2008 (1) TMI 747 - AT - Central Excise

Summary

Issues:
1. Challenge to duty liability under Compounded Levy Scheme.
2. Denial of refund claim based on unjust enrichment.
3. Burden of proof regarding passing on the incidence of duty to customers.

Analysis:
1. The appellants contested their duty liability under the Compounded Levy Scheme for the period 1-4-1999 to 31-3-2000. Initially, their duty liability was determined at Rs. 39,356.00 per month, which was later revised by the Commissioner to Rs. 16,597.00 per month. The appellants paid duty at a lower rate initially and then paid the differential amount upon insistence from the Department. Subsequently, they filed a refund claim for the excess amount paid, which was initially sanctioned but later set aside on the grounds of unjust enrichment.

2. The advocate for the appellants argued that the denial of the refund was based on the premise that duty amount was not separately indicated on the invoices. They contended that under the Compounded Levy Scheme, there was no requirement to show excise duty separately on the invoices. The appellants provided a certificate from a Chartered Accountant stating that no excise duty was collected in the sales bills, and there was no agreement to charge excise duty separately. They also highlighted that the differential duty was paid subsequently, negating the possibility of passing on the duty to customers.

3. The Tribunal observed that while the duty amount was not shown on the sales bills, the appellants failed to provide sufficient evidence that the duty had not been recovered from the customers. The certificate from the Chartered Accountant was deemed insufficient, as the absence of separate duty mention could lead to the presumption of passing on the duty. The Tribunal emphasized that the burden of proof rested on the appellants to demonstrate that the duty was not passed on, which could have been achieved by showing the sales prices before and after the introduction of the Compounded Levy Scheme. Since such evidence was not presented, the Tribunal upheld the Commissioner's decision, rejecting the appeal on the grounds of unjust enrichment.

In conclusion, the Tribunal upheld the denial of the refund claim, emphasizing the importance of providing concrete evidence to establish the non-passing on of duty incidence to customers, especially in cases where duty amounts were not separately indicated on invoices under specific schemes.