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of <h1>Refund claim non-maintainable; appeal dismissed for July-Nov 2015 sales due to unjust enrichment under Sections 12/12A</h1> <h3>M/s Pigeon India Pvt. Ltd Versus Commissioner of Customs & Central Excise, Greater Noida</h3> M/s Pigeon India Pvt. Ltd Versus Commissioner of Customs & Central Excise, Greater Noida - TMI ISSUES PRESENTED AND CONSIDERED 1. Whether a refund claim under Section 11B/11A of the Central Excise Act is maintainable when the claimant has not challenged its self-assessment by way of appeal before the appellate authority. 2. Whether the doctrine of unjust enrichment bars grant of refund where price uniformity before and after reassessment/reclassification is shown. 3. What is the evidentiary standard to rebut the statutory presumption that the incidence of excise duty has been passed on to the buyer (Sections 12A/12B), and whether a Chartered Accountant's certificate and books of account (balance sheet/ledgers) suffice. 4. Which precedents govern when High Court decisions conflict: the binding effect of Supreme Court precedent and the requirement to follow the jurisdictional High Court. ISSUE-WISE DETAILED ANALYSIS - MAINTAINABILITY OF REFUND WHEN SELF-ASSESSMENT NOT APPEALED Legal framework: Refund provisions operate within the scheme of assessment and appeals (Sections 17, 27, 128 and related refund provisions). Supreme Court authority holds that refund proceedings are not a forum for re-assessment; an order of self-assessment must be modified by appropriate proceedings (appeal/re-assessment) before a refund claim can be entertained. Precedent treatment: The Court follows the Supreme Court ruling that applications for refund cannot be entertained to re-open or modify self-assessment; appeal under Section 128 is the remedy to challenge assessment orders. This principle was applied to customs/excise refund jurisprudence cited in the judgment. Interpretation and reasoning: The Tribunal treats refund processing as execution of a pre-existing assessment order; permitting refund adjudication to become a substitute for assessment/re-assessment would contravene statutory scheme. Where the claimant has not sought modification of its self-assessment (no appeal filed), serious doubts arise as to maintainability of the refund claim. Ratio vs. Obiter: Ratio - refund cannot substitute for reassessment; claimant must seek modification of self-assessment under the statutory appeal/re-assessment provisions before refund can be allowed. Obiter - procedural observations about timing and practicality of buyer claims. Conclusion: The Tribunal finds maintainability in doubt where self-assessment was unchallenged; this ground supports denial of the refund claim unless assessment is first properly modified. ISSUE-WISE DETAILED ANALYSIS - UNJUST ENRICHMENT AND PRICE UNIFORMITY Legal framework: Section 11B(2) proviso and Section 12B create the statutory scheme for refund and a presumption that duty incidence has been passed on to buyers unless proved otherwise. Precedent treatment: Conflicting High Court decisions exist. The Tribunal gives primacy to Supreme Court authority (Allied Photographics and subsequent decisions) and to the jurisdictional High Court's application of that authority (Sanat Products), over the contrary view expressed by a different High Court (Ashish Rolling Mills). The Tribunal cites and follows Supreme Court jurisprudence establishing that uniformity of price before and after assessment is not determinative of non-passing on of duty. Interpretation and reasoning: Uniform prices (pre- and post-assessment) do not create an inevitable inference that the duty was not passed on; such uniformity may result from multiple commercial factors (costing, treatment by distributors, contractual pricing). The statutory presumption under Sections 12/12B requires cogent evidence to rebut; absent such proof, unjust enrichment doctrine applies and refund must be disallowed or credited to Consumer Welfare Fund. Ratio vs. Obiter: Ratio - mere price uniformity does not rebut the statutory presumption; claimant must produce cogent, primary evidence showing that the duty incidence was not passed to any buyer. Obiter - references to commercial explanations for price stability and remand directions referencing other cases. Conclusion: The Tribunal upholds the view that the doctrine of unjust enrichment applies; the refund is hit by unjust enrichment where the claimant has not rebutted the statutory presumption with adequate evidence. ISSUE-WISE DETAILED ANALYSIS - EVIDENTIARY STANDARD: CHARTERED ACCOUNTANT CERTIFICATE, BOOKS AND PRIMARY DOCUMENTS Legal framework: Sections 12/12A/12B impose a presumption that duty was passed on; evidentiary burden rests on claimant to rebut by production of primary documentary evidence (invoices, sales documents) showing duty was not reflected in sale price to buyers. Precedent treatment: Authorities (including decisions of Supreme Court and various High Courts/Tribunals) establish that a Chartered Accountant's certificate is only corroborative evidence and cannot, by itself, conclusively dispel presumption of passing on; ledger/balance sheet entries are secondary evidence and must be supported by primary transactional documents. Interpretation and reasoning: A generic or conclusory Chartered Accountant certificate that merely asserts duty was not passed on, without demonstrating cost structures, invoice evidence, or primary transactional records, fails to meet the statutory requirement. Balance sheet/ledger entries, indicated short-term loans or receivables, do not by themselves show that excise duty was borne by the claimant rather than transferred to buyers. The Tribunal requires primary documents that directly evidence non-passing on of duty. Ratio vs. Obiter: Ratio - CA certificates and ledger/balance sheet entries are insufficient, standing alone, to rebut statutory presumption; primary transactional evidence is required. Obiter - illustrative citations on when CA certificates have been accepted or rejected depending on corroboration. Conclusion: The CA certificate and accounts produced in the present proceedings were nonspecific and did not satisfy the statutory evidentiary standard; they could not rebut the presumption of passing on and therefore could not sustain the refund claim. ISSUE-WISE DETAILED ANALYSIS - PRECEDENTIAL HIERARCHY AND CHOICE OF AUTHORITIES Legal framework: Article 141 mandates that law declared by the Supreme Court binds all courts; in case of conflicting High Court decisions, the decision of the jurisdictional High Court is to be followed by subordinate authorities unless overruled by the Supreme Court. Precedent treatment: The Tribunal accords primacy to the Supreme Court's interpretations and to the jurisdictional High Court's application of that law. It expressly declines to follow the contrary view of another High Court where such decision disregarded Supreme Court precedent. Interpretation and reasoning: Where a High Court decision conflicts with binding Supreme Court precedent, the latter prevails. Where multiple High Courts differ, the view of the jurisdictional High Court governs that territory; the appellate authority acted within this hierarchy in preferring Supreme Court and jurisdictional High Court authorities over a contrary High Court decision suggested by the Tribunal's earlier remand. Ratio vs. Obiter: Ratio - binding hierarchy requires adherence to Supreme Court law and, in case of inter-High Court conflict, to the jurisdictional High Court's pronouncement. Obiter - references to judicial discipline and avoidance of needless litigation. Conclusion: The Tribunal correctly applied binding Supreme Court law and the jurisdictional High Court's stance; reliance on the out-of-territory High Court decision was appropriately declined. FINAL CONCLUSIONS (ISSUE-LEVEL CROSS-REFERENCES) 1. Maintainability: Refund claim processing cannot be used to re-open or modify an unchallenged self-assessment; the statutory appeal/reassessment route must be availed first. 2. Unjust enrichment: Uniform pricing does not, by itself, rebut the statutory presumption of passing on; claimant must adduce primary evidence to negate unjust enrichment. 3. Evidence: A Chartered Accountant's certificate and ledger or balance sheet entries are, without corroborative primary transactional documents (invoices, sales records showing duty not included), insufficient to discharge the burden under Sections 12/12B/11B. 4. Precedent: Supreme Court jurisprudence and the jurisdictional High Court's application of it govern; contrary High Court views are not followed where they conflict with Supreme Court authority. Application to facts/conclusion: On the facts before the Court-absence of appeal against self-assessment, absence of primary transactional documentation, reliance on a nonspecific CA certificate and ledger entries-the statutory presumption remained unrebutted; the claim is therefore barred by unjust enrichment and maintainability principles, warranting dismissal of the appeal and recovery/credit of the sanctioned refund amount as required by law.
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