AI Drafter 
TaxTMI 
TaxTMI 
2014 (7) TMI 401
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....ct to the condition that the manufacturer does not avail CENVAT credit of the duty paid on inputs used in the manufacture of such yarn of waste wool. During the period 1/01/2002 to 30/06/2002, the respondent consumed inputs such as rags and synthetic waste apart from polyester tops and took credit of the of excise duty paid on synthetic waste and polyester tops. Using such cenvatted material, they manufactured yarn of waste wool which were in turn consumed in the manufacture of blankets, shawls and woolen fabrics. On the yarn so manufactured, initially they paid duty. Subsequently they filed a refund claim for the refund of duty of Rs. 76,61,460/- being the amount of duty paid on yarn. The claim was filed with the department on 12/08/2012. However, subsequently on 24/08/2002 the respondent claimed to have reversed CENVAT credit taken on inputs used in the manufacture of waste wool amounting to Rs. 3,12,569/-. The said claim was rejected by the adjudicating authority on two grounds. The first ground was that inasmuch as the reversal was not done at the time of clearance of the yarn and the duty liability was discharged on the yarn, the respondent did not follow the provisions of Rul....
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....AR also submits that the respondent has not crossed the bar of unjust enrichment inasmuch as no evidence has been led to show that they have not passed on the duty incidence to anybody else. Merely, because the cost of the finished products remained constant both during the period of refund as well as afterwards, that by itself cannot lead to the conclusion that there is non-transfer of duty incidence to the buyers. Reliance is placed on the decisions of this Tribunal in the case of CEAT Ltd. vs. Commissioner of Central Excise, Aurangabad 2012 (281) ELT 126; Sona Udyog Ltd. vs. Commissioner of Central Excise, Indore - II 2005 (183) ELT 396; Toyota Kirloskar Motor Ltd. vs. Commissioner of Central Excise, Aurangabad 2012 (286) ELT 690; the decision of the hon'ble apex Court in the case of Sahakari Khand Udyog Mandal Ltd. vs. Commissioner of Central Excise & Customs 2005 (181) ELT 328 (SC); and Mafatlal Industries Ltd. vs. Union of India 1997 (89) ELT 247 (SC) in support of the above contention. Reliance is also placed on the decision of the apex Court in the case of Commissioner of Central Excise, Mumbai-II vs. Allied Photographics India Ltd. 2004 (166) ELT 3 (SC). 3.2 Relianc....
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.... and the same were expensed out in the profit and loss account. 5. We have carefully considered the submissions made by both the sides. 5.1 In the present case, the refund is claimed consequent to availment of benefit under Notification 67/95. The said Notification provided that the benefit of exemption would be available when goods are captively consumed in the manufacture of exempted final products only when no CENVAT credit of the duty paid on the inputs used in the manufacture of intermediate products arising in the manufacture of final products is taken. In the present case, CENVAT credit has been availed by the respondent in respect of synthetic waste and polyester tops. From these raw materials, the respondent has made the yarn of waste wool was captively consumed in the manufacture of blankets, shawls, etc. which were exempt from payment of duty. It is on record that the respondent did not reverse the credit taken at the time of captive consumption of yarn. Credit was not reversed even at the time of filing of the refund claim in August, 2002 and was claimed to have been made on 24/08/2002. From the records submitted by the respondent before the adjudicating authority....
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....s at less than the cost-price plus duty. He cannot survive in business if he does so. Only in case of distress sales, such a thing is understandable but distress sales are not a normal feature and cannot, therefore, constitute a basis for judging the validity or reasonableness of a provision. Similarly, no one will ordinarily pass on less excise duty than what is exigible and payable. A manufacturer may dip into his profits but would not further dip into the excise duty component. He will do so only in the case of a distress sale again. Just because duty is not separately shown in the invoice price, it does not follow that the manufacturer is not passing on the duty. Nor does it follow therefrom that the manufacturer is absorbing the duty himself. The manner of preparing the invoice is not conclusive. While we cannot visualise all situations, the fact remains that, generally speaking, every manufacturer will sell his goods at something above the cost-price plus duty. There may be a loss-making concern but the loss occurs not because of the levy of the excise duty - which is uniformly levied on all manufacturers of similar goods - but for other reasons. No manufacturer can say with ....