1997 (7) TMI 119 - SC - Central Excise

Court clarifies Section 37B demands timing, sets burden of proof for refund claims

HM BAGS MANUFACTURER Versus COLLECTOR OF CENTRAL EXCISE

The Court held that demands under Section 37B cannot be raised before the notification date of trade notice No. 29, and the use of 'henceforth' in the ... Demand - Departmental Clarification Issues involved:The effective date for raising demand under Section 37B of the Central Excises and Salt Act and the application of Section 11A in the present case.Judgment Summary:Issue 1: Effective date for raising demand under Section 37BThe appellant contended that the demand could not be from any date prior to the issuance of trade notice No. 29 on 5-11-1992, which notified the reclassification. It was argued that actions under Section 37B are effective from the date of notification or publication, as per existing practice. The Board's order dated 24th September, 1992, was only published on 5-11-1992, and hence, the demand by the revenue cannot be prior to this date. The use of the word 'henceforth' by the Board also supported this interpretation. The Court accepted this submission, holding that the demand cannot be from any date before 5-11-1992.Issue 2: Application of Section 11A and refund claimIt was noted that the duty had already been paid by the appellant. The Court emphasized that the discipline of amended Section 11B must be followed for claiming a refund, and it is the appellant's burden to demonstrate that the duty has not been passed on to consumers to support the refund claim. Consequently, the appeals were allowed, and the Tribunal's orders were set aside.This judgment clarifies the significance of the effective date for raising demands under Section 37B and the requirements for claiming a refund under Section 11B, emphasizing the burden of proof on the appellant regarding passing on the duty to consumers.