TaxTMI 
TaxTMI 
2024 (4) TMI 859
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....tha, Herbal Sat, Neem Sat, Meghdoot Herbal Powder, Hring Raj Tail, and Triphla Brahmi Tail. On 16.04.1994, the Appellant declared the abovementioned products under Chapter sub-heading 3003.03 of the Central Excise Tariff Act 1985. 2.2 As the revenue was of the view that the products would be appropriately be classifiable under Chapter Heading 3305 instead of 3003. Accordingly, a show cause notice was issued and Commissioner, Central Excise, Lucknow adjudicated the case under Order-in-Original No. 9/99 dated 29.10.1999, holding the goods to be classifiable under heading 3305. 2.3 Tribunal vide Final Order No. 44-46/CE dated 28.01.2003 allowed the appeal filed by the appellant on limitation, leaving the issue of classification unsettled. An appeal was filed by the Appellant before the Hon'ble Supreme Court. Hon'ble Apex Court vide its Order dated 08.10.2004 in Civil Appeal No. 7445 of 2003 held that the products are classifiable under Chapter Heading 3003.30 2.4 During the pendency of this appeal before the Hon'ble Supreme Court, upon the insistence of the Department, the Appellant deposited an amount of Rs. 5,51,739/- under protest for different periods. 2.5 Subsequent to the de....
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....nt of CED Price after 16% Central Excise Duty and 9.25% State Sales Tax 1. 56,600 40% 33,960 2. 56,600 52.1% 27,111.4 4,337.80 33957 or 33960 * As per Section 12(B) of the Act, it is the duty of the Appellant to prove that he has not passed the excise duty to the buyer. * They placed certain documents by way of supplementary affidavit and on the basis of the same it is submitted that the same was on record of the Revenue and from the same it is crystal clear that the Appellant has not passed on the excise duty to the buyers. * Thus they absorbed the duty, and the incidence of tax was not passed to the customers thereby making them eligible for refund. * Despite above the letters informing the dealers, the Appellate authority in para 12 gave a finding that the Appellant neither informed their buyers regarding duty absorption nor they have shown conclusively that the duty burden was effectively absorbed by them. * Even the fact that the Appellant increased the discount as was shown on the invoices and the fact that the letters were written by the Appellant to the customers was never disputed by the department by producing any contrary eviden....
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....erates the findings recorded in the impugned order. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 Hon'ble High Court has while remanding the matter back to tribunal for reconsideration has observed as follows: "It appears from the record that during the pendency of the appeal, the application for amendment (C.M. Application No. 60609 of 2019) was preferred and the same was allowed by this Court vide order dated 14.05.2019 and pursuant to the same, the amendment was incorporated by adding sixth substantial question of law. The questions of law mentioned in the memo of appeal, after amendment, read as under:- "1. Whether or not the bar of unjust enrichment will be attracted in a case where duty was paid under protest and specific letters were written to the dealers explaining the reasons of deduction/discounts? 2. Whether the learned Tribunal was justified in relying upon the case of C.C.E. v. Allied Photographics India Ltd., (2004) 4 SCC, 34 and ignoring the principles of law laid down in C.C.E. v. Panhihati Rubber Ltd. (2006) 10 SCC 129 and Auro Lab v. C.C.E. Madurai, 2005 (185) E.L.T. 88 (Tri.-....
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....und claimed by them. In fact, the refund has been sanctioned and credited to the Consumer Welfare Fund. The letters addressed to the dealers (according to the learned Consultant they are representative in nature) show that as if consequent to payment of duty the appellants were absorbing the burden of duty and the prices remained the same as it was prior to the period when the duty was not being paid. Provocation for issue of such letters is not furnished. There is no reference in the said letters of any resistance of the buyers to buy the goods with the element of duty. After all, the central excise duty is an indirect tax and the role of the manufacturer and the dealer down the chain of sale is to pass on the burden to the ultimate consumer. No evidence whatsoever has been produced that there was any such stiff resistance from the consumers and the dealers which resulted in increasing the discount to upset the duty element and that the same resulted in absorption of the duty burden by the appellant themselves. Mere submission that in view of stiff competition in the market they were forced to absorb the duty burden is not sufficient proof that the appellant did not pass on the du....
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.... the 'judgment' means a decision adjudicating upon the legal rights and liabilities of the parties after appreciating the evidence on record in a particular fact-situation, and that has to be duly supported by reasons. The Apex Court in the judgment passed in Civil Appeal Nos.3448- 3449 of 2019 (Kushuma Devi v. Sheopati Devi (D) & Ors.) observed as under:- "9. This Court has consistently laid down that every judicial or/and quasi-judicial order passed by the Court/Tribunal/Authority concerned, which decides the lis between the parties, must be supported with the reasons in support of its conclusion. The parties to the lis and so also the appellate/revisionary Court while examining the correctness of the order are entitled to know as to on which basis, a particular conclusion is arrived at in the order. In the absence of any discussion, the reasons and the findings on the submissions urged, it is not possible to know as to what led the Court/Tribunal/Authority for reaching to such conclusion. (See State of Maharashtra vs. Vithal Rao Pritirao Chawan, (1981) 4 SCC 129, Jawahar Lal Singh vs. Naresh Singh & Ors., (1987) 2 SCC 222, State of U.P. vs. Battan & Ors., (2001) 10 SC....
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....d on to buyers or not, is a question of fact and findings of fact arrived at by CESTAT is ordinarily to be accepted by the Supreme Court. Thus, the important issue here is as to whether the appellants have properly justified their claim on the fact that the burden of duty has not been passed on to the buyers. 11. I note that the Ld. adjudicating authority has observed in para 10 of the order that the set of invoices submitted with the refund claims are thoroughly scrutinized. The invoices issued between 11.09.2003 to 30.01.2004 clearly show the Central Excise duty @ 16% separately which is included in the price of the goods charged from the customers. This proves that the Central Excise duty has been collected from the customers, therefore, the incidence of duty has been passed on to others. Further, in para 11, the adjudicating authority has observed that "though the Central Excise duty is not shown in another set of invoices pertaining to the period from 01.07 2003 to 10.09.2003 and from 01.02.2004 to 30.04.2004, the chart enclosed indicates the Central Excise duty separately which is included in the net bill amount as shown in the invoices. Obviously, Central Excise duty shown....
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....early show the Central Excise duty @16 % separately which is included in the price of the goods charged from the customers. This proves that Central Excise duty has been collected from the customers therefore, the incidence of duty has been passed on to others. 11. Though Central Excise duty is not shown in another set of invoices pertaining to the period from 01.07.03 to 10.09.03 and from 01.02.04 to 30.04.04, the chart enclosed indicates the Central Excise duty separately which is included in the net bill amount as shown in the invoices. Obviously, Central Excise duty shown separately were collected from the customers. 12. Party's contention, that despite the duty element shown separately in invoices, the incidence was absorbed by them as the prices of their products remain constant before and after the payment of duty, does not hold much ground. It is a settled law that uniformity in prices during the period of Excise duty and other periods, does not lead to inevitable conclusion that the incidence of duty was not passed on to buyers. (Apex Court's judgment in case of CCE Vs Allied Photographics India Limited-(2004 (166) ELT 3(SC)). 13. In case of Auro Lab Vs Commissioner ....
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....n these letters that they are charging the duty from their customers. 4.9 Appellant had also written letter dated 05.08.2003 to the jurisdictional Assistant Commissioner as follows: From the above letter also it is evident that the said letter is totally silent in respect of passing the burden of duty on to the buyers. Further this letter is only in respect of payment of certain duties under protest for the period April to July 2003. We are not concerned with that period in the present proceedings. Hence we do not find any merits in the submissions made by the appellant on the basis of these two letters that they had informed the department and their customers about bearing the burden of the duty being paid by them. 4.10 Appellant have along with the supplementary affidavit filed by them before Hon'ble High Court filed the copies of following invoices issued by them during the period for which they were claiming the refund. The scanned copies of the invoices are reproduced below: 4.11 We note that except for one invoice which is in name of M/s Kaushalya Enterprises, all other invoices have been made in the name M/s Meghdoot Village Products Pvt Ltd., B N Road Lucknow. In some o....
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....The suggestion is that the manufacturer may have to forego not only his profit but also part of excise duty and that in such a case levy and collection of full excise duty would cease to be a duty of excise; it will become a tax on income or on business. We are unable to appreciate this argument. Ordinarily, no manufacturer will sell his products 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....
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....ate, Indian market was by and large a sellers' market." 4.13 From the table in para 4.11, it is quite evident that appellant had on the invoices 131, 137, 157,227 and 276 paid the duty @ 16% on assessable value of Rs 38.80. Thus making the cum duty price of Rs 45.01. On the invoices 78,82,95 & 99 they have paid Nil duty on assessable value of Rs 48.60, so the cum duty price would be Rs 48.60. The fact that the cum duty price on the invoices 131, 137, 157, 227 and 276 is less than that on invoices 78, 82, 95 & 99 is clearly pointing to the fact that the appellant had been throughout collecting the excise duty which was paid from their customer. In case of invoices 78, 82, 95 & 99, since the duty payable has been indicated as nil, the determination of assessable value by the appellant on the invoice would not cause any material difference. Appellant have argued that they had increased the discount percentage on the goods so that the burden of duty is not passed on. However this argument though attractive is without any merits. From the table in para 4.11 it is evident that for determination of the assessable value they have claimed deduction of 40% or 52.10% whereas the price of the....
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....cifically raised before the Tribunal and the finding that of such plea was raised, is a correct finding. The contention of the appellant is that specific issue was raised regarding unjust enrichment by saying that when no change has been taken place in the price structure, it cannot be said that the incidence of duty has been passed on to their customers. The contention is that in the invoices, the consolidated price has been mentioned during the period when the appellants are paying higher rate of duty and same price is mentioned the month where they were paying less duty. The applicants are also relied upon the decision of the Tribunal in the case of Cimmco Ltd. v. CCE, Jaipur reported in 1999 (107) E.L.T. 246 which was followed by the Tribunal in the case of Panihati Rubber Ltd. v. CCE, Calcutta-II reported in 2001 (127) E.L.T. 742. The contention is that when the price of the goods remains same during the period, the manufacturer paid higher duty and the period where they are paying no duty, the manufacturer was taking the burden and not passing on to their customers. 6. We find that Hon'ble Supreme Court in the order while dismissing the appeal observed that the appellants a....
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....no merit in these applications, the same are dismissed." 4.17 In case of Interach Building Products (P) Ltd [2005 (184) E.L.T. 154 (Tri. - Del.)] Delhi bench held as follows: (Maintained by Hon'ble Supreme Court as reported at [2006 (193) E.L.T. A143 (S.C.)] "7. This very principle of law has been followed and applied by the Tribunal in the case of JCT v. Commissioner [2004 (163) E.L.T. 467] wherein it has been observed that keeping of prices stable even after payment of duty by the assessee, would not lead to an irresistible conclusion that he himself had borne the duty burden and not passed on to the consumers. Therefore, simply because the appellants in the present case, did not bring any change in price, it is difficult to conclude that they had not passed on the duty to the consumers. It is hard to accept that they sold the goods at a lesser price or cost incurred by them in the manufacture of the same. Rather it can be reasonably inferred that they brought down their profit margin and kept the price stable in order to compete in the market for marketing their goods. No details as to what was the profit margin of the appellants before payment of duty by them and thereafter ....