2013 (3) TMI 298 - AT - Central Excise

Tribunal Upholds Decision on Provisional Assessment & Unjust Enrichment, Emphasizes Key Evidence

The Tribunal upheld the Commissioner (Appeals) decision in an appeal concerning provisional assessment and unjust enrichment. The Tribunal emphasized that ... Refund - Provisional assessment - Unjust enrichment - Consumer welfare Fund - Transactions between the manufacturer and the first stage dealer - Held that: - subsequent act of issuing credit notes cannot amount to not passing on the burden of duty to their customers, party has clearly mentioned the excise duty in the invoices raised under Section 12 of the Central Excise Act and passed on the burden to their customers. The indication of duty amounts in the said invoices prepared in terms of Section 12 of the Central Excise Act is clearly evidence for passing on the credit as held in the case of Dev Bhoomi Spinning & Weaving Mills (supra). So we can say that this reasoning that once credit note is issued, the manufacturer should be deemed to have absorbed the duty burden is to be rejected. The appeal is, therefore rejected. Issues:Appeal against order of Commissioner (Appeals) regarding provisional assessment and unjust enrichment.Analysis:The original authority finalized provisional assessment under Rule 7(3) of the Central Excise Rules, 2002 for a specific period, allowing a refund but ordering the amount to be credited to the Consumer Welfare Fund due to unjust enrichment concerns. The Commissioner (Appeals) upheld this decision. The appellant argued that discounts given to dealers were adjusted through credit notes, thus not passing on the duty burden. They cited legal precedents supporting their position. On the other hand, the Respondent contended that duty was clearly mentioned in invoices and subsequently issuing credit notes did not negate passing on the duty burden. They also referred to legal cases to support their stance.The Tribunal considered the submissions and records. It acknowledged that the appellants paid excess duty on a provisional basis and raised invoices indicating the excess amount, later issuing credit notes to dealers. The Tribunal differentiated the present case from the legal precedent cited by the appellant, emphasizing that subsequent downstream transactions are relevant for unjust enrichment considerations. The Tribunal also discussed a Rajasthan High Court case related to deemed credit on inputs, highlighting its inapplicability to the current scenario. It emphasized that indicating duty separately in invoices is crucial evidence of passing on the duty burden.The Tribunal rejected the appellant's argument that issuing credit notes absolved them of the duty burden, as it could lead to perpetual claims of absorbing duty. Consequently, the Tribunal found no reason to overturn the Commissioner (Appeals) decision, thus dismissing the appeal.