TMI Blog2000 (8) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants except deductions on account of quality discount and special packing . Aggrieved by the said order appellants took up the matter in appeal and the Collector (Appeals) by Order-in-Appeal dated 28-6-1985 allowed deductions in respect of both the claims namely, quality discount and special packing. Thereupon the appellants sought refund of the various amounts of duty paid by them. However, by show cause notice dated 18-4-1995, the Assistant Commissioner asked them to show cause why the refund claims filed by them should not be treated as premature or why the said refund claim should not be sanctioned and credited to the Consumer Welfare Fund under Section 12C of the Central Excise Act on the ground that the incidence of duty had been passed on to the customers by the appellants. The matter was adjudicated by the Assistant Commissioner by Order-in-Original dated 21-6-1996 sanctioning refund of Rs. 14,97,414/- on the element of additional sales tax and Rs. 3,39,89,043/- on account of interest charges but ordered the said amount to be credited to the Consumer Welfare Fund (CWF) under Section 12C of the Central Excise Act. The claim of the appellants on account of packin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjustments of duties after provisional assessment under Rule 9B(5). In this connection, appellants have drawn attention to para 95 of the Mafatlal Industries judgment. They contend that in a case of finalisation of provisional assessment under Rule 9B, where only a refund claim simpliciter was being claimed by an assessee, Section 11B was not attracted. According to the appellants, this issue is fully covered in favour of the appellants by the Tribunal decision in Needle Industries (India) Ltd. v. CCE reported in 1998 (101) E.L.T. 286 wherein it was held that where the refund claim was consequent upon the adjustment on the finalisation of the provisional assessment under Rule 9B(5), Section 11B was not attracted. Reliance was also placed in this connection on the Tribunal decision in Indo Flogates Ltd. [1997 (20) RLT 308]. Appellants have therefore prayed for setting aside of the impugned order dated 25-9-1998 and for holding that they were entitled to the refund of Rs. 3,81,30,960/-. 4. Defending the impugned order, Departmental Representative Shri V.K. Dahiya contends that the appellants were issued a show cause notice on 18-8-1995 to show cause why the refund claim should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (supra) has to be seen in the context of the preceding discussion of the wider question in paragraphs 91 to 95 under the heading Do Sections 11B and 12B have the effect of changing the very nature of excise duty? For facility of reference the said paragraphs are reproduced below : DO SECTIONS 11B AND 12B HAVE THE EFFECT OF CHANGING THE VERY NATURE OF EXCISE DUTY? 91. It is next contended that in a competitive atmosphere or for other commercial reasons, it may happen that the manufacturer is obliged to sell his goods at less than its proper price. 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 provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r who has not passed on the duty can always prove that fact and if it is found that duty was not leviable on the transaction, he will get back the duty paid. Ordinarily speaking, no manufacturer would take the risk of not passing on the burden of duty. It would not be an exaggeration to say that whenever a manufacturer entertains a doubt, he would pass on the duty rather than not passing it on. It must be remembered that manufacturers as a class are knowledgeable persons and more often than not have the benefit of legal advice. And until about 1992, at any rate, Indian market was by and large a sellers market. 92. For a proper appreciation of the learned Counsel s contention, it would be appropriate to examine the scheme of the Act and the Rules concerning the valuation of excisable goods and their clearance/removal. Section 4 deals with valuation of excisable goods. The assessable value under Section 4 is determined on the basis of the normal price referred to in Section 4(1)(a) - and in certain cases under Section 4(1)(b). In either case, the excise duty and certain specified amounts are deductible. More important, in the documents submitted by the manufacturer for determinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in are true. In the place of gate pass, provision is now made for a special form of invoice which gives full particulars of the price, assessable value, rate of duty and duty actually paid. From the invoice and the proforma now prescribed, it is equally easy to ascertain the duty component, i.e., the effective duty paid and passed on to the purchaser. 93. We may also mention that, in case of S.R.P., the Rules require that every assessee shall keep a current account with the Collector/ Commissioner. He has to make periodical credits in the current account by cash payment into the treasury so as to keep the balance sufficient to cover the duty due on the goods intended to be removed at any time. On each consignment removed by him, he has to pay the duty determined by him by debiting the same to the current account before removal of the goods. As stated already, in the case of S.R.P. also, the manufacturer has to file the monthly returns in Form RT 12 which have to be assessed by the Proper Officer as required by Rule 173-I. The Proper Officer adjusts the duty paid by the manufacturer against the duty assessed by him. If as a result of such adjustment, it is found, during the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B recoveries or refunds will not be governed by Section 11A or Section 11B as the case may be unless the matter has been taken up in appeal or in representation. 8. Para 96 (ibid) relied on by the Commissioner (Appeals) in the impugned order reads as under : NATURE AND CHARACTER OF REFUND CLAIMS UNDER THE CENTRAL EXCISES AND SALT ACT AND THE CUSTOMS ACT : 96. It would be evident from the above discussion that the claims for refund under the said two enactments constitute an independent regimen. Every decision favourable to an assessee/manufacturer, whether on the question of classification, valuation or any other issue, does not automatically entail refund. Section 11B of the Central Excises and Salt Act and Section 27 of the Contract Act, whether before or after 1991 amendment - as interpreted by us herein - make every refund claim subject to proof of not passing on the burden of duty to others. Even if a suit is filed, the very same condition operates. Similarly, the High Court while examining its jurisdiction under Article 226 - and this Court while acting under Article 32 - would insist upon the said condition being satisfied before ordering refund. Unless the claimant fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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