TMI Blog2010 (2) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... ur. By the impugned order the appeal filed by the appellants against order of the adjudicating authority has been dismissed. The adjudicating authority by its order dated 31st July, 2002 while sanctioning the refund to the tune of Rs. 31,83,519/- and Rs. 67,19,061/- and rejecting the claim of Rs. 8,378/- directed that the said amount should be credited to the Consumer Welfare Fund in terms in terms of Section 11B(2) of the Central Excise Act, 1944 on the ground of failure on the part of the appellant to discharge their burden regarding non-passing of duty liability to the consumer. 3. The facts, in brief, relevant for the decision are that the appellants were engaged in the manufacture of Processed Manmade Fabrics classifiable under Chapter 54 and 55 of the Schedule to the Central excise Tariff Act, 1985. They used to receive Grey Fabrics from various Grey Fabric suppliers and used to return the Processed Fabrics to the dealers on payment of duty on the basis of job work done and processed on such fabric procured by them. In terms of Trade Notice No. 18/CEX/2001/M-III, dated 20-3-2001 issued by Bombay Commissionerate the appellants were paying duty on the assessable value arrived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te and debit note besides balance sheet which apparently discloses that the amount which was sought to be refunded was always shown as advance to the Central Excise department and not towards expenses in the said balance sheet. Reliance is sought to be placed in the matter of Addison Co. v. CCE, Madras, reported in 2001 (129) E.L.T. 44 (Mad.), Jaipur Syntex Ltd. v. CCE, Jaipur, reported in 2002 (143) E.L.T. 605, and UOI v. A.K. Spintex Ltd., reported in 2009 (234) E.L.T. 41 (Raj.). 5. On the other hand, learned D.R. drawing our attention to the order passed by the original authority and the Commissioner (Appeals) submitted that the decision by the lower authorities is in consonance with the decision in the matter of Mafatlal Industries Ltd. v. UOI, reported in 1997 (89) E.L.T. 247 (S.C.). He further submitted that the provision of law comprised under Section 11B(2) clearly requires that the amount refundable is required to be credited to the Consumer Welfare Fund unless the claimant clearly establishes that the duty burden in that regard has not been passed on to the ultimate consumer. Drawing our attention to the decision in the case of Sangam Processors (Bhilwara) Ltd. v. CCE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eference to the invoices issued by the appellants in relation to the goods supplied to them after deducting the duty element calculated on the amount of value of goods deducting 15% of the cost of production. It is not the case of the department that this evidence produced regarding absence of collection of duty at the time of supply of goods to Sangam Suitings Ltd. was sought to be rebutted by any evidence on record. In the case in hand, as it was the contention of the appellants that the duty element was not passed on to the dealers and that was sought to be established by the above documents, neither of the contents were disputed nor any counter evidence in this regard was produced by the department. As rightly pointed out by the learned Advocate this relevant aspect of the matter was not considered either by the adjudicating authority or Commissioner (Appeals) while deciding the matter. 8. Once it was established by the appellants that the burden in relation to the amount which was sought to be claimed was not passed on to the dealer to whom goods were supplied, the burden cast upon them in terms of Section 12B was clearly discharged and the onus had shifted upon to the depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notes were issued by the suppliers of raw material but not credited in the accounts of customers by the assessee" taking into consideration the facts of the case had observed as under :- "After going through the judgments, at the outset, we may observe, that the question is framed on basic misconception, rather on assumption, which is not borne out from the record, inasmuch as, the question apprehends error on the part of the Tribunal, in allowing refund, where incidence of duty has been passed on to the customers initially, and subsequently debit notes were issued by the suppliers of raw material but, no credit notes were credited in the account of the customers by the assessee. We may at once observe, that this is no where, that the authorities below were of the view, that the debit note were not credited in the account of the customers, by the assessee. Rather as is clear from the impugned order of the Tribunal, that it was not disputed on the side of the revenue, that customer had immediately issued the debit notes, and it was never contended, whether before the Assistant collector or the Commissioner (Appeals), or the Tribunal, that the necessary credit was not given by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount to the seller, and if all those facts are shown and proved, the burden placed on the assessee, by Section 12B, would shift on the revenue, then, it is required for revenue, to prove, either that the theory projected by the assessee, is fake and false, or that the burden has actually been passed on. Once the assessee leads reliable evidence, about his having not passed burden on the purchaser, and revenue fails to rebut that evidence, the presumption enacted by Sec. 12B, stands sufficiently rebutted, and cannot survive ad infinitum. The preposition propounded by the Hon'ble Supreme Court in Mafatlal case being preposition No. 3, entitling only the ultimate person, bearing the burden, to be entitled to lay claim for the refund, is obviously, not open to any argument, and is duly respected. The question, then arise is, the question of fact, as to who is an ultimate person, who has borne the burden. Obviously, if it is established by the assessee, that the burden has not been passed on, or has been appropriately reversed, the ultimate person, who has suffered the burden, would be assessee himself." 13. Ultimately the Rajasthan High Court held thus :- "It is faced with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicate in all the relevant documents the amount of such duty which will form part of the price at which the goods are to be sold, while Section 12B raises a presumption of law that until the contrary is proved, every person who has paid the duty of excise on any goods shall be deemed to have passed on the full incidence of such duty to the buyer of such goods. Since the presumption created by Section 12B is a rebuttable presumption of law - and not a conclusive presumption - there is no basis for impugning its validity on the ground of procedural unreasonableness or otherwise. This presumption is consistent with the general pattern of commercial life. .................................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 manufacturer as a class are knowledgeable persons and more often than not have the benefit of legal advice." 17. Above ruling of the Apex Court in relation to Section 12A and 12B of the said Act clearly discloses that in case of contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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