TaxTMI 
TaxTMI 
2016 (8) TMI 1071
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....000 passed by the Madras High Court in R.C. No. 01 of 1999. Civil Appeal No. 14689 of 2015 was filed by the Revenue against the judgment dated 26.11.2014 in Central Excise Appeal No. 21 of 2009. Special Leave Petition (C) Nos. 18426 of 2015, 18423 of 2015, 18425 of 2015, 23722 of 2015, 12282 of 2016, 16142 of 2016 and 16141 of 2016 are filed against the judgment of the Andhra Pradesh High Court in Central Excise Appeal Nos. 21 of 2005, 9 of 2005, 51 of 2004, 10 of 2005, 44 of 2004, 38 of 2004 and 18 of 2005 respectively. 3. Civil Appeal No. 8488 of 2009 is filed against the judgment dated 20.08.2008 passed by the Bombay High Court in Central Excise Appeal No. 100 of 2008 and Special Leave Petition (C) No. 25055 of 2009 is filed by the Union of India against the judgment dated 26.11.2008 of the High Court of Rajasthan at Jodhpur in D.B. Central Excise Appeal No. 34 of 2007. 4. Civil Appeal No. 7906 of 2002 will be taken as the lead matter as SLP (C) Nos. 18426, 23722, 18425, 18423 of 2015 and 12282, 16141 and 16142 of 2016 and Civil Appeal No. 14689 of 2015 were disposed of by the Andhra Pradesh High Court by following the Madras High Court's impugned judgment in Civil Appeal No. ....
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....-in-Original dated 27.10.1992 holding that the Assessee is entitled for the refund claimed by him. The Collector of Central Excise by Order-in-Appeal dated 20.10.1993 rejected the appeal filed by the Revenue and upheld the order dated 27.10.1992 of the Assistant Collector of Central Excise, Madras Vth Division. The Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT), South Zone Bench of Madras allowed the appeal filed by the Revenue against the order dated 20.10.1993 of the Collector of Central Excise. The Tribunal held that the Assessee would be entitled to grant of refund only if he had not passed on the duty burden to his buyers. It was also held that the buyer in turn, would be entitled to claim refund only if he has not passed on the incidence of duty to any other person. It was further held by the Tribunal that the event which gives rise to cause of action for refund is payment of duty made in respect of goods cleared from the factory and once the duty burden has been passed on to the buyer at the time of clearance, issuance of credit note at a later point of time would not entitle the Assessee to claim any refund. The Tribunal also held that burden of duty is norma....
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....tor General submitted that a claim for refund can be entertained only when the claimant has not passed on the duty to any other person. By referring to the statement of objects and reasons for the amendment made to the Central Excises & Customs Laws (Amendment) Act 1991, the learned Additional Solicitor General submitted that the Act had given effect to the recommendations of the Public Accounts Committee whereby the refund of any duty was proposed to be made only to the person who ultimately bears the incidence of such duty. He submitted that it would be necessary for a verification to be done to find out as to who actually bore the burden of duty. According to him such verification would not stop with the manufacturer and his buyer but would extend to the ultimate buyer i.e. the consumer. He submitted that there can be no claim for refund on the basis of post clearance transactions. He further submitted that there is a presumption, though rebuttable, that the full incidence of the duty has passed on to the buyer of the goods. The learned Additional Solicitor General has strongly relied upon Mafatlal Industries Ltd. and Others Vs. Union of India And Ors., reported in (1997) 5 SCC ....
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....ubmitted that the buyer mentioned in the said provisions would be the buyer of the goods from the manufacturer Assessee. He stressed upon Clauses 'a' to 'f' of the Proviso to Section 11-B (2) in support of his submission that the only persons eligible to make a claim for refund would be the manufacturer, his buyer and a class of persons as notified by the Central Government. On the basis of the above submission, he states that there is absolutely no necessity for any verification to be made as to who is the ultimate consumer and as to whether he had borne the burden of the duty. According to him, if the manufacturer is entitled for a refund towards an admissible deduction, such refund has to be given to him if he did not retain the benefit. He also stated that the judgment of this Court in Mafatlal Industries Ltd. & Ors. Vs. Union of India (supra) which was relied upon by the learned Additional Solicitor General would, in fact, support his case. He further submitted that the identity of the Excise duty is lost at the sales conducted downstream as the duty becomes part of the price. 13. In reply to the submissions of Mr. Venkatraman, Sr. Advocate, the Ld. Additional Solicitor Gener....
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....oner of Central Excise or Deputy Commissioner of Central Excise] before the expiry of [one year] [from the relevant date] [[in such form and manner] as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12A) as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty had not been passed on by him to any other person : Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, (40 of 1991), such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) as substituted by that Act :] [Provided further that] the limitation of [one year] shall not apply where any duty has been paid under protest. * * * * (2) If, on receipt of any such application, the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] is satisfied tha....
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.... notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder. (5) For the removal of doubts, it is hereby declared that any notification issued under clause f of the first proviso to sub-section (2), including any such notification approved or modified under sub-section (4), may be rescinded by the Central Government at any time by notification in the Official Gazette.] [Explanation. - For the purposes of this section, - (A) "refund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (B) "relevant date" means, - (a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods, - (i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leav....
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....ed on the full incidence of such duty to the buyer of such goods. SECTION 12C. Consumer Welfare Fund. - (1) There shall be established by the Central Government a fund, to be called the Consumer Welfare Fund. (2) There shall be credited to the Fund, in such manner as may be prescribed, - (a) the amount of duty of excise referred to in sub-section (2) of section 11B or sub-section (2) of section 11C or sub-section (2) of section 11D; (b) the amount of duty of customs referred to in sub-section (2) of section 27 or sub-section (2) of section 28A, or sub-section (2) of section 28B of the Customs Act, 1962 (52 of 1962); (c) any income from investment of the amount credited to the Fund and any other monies received by the Central Government for the purposes of this Fund. SECTION 12D. Utilisation of the Fund. - (1) Any money credited to the Fund shall be utilised by the Central Government for the welfare of the consumers in accordance with such rules as that Government may make in this behalf. (2) The Central Government shall maintain or, if it thinks fit, specify the authority which shall maintain, proper and separate account and other relevant records in rela....
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.... doctrine of unjust enrichment is a just and salutary doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his purchaser at one end and also collect the same duty from the State on the ground that it has been collected from him contrary to law. The power of the Court is not meant to be exercised for unjustly enriching a person. The doctrine of unjust enrichment is, however, inapplicable to the State. State represents the people of the country. No one can speak of the people being unjustly enriched". 17. Section 11-B (2) of the Act contemplates that the amount of refund determined by the Authorities shall be credited to the fund. The Proviso to Section 11-B (2) permits the refund to be paid to the applicant instead of being credited to the fund if such amount is relatable to the manufacturer, the buyer or any other such class of applicants as notified by the Central Government. 18. Mr. Venkatraman interpreted the said provision to mean that the only persons who were entitled for claim of refund are the manufacturer, his buyer and any other class of persons as notified by the Central Government. There is no dispute about ....
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....efund to the consumer in the rules this Court in Mafatlal Industries Vs. Union of India (supra) held as follows:- "98. A major attack is mounted by the learned counsel for petitioners-appellants on Section 11-B and its allied provisions on the ground that real purpose behind them was not to benefit the consumers by refusing refund to manufacturers (on the ground of passing on the burden) but only to enable the Government to retain the illegally collected taxes. It is suggested that the creation of the Consumer Welfare Fund is a mere pretence and not an honest exercise. By reading the Rules framed under Section 12-D, it is pointed out, even a consumer, who has really borne the burden of tax and is in a position to establish that fact, is yet not entitled to apply for refund of the duty since the Rules do not provide for such a situation. The Rules contemplate only grants being made to Consumer Welfare Societies. Even in the matter of making grants, it is submitted, the Rules are so framed as to make it highly difficult for any consumer organisation to get the grant. There is no provision in the Act, Shri Nariman submitted, to locate the person really entitled to refund and to make....
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.... the purchaser of goods applying for and obtaining the refund where he can satisfy that the burden of the duty has been borne by him alone. Such a person can apply within six months of his purchase as provided in clause (e) of Explanation B appended to Section 11-B. It is, therefore, not correct to contend that the impugned provisions do not provide for refunding the tax collected contrary to law to the person really entitled thereto. A practical difficulty is pointed out in this behalf by the learned counsel for appellants-petitioners: It is pointed out that the manufacturer would have paid the duty at the place of "removal" or "clearance" of the said goods but the sale may have taken place elsewhere; if the purchaser wants to apply for refund - it is submitted - he has to go to the place where the duty has been paid by the manufacturer and apply there. It is also pointed out that purchasers may be spread all over India and it is not convenient or practicable for all of them to go to the place of "removal" of goods and apply for refund. True it is that there is this practical inconvenience but it must also be remembered that such claims will be filed only by purchasers of high-pri....
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....sion Bench of the High Court of Andhra Pradesh in Central Excise Appeal Nos. 51 of 2004 and 10, 9 and 21 of 2005. Civil Appeals arising out of SLP (C) Nos. 12282, 16141 and 16142 of 2016 are filed by the Commissioner of Central Excise, Vishakapatnam against the judgment dated 01.07.2015 of a Division Bench of the High Court of Andhra Pradesh in Central Excise Appeal Nos. 44 and 38 of 2004 and 18 of 2005. These three appeals were disposed of by the High Court in terms of its earlier judgment dated 19.02.2014. 25. The Assessee i.e. Andhra Pradesh Paper Mills Ltd. manufactures Paper and Paper boards. There is no dispute that excise duty is paid by the Assessee and the same is passed on to its buyers. Applications were filed by the Assessee for refund of amounts towards trade discounts that were given to its buyers. The refund claim is on the basis of credit notes raised by the Assessee subsequent to the sale/removal of goods. The credit notes that were raised by the Assessee were towards trade discounts which included the component of excise duty. The refund claims of the Assessees were rejected by the Assistant Commissioner of Central Excise, Rajahmundry Division. The Commissioner C....
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.... The Assessee preferred an appeal to the High Court aggrieved by the order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Division, Bangalore. The High Court following its own judgment in Andhra Pradesh Paper Mills Vs. Commissioner of Central Excise allowed the appeal. The point in this appeal is identical to the issue in Civil Appeal No. 7906 of 2002. The Appeal filed by the Revenue is allowed in terms of the judgment in Civil Appeal No. 7906 of 2002. Special Leave Petition (C) No. 25055 of 2009 Leave granted. 31. The Assessee is engaged in the processing of man-made fibre. Prior to 11.06.2001 the CENVAT credit admissible on the declared inputs used in the manufacture of process of man-made fibre was 45 per cent. The net duty payable on the fibre was 55 per cent of the effective duty. On 11.06.2001, a notification was issued increasing CENVAT credit from 45 per cent to 50 per cent which resulted in the net duty payable being 50 per cent. The Assessee continued to pay the effective duty at 55 per cent for a short period between 11.06.2001 to 13.06.2001. The effective duty of excise is 16 per cent and the duty payable from the personal ledger account prior ....
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....t note regarding the excess duty. The High Court had further held that passing on the burden of excise duty to the ultimate buyer cannot be left in the realm of presumption. 34. In Civil Appeal No. 7906 of 2002, we have already held that in the claim for refund of excess duty paid can be allowed only in case where the burden of duty has not been passed on to any other person, which includes the ultimate consumer as well. The findings in the Order-in-Original and the Order-in-Appeal are that the excise duty paid originally at the rate of 8.8 per cent was passed on from the Assessee-processor to the owner of the fabric and later to the customers. The point in this Appeal is also identical to that of Civil Appeal No. 7906 of 2002. The above appeal of the Revenue is allowed. Civil Appeal No. 8488 of 2009 35. The respondent-Assessee is a 100 per cent Export Oriented Unit (EOU) manufacturing cotton yarn. The respondent filed an application for refund of an amount of Rs. 2,00,827/- on 14.08.2002 on the ground that it had paid excess excise duty at the rate of 18.11 per cent instead of 9.20 per cent. The Assessee initially passed on the duty incidence to its customers. Later the Assesse....