TaxTMI 
TaxTMI 
2013 (10) TMI 263
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....3,177/-, 10,783/- & 57,214/-were filed for the periods from July 2002 to Dec. '02, July 2002 to Dec. '02, July '02 to March '03 and June '01 to March '02 respectively. The refund claims were allowed by jurisdictional Assistant Commissioner by four separate orders. However, these orders of the Assistant Commissioner were reviewed by the Commissioner u/s 35E(2) of the Central Excise Act and the Assistant Commissioner was directed to file review appeals before the Commissioner (Appeals). The appeals were filed by the Revenue on the grounds that though initially the duty was paid on the higher price and its incidence had been passed on to the customers, and subsequently when the prices were reduced from back date, the respondent had issued credit notes to the buyers to neutralize the higher incidence of duty earlier passed on, the refund would still not available as once the incidence of the duty has been passed on, subsequent issue of credit note would not make any difference and in this regard the Revenue relies upon the Larger Bench Judgments of the Tribunal in the case of S. Kumar Limited v. Commissioner of Central Excise reported in 2003 (108) ECR 79 = 2003 (153) E.L.T. 217 (Tri. ....
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....lize to such incidence of duty earlier passed on would not make any difference and the assessee would not eligible for refund, the legal position on this issue is well settled and hence, the Commissioner (Appeals)'s order is not correct. 4. Sh. Udit Jain, Advocate, the learned counsel for the Respondent, pleaded that in this case it is not disputed that though initially the incidence of higher duty paid had been passed on by the respondent to the customers, subsequently by issue a credit notes, the incidence of higher duty and higher price were neutralized and thus the incidence of higher duty earlier passed on stands neutralized, when the incidence of duty whose refund is claimed stands borne by the respondent and the same had not been passed on to the customers, its refund cannot be denied, that the Commissioner (Appeals), in this regard has rightly relied upon the judgments of the Tribunal in the cases of Bharat Box Factory Limited v. Commissioner of Central Excise, Ludhiana (supra) and CCE, Jaipur v. Universal Cylinders Ltd. (supra) that while judgment of the Tribunal in the case of Universal Cylinders Ltd. stands affirmed by the Apex Court by the way of dismissed of civil a....
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.... Ors., reported in 1997 (89) E.L.T. 247 (S.C.) = (1997) 5 SCC 536, and a judgment of the Tribunal in Sangam Processors (Bhilwara) Ltd. v. Collector of Central Excise, Jaipur reported in 1994 (71) E.L.T. 989, to contend, that once the incidence of excise duty has been passed on to the customers, it is the ultimate customer only, who can lay claim for refund, and, that, the system of issue of debit note and credit note, cannot be recognized, to lay the claim for refund. 6. On the other hand, learned counsel for the assessee submitted, that the period relates to 11-6-2001, and on 31-7-2001 itself, the refund application has been filed. It was also submitted, that issuance of debit note and credit note, in the commercial transactions, is as good as cash passing, with the result, that burden of excise duty, which was passed on by the assessee, to its customers, was immediately reversed back, and came to be suffered by the assessee only, as a result of which, there was issuance of debit notes and credit notes, and therefore, no interference is required to be made in the order of the learned Tribunal. 7. After going through the judgments, at the outset, we may observe, that the ques....
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....rchaser. 10. So far as Section 12B is concerned, it only places burden of proof on the assessee, by enacting the presumption, against him, and does not do anything beyond it. The burden placed on the assessee, by Sec. 12B, obviously is a rebuttable one, and the assessee may lead evidence in rebuttal, by proving issuance of debit note and credit note, likewise there may be cases, where purchaser may refund the amount to seller, in cash, or may issue some bank note, like Cheque, or Draft, for refund of the amount, or there may be case, where goods are sold on credit, and while making payment of price of the goods the purchaser may debit the amount, and thus, pay lesser amount to the seller, and if all those facts are shown and proved, the burden placed on the assessee, by Sec. 12B, would shift on the revenue, then, it is required for revenue, to prove, either that the theory projected by the assessee, is fake and false, or that the burden has actually been passed on. Once the assessee leads reliable evidence, about his having not passed burden on the purchaser, and revenue fails to rebut that evidence, the presumption enacted by Sec. 12B, stands sufficiently rebutted, and cannot s....
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....the appeal, the same is dismissed." 7. Thus what the Hon'ble Rajasthan High Court in the above judgment has held, is that while in terms of the provision of Section 12B of the Central Excise Act, 1944, once goods are cleared on payment of duty under invoice which mentions some amount as duty, it is presumed that the incidence of that duty has been passed on to the customer and the burden of proof that the incidence had not been passed on to the customer, is on the Assessee, this presumption is a rebuttable presumption and once the assessee produces the evidence in form of issue of credit notes to the customer or any other evidence, the burden shifts to the department and it is for the department to prove that the credit note are bogus and have not been acted upon and once it is proved that the credit notes have been acted upon and the incidence of duty earlier passed on, has been neutralized, the refund would be admissible. We find that the same view have been taken by the Hon'ble Karnataka High Court in the case of Sudhir Papers Limited v. CCE, Commissioner of Central Excise, Bangalore-I, reported in 2012 (276) E.L.T. 304 (Kar.). We also take note of the fact that Tribunal in t....