TaxTMI 
TaxTMI 
TaxTMI 
2010 (2) TMI 439
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....mer. 3. The facts, in brief, relevant for the decision are that the appellants were engaged in the manufacture of Processed Manmade Fabrics classifiable under Chapter 54 and 55 of the Schedule to the Central excise Tariff Act, 1985. They used to receive Grey Fabrics from various Grey Fabric suppliers and used to return the Processed Fabrics to the dealers on payment of duty on the basis of job work done and processed on such fabric procured by them. In terms of Trade Notice No. 18/CEX/2001/M-III, dated 20-3-2001 issued by Bombay Commissionerate the appellants were paying duty on the assessable value arrived at on the basis of 115% of the cost of production, though subsequently pursuant to the issuance of the Board's Circular No. 610/10/2002-CX., dated 19-2-2002 it was settled that the duty liability on the processed fabrics payable would be on the basis of principles laid down by the Hon'ble Supreme Court in the case of Ujagar Prints Ltd., reported in 1989 (39) E.L.T. 493 (S.C.) i.e. on the assessable value taking into account the landed cost of raw material plus job charges including actual profit margin. So, the appellants filed the refund claim. The adjudicating authority found....
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....hority and the Commissioner (Appeals) submitted that the decision by the lower authorities is in consonance with the decision in the matter of Mafatlal Industries Ltd. v. UOI, reported in 1997 (89) E.L.T. 247 (S.C.). He further submitted that the provision of law comprised under Section 11B(2) clearly requires that the amount refundable is required to be credited to the Consumer Welfare Fund unless the claimant clearly establishes that the duty burden in that regard has not been passed on to the ultimate consumer. Drawing our attention to the decision in the case of Sangam Processors (Bhilwara) Ltd. v. CCE, Jaipur, reported in 1994 (71) E.L.T. 989 (Tribunal) he submitted that in the said case the Tribunal had held that issuance of credit note can not establish the discharge of burden cast upon the claimant in terms of Section 12B of the Central Excise Act, 1944. He further submitted that the findings arrived at by the authorities below are based on proper analysis of the material on record. As far as letters of M/s. Sangam Suitings Ltd. are concerned, he submitted that the same is sister concern of the appellants, and if those letters could be procured by the appellants it is not u....
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....ve documents, neither of the contents were disputed nor any counter evidence in this regard was produced by the department. As rightly pointed out by the learned Advocate this relevant aspect of the matter was not considered either by the adjudicating authority or Commissioner (Appeals) while deciding the matter. 8. Once it was established by the appellants that the burden in relation to the amount which was sought to be claimed was not passed on to the dealer to whom goods were supplied, the burden cast upon them in terms of Section 12B was clearly discharged and the onus had shifted upon to the department. Since there is no evidence produced by the department to counter the said material on record, we have no hesitation in holding that as far as amount of Rs. 31,83,519/- is concerned, there is no proof of passing on the burden upon their dealers. 9. It is further sought to be contended by the learned D.R. that it is not sufficient for the claimant to establish that the burden had not been passed on to the dealer but it has to be established that the burden has not been passed on to the ultimate consumer. There can be no doubt about this proposition which has been reiterated in ....
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.... raw material but, no credit notes were credited in the account of the customers by the assessee. We may at once observe, that this is no where, that the authorities below were of the view, that the debit note were not credited in the account of the customers, by the assessee. Rather as is clear from the impugned order of the Tribunal, that it was not disputed on the side of the revenue, that customer had immediately issued the debit notes, and it was never contended, whether before the Assistant collector or the Commissioner (Appeals), or the Tribunal, that the necessary credit was not given by the assessee. Obviously, if it is to be assumed, that though debit notes were issued by the customers, but, the assessee did not credited to them, then, obviously, the assessee would not be entitled to claim for any refund, while, herein positive case of the assessee is, that it also issued corresponding credit notes, which fact has also not been disputed any where, before the authorities below. Therefore, the question required to be examined is, as to whether despite exchanges of debit notes and credit notes respectively, between the assessee and its immediate purchaser, the assessee is n....
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....ourt in Mafatlal case being preposition No. 3, entitling only the ultimate person, bearing the burden, to be entitled to lay claim for the refund, is obviously, not open to any argument, and is duly respected. The question, then arise is, the question of fact, as to who is an ultimate person, who has borne the burden. Obviously, if it is established by the assessee, that the burden has not been passed on, or has been appropriately reversed, the ultimate person, who has suffered the burden, would be assessee himself." 13. Ultimately the Rajasthan High Court held thus :- "It is faced with this situation, that the submission made by the learned counsel for the revenue, was, that in the scheme of things, when the goods are sold or cleared for sale, it has to be assumed, that the burden has been passed on to the purchaser, and this process of issuance of debit note or credit note, cannot have the effect of reversal of passing of the burden, as it is only a paper transaction, to get undue benefit by the assessee. In our view, the stand cannot be accepted. Passing on the burden of excise duty to the next purchaser, cannot be left in the realm of presumption. In cases, where the ass....
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....sistent with the general pattern of commercial life. .................................Ordinarily speaking, no manufacturer would take the risk of not passing on the burden of duty. It would not be an exaggeration to say that whenever a manufacturer entertains a doubt, he would pass on the duty rather than not passing it on. It must be remembered that manufacturer as a class are knowledgeable persons and more often than not have the benefit of legal advice." 17. Above ruling of the Apex Court in relation to Section 12A and 12B of the said Act clearly discloses that in case of contention of the manufacturer about non-passing of duty burden in relation to the goods cleared by him, he has to establish the claim in that regard by producing cogent evidence in support of such claim. Until burden in this regard is discharged by producing the cogent evidence, the requirement of Section 12B does not stand satisfied, and therefore, presumption would not stand rebutted till then. 18. In A.K. Spintex Ltd. case, the assessment of the facts as revealed from para 9 quoted hereinabove clearly discloses that the claim regarding issuance of debit note and credit note was not disputed and was clear....