TaxTMI 
TaxTMI 
2023 (11) TMI 252
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....15 dtd 20.11.2015 04/2015-06/2015 8,75,181/- 19.11.2016 27.01.2017 29/2015 dtd 17.12.2015 07/2015-09/2015 9,45,310/- 16.12.2016 27.01.2017 02/2016 dtd 26.04.2016 10/2015-12/2015 20,69,149/- 25.04.2017 27.01.2017 06/2016 dtd 01.06.2016 01/2016-03/2016 27,26,372/- 31.05.2017 27.01.2017 10.2016 dtd 29.11.2016 04/2016-06/2016 33,48,460/- 28.11.2017 18.01.2017 2.2 After issuing show cause notices to the appellant in respect of each of the refund claim, the refund claims filed by the appellant were rejected by the Deputy Commissioner vide his order in original No 04/Refund/Div II/2017. Deputy Commissioner has recorded as following in the order for rejection of refund claims: "9. Moreover the party has also not replied to the preposition of the Show Cause Notice that any such amount of refund should be credited to to the Consumer Welfare Fund in accordance with the provisions of Section 11 B (2) read with Section 12 C of the Act, ibid as the party is deemed to have passed on the full incidence of such duty to the buyer of such goods unless the contrary is proved by them as provided vide Section 12B of Cent....
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....urse of argument. 4.2 Impugned order record as follows for rejection of the refund claims filed by the appellant. "4.1 I have gone through the facts of case, the averments made at the time of the personal hearing and all other materials/ documents on record. It is observed that: (i) The appellant had filed the refund claims after finalization of their provisional assessments. In the final assessment orders, it was held that the appellant had paid excess duty, on account of discount allowed through credit notes. Further, all the final assessment orders were subject to the outcome of Show Cause Notices issued on the issue of non-inclusion of freight in the assessable value for the purposes of payment of duty; and (ii) The Adjudicating Authority vide the impugned Order, found that the first three claims were filed on 27.10.2017 after one year of the date of finalization of the provisional assessment and rejected the refund claims on the ground of unjust enrichment as well. he also held that the refund claims were also inadmissible, as the Show Cause Notices issued on the issue of the non inclusion of freight in the assessable value, have been confirmed by....
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....ad received only reduced prices to the extent of discounts allowed by credit notes and when the credit notes are given, every element of price including duty gets proportionately reduced. 4.3.2 I find that Section 11B (2) of the Act provides, as under: ...... 4.3.3 Further, I find that the Hon'ble Supreme Court in the case of CCE, madras vs Addison & Co ltd. [2016 (339) ELT 177 (SC)] interalia, held, as under: .... 4.3.4 The aforesaid decision of the Hon'ble Supreme Court was also affirmed by the Hon'ble Supreme Court vide order dated 27.04.2017 reported as Addison and Co Ltd. vs Commissioner {2017 (353) ELT A 64 (SC)]. 4.4 In this case, it is observed that the appellant have failed to show that incidence of duty had not been passed on to consumers. Since the dealers/ stockists/ consignment agents are not the ultimate consumers and the duty component initially passed onto the them, was further passed on by them, to ultimate consumers, I therefore, find that refund of such duty on the plea taht such duty returned back by issuing credit notes subsequent to clearance of goods, is hit by bar of unjust enrichment, in ligh....
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....ly and the amount shall be credited to the Fund.' Provided that the amount of duty of excise as determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to- (a) ... (b) ... (c) ... (d) ... (e) the duty of excise and interest, if any, paid on such duty borne by the interest, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person. (f) ...... ........ Explanation: For the purpose of this section,- (A) .... (B) "relevant date" means,- (a) ... (b) ... (c) ... (d) ... (e) ... (ea) .... (eb) in case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof. (ec) .... (f) ... In terms of (eb) to the explanation under Section 11B, the relevant date is not the date of finalizat....
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....ut 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, leaves India, or (ii) if the goods are exported by land, the date on which such goods pass the frontier, or (iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India; (b) in the case of goods returned for being remade, refined, reconditioned, or subjected to any other similar process, in any factory, the date of entry into the factory for the purposes aforesaid; (c) in the case of goods to which banderols are required to be affixed if removed for home consumption but not so required which exported outside India, if returned to a factory after having been removed from such factory for export out....
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....necessary to make further enquiry (including the inquiry to satisfy himself about the due observance of the conditions imposed in respect of the goods after their removal) for assessing the duty, the proper officer may, either on a written request made by the assessee or on his own accord, direct that the duty leviable on such goods shall, pending the production of such documents or furnishing of such information or completion of such test or enquiry, be assessed provisionally at such rate or such value (which may not necessarily be the rate or price declared by the assessee) as may be indicated by him, if such assessee executes a bond in the proper form with such surety or sufficient security in such amount, or under such conditions as the proper officer deems fit, binding himself for payment of the difference between the amount of duty as provisionally assessed and as finally assessed. (2) ..... (3) The Collector may permit the assessee to enter into a general bond in the proper Form with such surety or sufficient security in such amount or under such conditions as the Collector approves for assessment of any goods provisionally from time to time: ....
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....ermination of the tax liability. Under the Act, duty was payable by the manufacturer on his own account. Hence, under section 11B(1), such a person had to claim refund by making an application within six months from the relevant date except in cases where duty was paid under protest in terms of the proviso. However, even in such cases, the person claiming refund had to pay the duty under protest in terms of prescribed rules. A bare reading of section 11B(1), therefore, shows that it refers to claim for refund as against making of refund by the proper officer under rule 9B. 8. On 20.9.1991, the above section 11B underwent a drastic change vide Central Excises and Customs Laws (Amendment) Act, 40 of 1991 (hereinafter referred to as "the Amendment Act"). By the Amendment Act, the concept of unjust enrichment as undeserved profit was introduced. We reproduce herein below amended section 11B: "Section 11B: Claim for refund of duty. ..... 9. According to statement of objects and reasons for enacting the Amendment Act, the Public Accounts Committee recommended introduction of suitable legislation to amend the said Act to deny refunds in cases of unjust enrichmen....
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....onally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are finally assessed. Sub-rule (5) provides that "when the duty leviable on the goods is assessed finally in accordance with the provisions of these Rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short of or is in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be". Any recoveries or refunds consequent upon the adjustment under sub-rule (5) of Rule 9-B will not be governed by Section 11-A or Section 11-B, as the case may be. However, if the final orders passed under sub-rule (5) are appealed against or questioned in a writ petition or suit, as the case may be, assuming that such a writ or suit is entertained and is allowed/decreed then any refund claim arising as a consequence of the decision in such appeal or such other proceedings, as the case may be, would be governed by Section 11-B. It is also made clear that if an independent refund claim is filed after the final decision under Rule 9-B(5) reagitating....
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.... is the case of the respondent M/s APIL that since such payment was similar to payment under rule 9B, the respondent M/s APIL was not required to comply with section 11B. In the light of the discussion hereinabove, we hold that the respondent was bound to comply with section 11B. Lastly, in any event, the application dated 11.2.1997 fell in the category of refund claim being made after finalization of assessment of NIIL and, therefore, section 11B had to be complied with in terms of para 104 of the above judgment in the case of Mafatlal Industries Ltd. (supra). For above stated reasons, since there was failure to comply with section 11B, the respondent was not entitled to refund. From the perusal of the above it is quite evident that the issue for consideration before the Hon'ble Apex Court was not qua the determination of the relevant date as per explanation to Section 11B, but was in respect of "duty paid under protest, and whether the observation made by the Apex Court in the para 104 of the decision in case of Mafatlal Industries can be made applicable to the duty paid under protest. Thus in our view the reliance placed by the Commissioner (Appeal) on this decision....
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....e of such duty to any other person, or (b) the duty of excise borne by the buyer, if he had not passed on the incidence of such duty to any other person." 4.5 Explaining the above provisions in respect of the refund arising on the account of finalization of assessment in Central Excise Manual issued by CBEC, in Chapter 3 Part IV, at para 2.8 following has been stated: "2.8 Where any refund becomes due to the assessee, order shall be passed for such refund, but disbursement shall be subject to further verification about incidence of such duty. The assessee will be required to submit proof to the Assistant/deputy Commissioner of Central Excise that the duty incidence was borne by him (assessee). If the assessee fails to produce such proof/evidence, the Assistant/deputy Commissioner of Central Excise will pass an order for depositing the amount in Consumer Welfare Fund in the prescribed manner. Otherwise, the refund shall be give along with interest at the rate specified by the Central Government by Notification issued under Section 11BB of the Act from the first day of the month succeeding the month for which such refund is determined, till the date of refund." ....
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.... the refund claims will be hit by the unjust enrichment. The decision of Addison and Company only states that the subsequent issue of the credit notes in the favour of the customers, cannot be an evidence for not passing on the burden of duty at the time of clearance of the goods by the manufacturer. It is not even the case of the appellant that they issued the credit notes to the buyers in respect of the excess duty paid by them for which the refund claim has been filed. They have stated that the fact about not passing on the burden of the excess duty claimed as refund has been certified by the Chartered Accountant. In the case of Addison Company, Hon'ble Supreme Court has observed as follows: " 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. 7906 of 2002. Civil Appeal No. 8488 of 2009 and SLP No. 25055 of 2009 will be dealt with separately as the facts and the point involved are slightly different. Civ....
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.... 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 normally passed by the manufacturer and the dealer to the ultimate consumer. 8. The Assessee filed an application for reference of questions arising out of the final order dated 07.12.1996. The Tribunal referred the following questions for consideration of the High Court by its order dated 28.08.1998, taking note of the fact of the existence of divergent views on the point. "1. Whether by passing on the duty element on the discount to its dealers the applicant had satisfied the requirements of proviso „d‟ to sub Section 11-B (2) of the Central Excise Act, 1944 and was therefore, entitled to be paid the amount claimed as refund? 2. Whether the Tribunal after finding that the burden of duty was passed on by the applicant to its various dealers by ....
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....e. The Additional Solicitor General submitted that any credit note that was raised post clearance will not be taken into account for the purpose of a refund by the Department. We do not agree with the said submission as it was held by this Court in Union of India Vs Bombay Tyre International (supra) that trade discounts shall not be disallowed only because they are not payable at the time of each invoice or deducted from the invoice price. It is the submission of the Assessee that the turnover discount is known to the dealer even at the time of clearance which has also been upheld by this Court. It is clear from the above that the Assessee is entitled for filing a claim for refund on the basis of credit notes raised by him towards turnover discount. 16. In the instant case, the Assessee has admitted that the incidence of duty was originally passed on to the buyer. There is no material brought on record to show that the buyer to whom the incidence of duty was passed on by the Assessee did not pass it on to any other person. There is a statutory presumption under Section 12-B of the Act that the duty has been passed on to the ultimate consumer. It is clear from the facts of ....
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....evenue has filed Special Leave Petitions against the said judgment dated 19.02.2014. Special Leave Petition (C) Nos. 12282, 16141 and 16142 of 2016 were filed by the Revenue against the judgment dated 01.07.2015 of the Division Bench of the Andhra Pradesh High Court which followed its earlier judgment dated 19.02.2014. The issues involved in the above Civil Appeals are similar to that of Civil Appeal No. 7906 of 2002. 28. The Appeals filed by the Revenue are allowed, in terms of the judgment in Civil Appeal No. 7906 of 2002. Civil Appeal No. 14689 of 2015 29. The above Civil Appeal is filed by the Commissioner of Central Excise and Customs challenging the judgment of the Andhra Pradesh High Court in Central Excise Appeal No. 21 of 2004. The Respondent-Assessee manufactures Pesticide formulations which are used as pesticides in agricultural farms. The Pesticides are sold at the factory gate and also through depots. The Assessee submitted an application for refund towards allowable discounts after the removal of goods from the factory. Credit notes were issued by the Assessee in favour of the buyers towards trade discounts which also contained a component of the exc....
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....e the debit notes were raised by the owners of the fabric. As the duty paid at 8.8 per cent was passed on by the owner of the fabric to the ultimate consumer the processor was not entitled for a refund. 32. The Assessee approached the Commissioner Appeals, II Customs & Central Excise, Jaipur by filing an appeal which was rejected by an order dated 27.02.2003. The Central Excise and Service Tax Appellate Tribunal by its order dated 11.05.2005 allowed the appeal filed by the Assessee on the ground that the incidence of duty was not passed on by the Assessee to the customers. The customers protested to the charging of the net duty payable at 8.8 per cent instead of 8 per cent in spite of the notification issued on 11.06.2001. This protest was made without any delay so the question of passing the incidence of duty by the owners of the fabric to their customers does not arise. 33. In Central Excise Appeal No. 34 of 2005 filed by the Union of India through Commissioner of Central Excise, Jaipur, the High Court of Judicature for Rajasthan at Jodhpur confirmed the order of the Central Excise and Service Tax Appellate Tribunal. Challenging the said judgment of the High Cou....
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.... appeal filed by the Assessee by taking note of the certificate issued by the Chartered Accountant and the credit notes dated 29.07.2002. The Appellate Authority accepted the Assessee‟s contentions and held that there was no reason to doubt the genuineness of the documents produced. The Appellate Authority allowed the appeal of the Assessee and the said order was confirmed by the Central Excise and Service Tax Appellate Tribunal vide judgment and order dated 06.10.2005. The said order of Central Excise and Service Tax Appellate Tribunal was further confirmed by the High Court of Judicature at Bombay in Central Excise Appeal No. 100 of 2008 filed by the Revenue. The Revenue has filed the above Civil Appeal challenging the validity of the judgment of the High Court in Central Excise Appeal No. 100 of 2008. 36. Except for a factual dispute about the genuineness of the certificate issued by the Chartered Accountant and the credit notes raised by the Assessee regarding the return of the excess duty paid by the Assessee, there is no dispute in this case of the duty being passed on to any other person by the buyer. As it is clear that the Assessee has borne the burden of du....
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....of the party for provisional assessment was found to be genuine and has been accepted. According, Provisional Assessment Order was issued vide this office C No. VI/Prov. Ass/HIL/58/2014 dated 20.02.2015. For the period 01.01.2015 to 31.03.2015, subject to furnishing of bond for an amount of Rs 18,00,000/- (Rs. Eighteen Lakh) and bank guarantee of Rs 4,50,000/-. The party vide letter C No EX/Bond/HIL/820/12-13 dated 28.07.2012 has submitted duly executed B2 Bond (executed on 28.07.2012) for Rs 18,00,000/- (Rs Eighteen Lakh) along with bank Guarantee for Rs 4,50,000/- only which was renewed by the party up to 24.07.2015, as intimated vide their letter C No EX/Bond/HIL/820/Jul-Sep/14-15 dated 25.02.2015 to safeguard the differential duty in respect of clearances during the period of Provisional Assessment from 01.01.2015 to 31.03.2015. The party's request for the acceptance of above mentioned bond and bank guarantee was accepted. 6. In this regard, I observe that the assessment of the period under reference i.e. 01.01.2015 to 31.03.2015 is to be finalized as per provisions of Rule 2 (b) and Rule 7 of Central Excise valuation (Determination of Price of Excisable Goods) Rul....
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....000 as mentioned above. It would be pertinent to mention have that on scrutiny of the documents as submitted by the party it was found that no element of freight was mentioned consequently party was asked to clarify the same vide letter C No VI/Prov. Ass/HIL/58/2014/1325-1326 dated 01.07.2015. In this context party replied vide its letter dated 14.07.2015 that "In the above context, this is to inform you that the prices of our various products have been equalized so that the transaction value remains the same whether sale is affected at the factory gate of the depots. Amount of freight has been completely subsumed in the transaction value so that it does not affect the sale value. Under these circumstance rule 5 of the Central Excise Valuation". The fact stated therein were different from the facts stated in the provisional assessment requested letter dated 26.12.2014. Thus again a letter dated 18.09.2015 was sent to the party to elaborate the issue. Again the party replied wherein it stated Äs stated in our previous letter dated 14.07.2015 the element of freight is now no factor influencing transaction price of our various products. Therefore our prayer for allowing provision....
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....; Grand Total 819,26,883.0 0 839,71,024.0 0 - 20,44,141. 00 Adjudication No 29/Final Assesment/2015 dated 20.11.2015 Apr- 15 FACTORY GATE SALE 17,845. 47 1891,20,637. 25 1891,20,637. 25 41,40,113.7 8 1849,80,523. 00 FACTORY TO DEPOT 7,147.2 8 756,83,963.4 6 807,63,469.4 3 22,65,896.8 9 784,97,573.0 0 TOTAL 24,992. 75 2648,04,600. 71 2698,84,106. 68 64,06,010.6 7 2634,78,096. 00 329,34,762.0 0 331,00,579.0 0 - 1,65,817.0 0 May- 15 FACTORY GATE SALE 19,906. 92 2150,15,434. 36 2150,15,434. 36 14,39,588.4 4 2135,75,846. 00 FACTORY TO DEPOT 6,382.3 8 676,05,731.5 7 709,43,806.6 0 43,30,616.0 0 666,13,191.0 0 TOTAL 26,289. 30 2826,21,165. 93 2859,59,240. 96 57,70,204.4 4 2801,89,037. 00 350,23,630.0 0 353,27,650.0 0 - 3,04,020.0 0 Jun- 15 FACTOR....
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....86,871.1 1 568,18,220.4 0 FACTORY TO DEPOT 2,750.4 6 286,65,154.5 3 296,38,963.6 3 15,82,296.8 9 280,56,666.7 4 TOTAL 8,424.2 4 875,70,246.0 4 885,44,055.1 4 36,69,168.0 0 848,74,887.1 4 106,09,361.0 0 109,46,283.0 0 - 3,36,922.0 0 Nov- 15 FACTORY GATE SALE 6,078.5 7 611,72,084.1 0 611,72,084.1 0 10,42,490.6 7 601,29,593.4 3 FACTORY TO DEPOT 4,690.4 0 507,46,487.5 1 518,46,718.7 0 9,01,479.11 509,45,239.5 9 TOTAL 10,768. 97 1119,18,571. 61 1130,18,802. 80 19,43,969.7 8 1110,74,833. 02 138,84,354.0 0 139,89,823.0 0 - 1,05,469.0 0 Dec- 15 FACTORY GATE SALE 9,184.1 1 945,20,006.9 4 945,20,006.9 4 79,21,613.3 3 865,98,393.6 1 FACTORY TO DEPOT 7,079.3 8 773,43,501.1 8 779,53,532.1 7 57,02,456.0 0 722,51,076.1 7 TOTAL 16,263. 49 1718,63,508. 12 1724,73,539. 11 13....
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....p; Mar- 16 FACTORY GATE SALE 16,726. 56 1734,78,528. 00 1734,78,528. 00 96,76,027.0 0 1638,02,501. 00 FACTORY TO DEPOT 9,122.9 7 985,05,869.0 0 1047,41,881. 00 49,79,334.0 0 997,62,547.0 0 TOTAL 25,849. 53 2719,84,397. 00 2782,20,409. 00 146,55,361. 00 2635,65,048. 00 329,45,631.0 0 339,98,055.0 0 - 10,52,424. 00 Jun- 16 FACTORY GATE SALE 19,942. 71 2024,19,055. 00 2024,19,055. 00 95,68,855.0 0 1928,50,200. 00 FACTORY TO DEPOT 10,506. 02 1113,58,650. 00 1164,05,995. 00 61,54,468.0 0 1102,51,527. 00 TOTAL 30,448. 73 3137,77,705. 00 3188,25,050. 00 157,23,323. 00 3031,01,727. 00 378,87,716.0 0 392,22,220.0 0 - 13,34,504. 00 Grand Total 922,09,845.0 0 955,58,305.0 0 - 33,48,460. 00 4.11 From the perusal of the order specifically the charts attached it is evident that the duty has been determined on t....
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.... records maintained by m/s HIL limited Sathariya (Hereinafter referred as M/s HIL) and invoices raised by them by their depots and consignment agents during the period from January-2015 to July 2016 and find that they have sold corrugated sheets and moulded sheets consisting of asbestos and cement manufactured by them at their factory gate, as well as from their various depots and through consignment agents. They resorted to provisional assessment under express permission from Assistant Commissioner/ Deputy Commissioner. From the sale we found that: (i) they have sold the excisable goods to buyers at factory gate and issued central excise invoices showing therein the price of goods, Excise duty payable thereon and shown element of freight charged separately. The Commissioner of Central Excise issued show cause notice No 35/Commissioner/ Alld/2015 dated 01.09.2015on the ground that freight element shown separately form part of transaction value in respect of invoices issued during the period from August 2014 to June 2015 and the goods sold from the factory gate. Four more show cause notices dated 12.03.2013, 15.10.2013 27.08.2014 and 14.07.2016 were also issued on the same ....