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2012 (5) TMI 247 - AT - Central ExciseRefund - unjust enrichment - entry by debit note / credit note Held that - merely because the buyers of the respondent had issued the debit notes and had made reference to debit notes in their ledger books that itself cannot be sufficient to say that the respondent had discharged their burden in that regard. The appellants, therefore, are justified in contending that consequent on the failure on the part of the respondent to establish the duty incident has not been passed over to the customers, the authorities below erred in dropping the proceedings. - Decided against the assessee.
Issues:
Challenge to impugned order based on duty element passed to customers. Analysis: The appeal before the Appellate Tribunal arose from an order passed by the Commissioner (Appeals), Ludhiana, where the appeal filed by the appellants against the order of the Adjudicating Authority was dismissed. The Deputy Commissioner, Ludhiana, had initially dropped the proceedings and ordered a refund based on certain claims made by the appellants. The challenge to the impugned order was primarily on the ground that the duty element was passed on to customers, which the respondent failed to establish. The Departmental Representative contended that the invoices issued to buyers included the duty element, which was later claimed to have been recovered through debit notes, a procedure deemed impermissible by the Department. Upon examining the impugned order and the order of the Adjudicating Authority, it was evident that the duty element was included in the price of the goods cleared on the invoices to buyers, a fact not disputed by the respondent. The respondent's argument was centered around the issuance of debit notes by buyers after payment was received, indicating the duty element had been accounted for. However, the Tribunal's decision in a similar case highlighted the requirement for refund claims under specific sections of the Central Excises & Salt Act, emphasizing that duty incidence should not have been passed on to any other person for a refund claim to be valid. The Tribunal's decision in previous cases, including the dismissal of appeals by the Apex Court, established the principle that issuing credit or debit notes after collecting duty incidents at the time of sale does not absolve the burden of proving non-passing of duty to customers. The failure of the respondent to demonstrate that duty incidence was not transferred to customers led to the conclusion that the authorities erred in dropping the proceedings. Consequently, the impugned order and the Adjudicating Authority's order were set aside, granting relief to the appellants based on the established legal principles.
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