2017 (7) TMI 242 - HC - Central Excise

Court overturns Tribunal decision on refund order challenge due to lack of justification, remands for fresh hearing.

The Court set aside the Tribunal's decision in a challenge to an order granting a refund, finding that the Tribunal failed to provide sufficient ... Unjust enrichment - Whether the order of Tribunal can be sustained in as much as it has not met with the contentions of the Appellant, no material facts are discussed and has not considered the aspect of presumption as envisaged under Section 12B of the Central Excise Act? - Held that: - The reasons are short to hold that the burden has been discharged by the Assessee. The rates in the commercial invoice and the excise invoice have not been discussed. The difference in the said rates has not been considered in the judgment. Such a decision can not been sustained - matter remanded back to tribunal. Issues:Challenge to order granting refund upheld by Tribunal.Analysis:The appeal questioned whether the Tribunal's order could stand as it allegedly did not address the Appellant's contentions, failed to discuss material facts, and overlooked the presumption under Section 12B of the Central Excise Act. The Appellant argued that the burden of proof lies with the Assessee to demonstrate that the duty burden was not passed on to the customer, and in this case, the Assessee failed to do so. Merely maintaining the sale price without additional evidence does not automatically prove that the duty burden was not transferred, potentially leading to unjust enrichment without independent verification.Analysis:Conversely, the Respondent contended that they had shown that the duty burden was not shifted to the customer. Evidence such as unchanged sale prices, commercial and excise duty invoices, along with a CA's Certificate, indicated that the burden had not been passed on. Both the Commissioner (Appeals) and the Tribunal had considered these factors. The Respondent argued that these facts successfully rebutted the presumption under Section 12B.Analysis:Upon review, the Court acknowledged the presumption under Section 12B that the Assessee passes on the tax burden to the customer, placing the initial burden on the Assessee to refute this presumption. Critically, the Tribunal's decision lacked detailed reasoning, with a brief explanation provided for concluding that the Assessee had met their burden. The judgment failed to discuss the rates in the invoices, crucial for assessing whether the burden had been discharged. Consequently, the Court found the Tribunal's decision lacking necessary justification to demonstrate that the Assessee had effectively rebutted the statutory presumption.Analysis:In light of the above, the substantial question was resolved in favor of the Appellant. The impugned judgment was set aside, and the matter was remanded to the Tribunal for a fresh hearing. Both parties were directed to appear before the Tribunal for a new decision on 17th July 2017. Importantly, the Court clarified that it had not delved into the case's merits, leaving all arguments open for further consideration by the Tribunal.