TMI Blog2014 (11) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... n at the stage of final hearing. Therefore at this stage, it cannot be said that the Appellant have prima facie case in their favour. On deposit of this amount within the stipulated period, the requirement of pre-deposit of balance amount of duty demand and interest shall stand waived and recovery thereof stayed - Partial stay granted. - Appeal No. E/58922/2013-EX(DB) - Stay Order No.52947/2014 /2014 - Dated:- 2-9-2014 - Smt. Archana Wadhwa and Shri Rakesh Kumar, JJ. For the Appellant : Shri B.L. Narsimhan, Advocate For the Respondent : Shri Davinder Singh, Joint CDR ORDER Per Rakesh Kumar: The facts leading to filing of this appeal and stay application are, in brief, as under:- 1.1 The appellant are manufacturers of cement chargeable to central excise duty. In 1987, the Central Government vide notification no.36/87-CE dated 1.3.87, prescribed a concessional rate of duty of ₹ 175 P.M.T. for the cement manufactured in a factory which had commenced production on or after the first day of April, 1986 subject to the condition that such cement is manufactured out of clinker produced within the same factory and that the cement is manufactured in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the appellant and ordered for credit of the remaining amount to the Consumer Welfare Fund on the ground that incidence of this amount of duty has not been borne by the appellant. The appellant filed an appeal before the Commissioner (Appeals) against the Assistant Commissioners order dated 20.12.94 and the Commissioner (Appeals) vide order-in-appeal dated 24.08.2001 rejected their appeal and upheld the order-in-original. Aggrieved by this order of the Commissioner (Appeals), the appellant filed an appeal before the Tribunal. The Tribunal vide Final Order No.263-264/02-C dated 5.12.2002 allowed the appeal with consequential relief on the ground that the bar of unjust enrichment would not be applicable when duty has been paid under protest and directed for payment of refund amount with utmost expedition. The Assistant Commissioner vide order-in-original dated 17.06.2003 sanctioned the refund claim of ₹ 9,69,12,799/- under Section 11 B to the appellant but did not accept their claim for interest on this amount. The refund claim order dated 17.06.2003 was reviewed by the Commissioner and the Assistant Commissioner was directed to file an appeal before the Commissioner (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption that incidence of duty mentioned in the invoice has been passed to the buyer, would not be applicable to this case, that in this regard, he relies upon the Apex Court s judgement in the case of Mafatlal Industries Ltd. Vs. Union of India [(1997) 5 SCC 536] (SC)], that in view of this, the burden of proving that incidence of duty, whose refund has been claimed, had not been borne by the appellant and had been passed on to the buyers, is on the department, that in this case, on the instructions of the CBEC, the Assistant Director (Cost) had been deputed to examine the records of the appellants company for the period from March, 1987 to March, 1990 and the report as to whether the incidence of duty whose refund been claimed, had been borne by the appellant and not passed on by them, that Assistant Director (Cost) has submitted a report dated 25.09.92, wherein he reported that during the period of dispute, the sale price of the cement was such that the appellant company could not even recover their cost of production, that when the appellant company could not recover the cost of production, there was no question of the appellant having passed on the incidence of duty, whose ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Commissioner in the impugned order has observed that in terms of the Apex Court s judgement in the case of Mafatlal Industries Ltd. (supra), the presumption is that the tax payer has passed on the tax liability to the consumers and it is for the tax payer (the assessee) to produce evidence that the tax whose refund is being claimed, was absorbed by him, that this observation is not correct as the refund claims pertain to the period prior to 20.09.1991 and in terms of the Apex Court s judgement in the case of Mafatlal Industries (supra), while the principle of unjust enrichment would be applicable, the provisions of Section 12 B would not be applicable, and that in view of the above, the demand of duty confirmed by the Commissioner is not sustainable and the refund had been correctly sanctioned and paid to the appellant company. He pleaded that the appellant have strong prima facie case in their favour, and, therefore the requirement of pre-deposit of duty demand and interest may be waived for hearing of their appeal and recovery thereof may be stayed. 4. Shri Davinder Singh, Learned Joint CDR, opposed the stay application by reiterating the findings of the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his regard, the appellants plea is that in terms of the directions of the CBEC vide order dated 13.07.1992, Assistant Director (Cost) had been deputed to examine the costing and financial records of the appellant company to ascertain as to whether the appellant had borne incidence of duty whose refund is sought by them. In this regard, the Assistant Director (Cost) after scrutinizing the cost data and the financial records of the appellant company, has submitted a report dated 25.08.92 reporting that (a) According to the Guidance Note on Accounting Treatment for Excise Duties issued by the Institute of Chartered Accountants of India, excise duty is considered as manufacturing expense because excise duty contributes to the value of the product, as a duty paid product has a higher value than a product on which duty remains to be paid and no sale or further utilization of excisable goods can take place unless excise duty is paid thereon; (b) On the analysis of cost data of the unit, it has been observed that in the year 1986-87 and 1987-88, the unit has suffered loss as the total sales value are less than total cost of goods sold and thus, the full cost could not be recover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the Government. The question as to whether for determining the existence of unjust enrichment, when the refund claim is for a period covering more than one financial year, the non recovery or under recovery of excise duty during one financial can be adjusted against full recovery of excise duty during other financial years or whether the existence of unjust enrichment has to be seen financial year wise, requires in-depth examination. Besides this, there is one more important issue which requires in-depth examination. As mentioned in Asstt. Director (Cost)s report, in a number of sales including the sales, where the total sale price realized from the customers is less than the cost of production, the invoices issued mention the basic price and excise duty separately. According to the Appellant, this was done so to enable the customers to take Modvat Credit of the excise duty, if they use the cement to manufacture some other dutiable final product. Here a question arises that when sale is at a total price which is below the cost of production and when the invoice gives the break up of the total price unit, the basic price and excise duty and the customer has taken Modvat/Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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