2023 (6) TMI 6 - AT - Central Excise

Supreme Court Upholds Goods Classification, Rejects Refund Claim

The Supreme Court upheld the classification of certain goods by the appellant under heading 8424, granting exemption from duty. The refund claim for ... Refund of duty paid under protest - unjust enrichment - non consideration of cost accountant certificate - denial of the refund claims filed by the appellant on the ground that appellant has not been able to establish that they have not passed on the burden of duty claimed as refund on the consumer of goods. HELD THAT:- The issue involved in matter is no longer res-integra. Tribunal has in case of COMMISSIONER OF C. EX., COIMBATORE VERSUS FLOW TECH POWER [2006 (1) TMI 37 - HIGH COURT OF JUDICATURE (MADRAS)] held that There was a factual finding by the authorities below that the duty had been paid under protest and the question of time bar would not arise. Hence, the argument that the petitioner paid the duty without protest is rejected. In respect of unjust enrichment, the facts reveal that the price was a composite one fixed by the Ministry of Agriculture. The factual position is that the duty had been absorbed by the assessee and it was submitted that the Chartered Accountant's Certificate dated 08.07.2002 and the profit and loss account, also confirm that the duty paid on the impugned goods had been absorbed by the assessee and had been shown as expenditure in profit and loss account and had not been passed on to the customer. The issue involved in the present case is squarely covered by the above referred decision of Hon’ble Madras High Court. Following the above decision there are no merits in the impugned order - appeal allowed. Issues Involved:1. Classification of goods.2. Refund claims and unjust enrichment.3. Compliance with procedural requirements.Summary:1. Classification of Goods:The appellant, engaged in the manufacture of sprinkler irrigation systems, classified certain intermediate goods (fittings and pipes) under heading 8424, claiming exemption from duty. The revenue argued these should be classified under heading 3917 and be liable to duty. The tribunal previously ruled in favor of the appellant, and the Apex Court upheld this decision.2. Refund Claims and Unjust Enrichment:The appellant filed for a refund of duties paid under protest. The tribunal remanded the matter for reconsideration of unjust enrichment, emphasizing the need for natural justice and consideration of specific reports and decisions. The Commissioner (Appeals) upheld the rejection of the refund claim on the grounds of unjust enrichment, stating the appellant failed to prove they did not pass on the duty burden to consumers. The Assistant Commissioner noted that the appellant's balance sheets and profit and loss accounts indicated the duty was treated as an expense, indirectly recovering it from customers. The appellant contested this, arguing the prices remained fixed by the government and provided various documents and certifications to support their claim. However, the adjudicating authority found these insufficient, emphasizing the duty was accounted for in manufacturing expenses, thus passed on to customers.3. Compliance with Procedural Requirements:The appellant argued the Assistant Commissioner exceeded the tribunal's directions by issuing a show cause notice. The Commissioner (Appeals) found this objection baseless, stating the tribunal's remand required a fresh examination of the issue, not limited to specific points. The Assistant Commissioner's actions were deemed compliant with the tribunal's directions.Final Judgment:The tribunal referenced the case of Flow Tech Power, where similar issues were adjudicated, and found no merit in the impugned order. The tribunal allowed the miscellaneous application for the change of name and granted the appeal, indicating the appellant was entitled to the refund.