TaxTMI 
TaxTMI 
2025 (1) TMI 337
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....entral Excise Act for the reason that the refund claim related to excess payment of excise duty on 1015 MJ Battery-AA R6/1.5V-Packed: Special Promotional Pack:2U(Pcs) free with select Eveready CFLs from their factory. 2.3 The said refund claim was verified and range superintendent submitted that refund would not be admissible to the appellant. A show cause notice dated 30.11.2012 was issued to the appellant asking them to show cause as to why the refund claim filed by them for Rs.15,31,742/- should not be rejected. 2.4 Assistant Commissioner vide Order-in-Original dated 31.12.2012 rejected the refund claim both on merits and also on the ground of unjust enrichment. 2.5 Aggrieved appellant have filed appeal before Commissioner (Appeals), which has been dismissed as per the impugned order. Aggrieved appellant have filed this appeal. 3.1 We have heard Shri Dhruv Tiwari learned Counsel appearing for the appellant and Shri A.K. Choudhary learned Authorized Representative appearing for the revenue. 3.2 Arguing for the appellant learned Counsel submits that- The issue is no longer res-integra, goods which are supplied free of cost (FOC) are not meant for retail sal....
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....f Central Excise Duty which, the appellant have submitted, has arisen on account of excess payment of such duty made due to wrong valuation of goods as per the provisions of Section 4A of the Central Excise Act, 1944 on the basis of Maximum Retail Price (hereinafter referred to as MRP whereas they instead should have determined the value under Rule 8 & 11 of the Central Excise Valuation (Determination of Price of Excisable Goods), Rules 2000 ie., on the basis of production cost of the goods as calculated by CAS-4 method. 5.3 The adjudicating authority vide their impugned order have rejected the appellants refund claim mainly on the ground given below : (i) The price of CFLs include the price of the goods in question ie. batteries supplied FOC. Moreover, as the party has supplied the said goods to "Eveready Industries India Ltd." situated at different location, to be supplied with the promotional sale of their CFLs, by no stretch of imagination, it can be termed as institutional sale not involving retail sale or not meant for retail sale. (ii) If any of the goods is required to print MRP under the Legal Metrology Act, 2009 or the rules made there under, th....
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....r both of these two goods and it is not the case that they do not pay any amount at all. Thus there is an element of sale in this transaction. (vii) Every appellant has to pass through the acid test prescribed for claiming the refund of excise duty under Section 11 B of the Act. It is a fact that no manufacturer will sell the goods at a loss and the amount spent on FOC goods being for promotion of CFLs is actually attributable towards marketing/advertisement charges. Since they did not provide copies of the invoice issued from their depot, their claim of not passing of duty is not sustainable It is the assessee who has to prove, before claiming the refund of the duty that he has not passed on the burden of duty to the customers. As the assessee have received duty element from the combined value of the goods supplied which is equal to value of CFL s sold from the customers, as provided under section 12A of the said Act, they appear to have failed to cross the hurdle provided by Section 11 AB of the Act. In this case they appear to have reduced their margin of profit to compete in the market or have booked the price of FOC goods towards marketing/advertisin....
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....y had not been passed on by him to any other person.' Although the appellants have submitted the invoices issued by them under Rule 11 of Central Excise Rules, 2002 relating to the 'stock transfer to Eveready Industries India Ltd., Lucknow to substantiate the payment of Central Excise Duty by them, they haven't submitted any invoice issued from this location to the retail customer so as to refute the allegation of unjust enrichment. They have indeed submitted few Tax Invoice in respect of sale to retail customer but these invoice relate either to 'Pune Sales Godown' or 'Cuttack Sales Godown' or at other is in respect of 'Dankuni Sales Godown, Hooghly. 6.2 The provisions of Section 128 of the Central Excise Act, 1944 also become relevant which reads as follows: "Every person who has paid the duty of excise on any goods under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such duty to the buyer of such goods." As it is, as per the above provisions the onus is squarely upon the appellants who are to prove, before claiming the refund of the duty, that they have n....
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....such is required to be reprocessed and if that is not possible, then it is rejected and has to be re-pulped and recycled. 8. The appellant had been paying duty on paper cleared from its factory. The rate of duty of paper manufactured from conventional and unconventional raw material differed. The appellants availed exemption under Notification No. 67/95-C.E., dated March 16, 1995 as to the duty in respect of waste paper/fresh broke. By Notification No. 6/2000-C.E., dated March 1, 2000 complete exemption was granted in respect of paper up to the specified quantitative limit manufactured from unconventional raw materials. Upon receipt of a letter dated March 30, 2001 from the Superintendent of Central Excise, the Appellant examined the matter and realized the mistake committed by it in availing the exemption under Notification No. 67/95-C.E. in respect of waste paper/broke utilized in the manufacture of paper cleared at "nil" rate of duty under Notification No. 6/2000-C.E. From May 2001 onwards, the appellant stopped availing the exemption and started payment of duty on waste paper/broke. 9. The relevant period involved in the appeal i.e. July 2001 to March 2002. Th....
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.... order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing its order. If this position is accepted then the provisions for adjudication in the Act and the Rules, the provision for appeal in the Act and the Rules will lose their relevance and the entire exercise will be rendered redundant. This position, in our view, will run counter to the scheme of the Act and will introduce an element of uncertainty in the entire process of levy and collection of excise duty. Such a position cannot be countenanced. The view was taken by us also gains support from the provision in sub-rule (3) of Rule 11 wherein it is laid down that whereas a result of any order passed in appeal or revision under the Act, refund of any duty becomes due to any person, the proper officer may refund the amount to such person without his having to make any claim in that behalf. The provision indicates the importance attached to an order of the appellate or revisional authority under the Act. Therefore, if an order which is appealable under the Act is not challenged then the order is not liable to be questioned and the m....
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.... nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise. 42. It was contended that no appeal lies against the order of self-assessment. The provisions of Section 128 deal with appeals to the Commissioner (Appeals). Any person aggrieved by any decision or order may appeal to the Commissioner (Appeals) within 60 days. There is a provision for condonation of delay for another 30 days. The provisions of Section 128 are extracted hereunder : "128. Appeals to [Commissioner (Appeals)]. - (1) Any person aggrieved by any decision or order passed under this Act by an officer of customs lower in rank than a [Principal Commissioner of Customs or Commissioner of Customs] may appeal to the [Commissioner (Appeals)] [within sixty days] from the date of the communication to him of such decision or order : [Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a furt....
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....cation. Existence of those exigencies is also to be proved which cannot be adjudicated within the scope of provisions as to refund. While processing a refund application, re- assessment is not permitted nor conditions of exemption can be adjudicated. Re-assessment is permitted only under Section 17(3)(4) and (5) of the amended provisions. Similar was the position prior to the amendment. It will virtually amount to an order of assessment or re-assessment in case the Assistant Commissioner or Deputy Commissioner of Customs while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under Section 27. In Hero Cycles Ltd. v. Union of India - 2009 (240) E.L.T. 490 (Bom.) though the High Court interfered to direct the entertainment of refund application of the duty paid under the mistake of law. However, it was observed that amendment to the original order of assessment is necessary as the relief for a refund of claim is not available as held by this Court in Priya Blue Industries Ltd. (supra)." 4.4 Nothing has been brought on record to show that the self assessment made by the appellant at the time of ....
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.... "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 12B of the Act that the duty has been passed on to the ultimate consumer. It is clear from the facts of the instant case that the duty which was originally paid by the Assessee was passed on. The refund claimed by the Assessee is for an amount which is part of the excise duty paid earlier and passed on. The Assessee who did not bear the burden of the duty, though entitled to claim deduction, is not entitled for a refund as he would be unjustly enriched. It will be useful to refer to the relevant para of Mafatlal Industries v. Union of India (supra) in this connection. "108. (iii) A claim for refund, whether made under the provisions of the Act as contemplated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes ....
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....ed in Clause (f) to proviso to Section 11B(2) of the Act. He contested that the claim for refund can be made only by the manufacturer or his buyer and any enquiry pertaining to unjust enrichment should be restricted only to the manufacturer and his buyer. The ultimate buyer/consumer will not figure in the scheme of Sections 11B, 12A, 12B and 12C of the Act. This submission was accepted by the High Court in the impugned judgment. We do not approve the findings of the High Court in this regard. 19. The sine qua non for a claim for refund as contemplated in Section 11B of the Act is that the claimant has to establish that the amount of duty of excise in relation to which such refund is claimed was paid by him and that the incidence of such duty has not been passed on by him to any other person. Section 11B(2) provides that, in case it is found that a part of duty of excise paid is refundable, the amount shall be credited to the fund. Section 2(ee) defines Fund to mean the Consumer Welfare Fund established under Section 12C. There is a proviso to Section 11B(2) which postulates that the amount of excise duty which is refundable may be paid to the applicant instead of being cre....
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....e amounts to those entitled thereto", intoned Shri Nariman. It is a colourable device - declaimed Shri Sorabjee - "a dirty trick" and "a shabby thing". The reply of Shri Parasaran to this criticism runs thus : It ill-becomes the manufacturers/Assessees to espouse the cause of consumers, when all the while they had been making a killing at their expense. No consumers" organisation had come forward to voice any grievance against the said provisions. Clause (e) of the proviso to sub-section (2) of Section 11B does provide for the buyer of the goods, to whom the burden of duty has been passed on, to apply for refund of duty to him, provided that he has not in his turn passed on the duty to others. It is, therefore, not correct to suggest that the Act does not provide for refund of duty to the person who has actually borne the burden. There is no vice in the relevant provisions of the Act. Rules cannot be relied upon to impugn the validity of an enactment, which must stand or fall on its own strength. The defect in the Rules, assuming that there is any, can always be corrected if the experience warrants it. The Court too may indicate the modifications needed in the Rules. The Government....
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....asers. This practical inconvenience or hardship, as it is called, cannot be a ground for holding that the provisions introduced by the 1991 (Amendment) Act are a "device" or a "ruse" to retain the taxes collected illegally and to invalidate them on that ground - assuming that such an argument is permissible in the case of a taxing enactment made by Parliament. (See R.K. Garg [(1981) 4 SCC 675 : 1982 SCC (Tax) 30 : AIR 1981 SC 2138] and other decisions cited in paras 87 and 88.)" 21. That a consumer can make an application for refund is clear from paras 98 and 99 of the judgment of this Court in Mafatlal Industries (supra). We are bound by the said findings of a Larger Bench of this Court. The word "buyer" in Clause (e) to proviso to Section 11B(2) of the Act cannot be restricted to the first buyer from the manufacturer. Another submission which remains to be considered is the requirement of verification to be done for the purpose of finding out who ultimately bore the burden of excise duty. It might be difficult to identify who had actually borne the burden but such verification would definitely assist the Revenue in finding out whether the manufacturer or buyer who makes ....
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....resented only 1.62% of the total price. It was argued that resale price charged by M/s. AGIL to its dealers had no relevance to excess excise duty paid by M/s. AGIL to NIIL at the time of purchase as the sale price charged by M/s. AGIL to its dealers was based on the prevailing market price. We do not find any merit in this argument. In the present case, the refund claim is made by a buyer and not by the manufacturer. The buyer says that he has not passed on the burden to its dealers. The buyer has bought the goods from the manufacturer paying the purchase price which included cost of purchase plus taxes and duties on the date of purchase. In such cases, cost of purchase to the buyer is a relevant factor. None of the authorities below have looked into this aspect. Even the Appellate Tribunal has not gone into this relevant factor. It has merely quoted the passages from the order of the lower authority, whose order was impugned before it. Costing of the goods in the hands of the distributor, the cost element and the treatment given to purchases by the buyer in his own account were relevant circumstances which the authorities below failed to examine. It was submitted that cost of pur....