21 - Refund

No. In the case of Jaipur Syntex Ltd. [2002 (4) TMI 113 - CEGAT, NEW DELHI], it was held that the argument of the learned JDR that since in invoices, the composite duty inclusive of excise duty, had been shown, a presumption deserves to be drawn that incidence of duty had been passed on to the customers, by the appellants, cannot be accepted in view of the ratio of law laid down in the case of Metro Tyres Ltd. [1993 (4) TMI 177 - CEGAT, NEW DELHI]  which is validated even by the Apex court. 

In the case of Metro Tyres Ltd., it was held that the contention of the Department, however, was that in the price list these prices were shown by the appellants as inclusive of the excise duty and, therefore, it has to be concluded that the company added the excise duty. Accepting the contention of the manufacturing company and rejecting the contention of the revenue the Court observed that on the admitted position that the company did not change the price which it was charging to its retail consumers prior to 1961, it was clear that there was no element of excise duty added to the price after the excise duty came to be levied in 1961. The fact that in the price list, the price was stated to be inclusive of the excise duty did not necessarily mean that any particular amount was added to the original price so as to make a provision for the additional burden of the excise duty. We must remember the fact that the Explanation will come into the picture only where `the element of excise duty, if any’ is added to the price of any of the medicines. The department has not been able to show and indeed it is impossible for them to show that any element of excise duty has been added to the price of any medicines. The very fact that the price of the medicines continues to be the same as it was before the excise duty was levied, clearly indicates that no element of excise duty is added to the price of the medicinal ointment.

Inclusive pricing does not establish passing on of tax burden; composite invoices alone do not prove unjust enrichment. Showing a composite price on an invoice does not, by itself, establish that the supplier passed the tax burden to customers or realized unjust enrichment; where prices remained unchanged after a tax was imposed, inclusive pricing alone is insufficient evidence that any element of tax was added to the price, and proof of an added tax component is required to infer passing on of the tax.