving its right to challenge the levy and claim a refund if the dispute was resolved in its favour.
