TaxTMI 
TaxTMI 
2012 (11) TMI 487
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.... Oriented Yarn (POY) but was credited to the Consumer Welfare Fund as the appellant had not rebutted the presumption of unjust enrichment. The appeal filed before the Commissioner (Appeals) was rejected but the appellant succeeded before the Tribunal on the ground that the said principle was not applicable in case of goods used for captive consumption in view of the then prevailing case decided by the Hon'ble High Court of Mumbai in respect of Solar Pesticides Limited vs. UOI reported in 1992 (57) ELT 201. The matter was carried to the Hon'ble Supreme Court by the department. By that time, the judgment of the Hon'ble High Court of Mumbai in the case of Solar Pesticides (supra) was reversed by the Hon'ble Supreme Court as reported in 2000 (1....
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....dered to be credited in the consumer welfare fund since the appellant has not successfully rebutted the presumption of unjust enrichment. 6. Appellant had used MEG as raw material for the manufacture of POY. Since the material imported has not been sold as such, in terms of decision of the Hon'ble Supreme Court, appellants are required to show that they have not passed on the duty liability to the customers for claiming refund. It is the claim of the appellant which has not been contradicted or disputed that they had used the raw material in the trial run in Nov 1990 even though importation had taken place in March 1990 itself. In the show cause notice issued to the appellants on 18.02.2005, appellants were informed that invoices ....
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....untant s Certificate to show that by the time POY was manufactured out of MEG imported and sold, the price of final products POY had come down drastically and consequently the appellant had to sell the goods at loss. The Cost Accountant s Certificate giving details of the cost is as under:- Cost of production/ realization during trial run Particulars Amount (in Rs.) Cost per MT Quantity produced/ sold 484.821MT Material consumed 4,10,16,103.00 84,600.51 Salary & Wages 5,04,743.00 1,041.09 Power & Fuel 21,35,339.00 4,404.39 Stores consumables & other expenses 1,65,94,748.00 ....
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....rom the cost certificate reproduced above, it can be seen that net realisation was Rs. 1.87 Crores approximately and appellants had suffered a loss of Rs. 4.44 Crores approximately. The Commissioner has rejected this claim on the ground that raw material cost was about 1.13 Crores whereas, the net realisation was Rs. 1.87 Crores and therefore, the realisation of finished goods is higher than the cost of finished goods. However, the cost itself shows that the value of materials consumed was Rs. 4.10 Crores and other costs have to be added. Only when the material imported is sold as such, the method adopted by the Commissioner can be acceptable. In a case like this, where raw material have been used for manufacture, what is required to be see....
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....the statutory audit firm, and in respect of trial run period during which the aforesaid imported Mono Ethylene Glycol was used, concluded loss of Rs. 443.800 Lac which is also reflected in their audit records. The cost per Kg of the goods produced works out to Rs. 130.20 per kg while the company could realise only Rs. 38.75 (net of duty/ taxes) per kg. The conclusion drawn there from is that the company had not included the excess amount of the Customs duty paid under protest on imported MEG in the costing of their finished goods in trial run production. The Company has not received/ lodged any refund claim (other than Rs. 23,38,113/- against Mono Ethylene Glycol under Bill of Entry No. 1566 dated 16.3.1990) against Central Excise....