TMI Blog2003 (12) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... n up for disposal by this common order. 2. The brief facts of the case are that the appellants are engaged in the manufacture of vehicles such as Mopeds, Motorcycles and Scooty falling under Chapter Heading Nos. 8711.10 and 8711.20. They have a separate duty paid spares godown . The spares required for its duty paid spares godown are met by placing separate purchase orders. The inputs (parts/components) required for the manufacture of final products (vehicles) are met by placing separate purchase orders on the manufacture of these items. The appellants are also said to be engaged in trading activity of buying and selling spares for these vehicles. Appellants also manufacture a few spares. In such cases, the, spares are removed from the manufacturing premises to the duty paid spares godown on payment of applicable Central Excise duty. According to the appellants, at times, availability of certain spares in the duty paid spares godown becomes critical to meet the needs of the customers. To meet the requirement of spares for the dealers to whom the vehicles are sold, if the spares are available in the input stock, on which they have availed Modvat credit, under Rule 57A, they div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other issue is whether there is any unjust enrichment in the facts and circumstances of the case where the pricing of spare parts has nothing to do with the quantum of duty paid on unpredictable, occasional diversion of inputs under Rule 57F(1)(ii). 3. Shri C. Saravanan, learned Counsel, appearing for the appellants reiterated the grounds of appeal. He has invited our attention to Notification No. 28/95-C.E. (N.T.), dated 29-6-1995 and submitted that in terms of this amending Notification, where the inputs are removed from the factory for home consumption on payment of duty of excise, such duty shall be the amount of credit that has been availed in respect of such inputs under Rule 57A. He submitted that the appellants continued to pay duty before clearance of the goods as per the un-amended provisions of Rule 57F(ii) even after amendment took place to the said provisions and since they have paid duty in excess of what was required to have been paid in terms of the amended provision, they have claimed the refund, which is due to them and he prayed for allowing the appeal. He has also cited the following case laws in support of his plea for allowing the appeal. (1) Arunoday Mill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es from availing the credit. Apart from that, the final goods sold was at the price fixed by the Government. (10) CCE v. Raghuvar (India) Ltd., reported in 2000 (118) E.L.T. 311 (S.C.). This was a case where the Hon ble Apex Court was interpreting the provisions of Section 11 of the Central Excise Act vis-a-vis Rule 57-I of the Central Excise Rules. The Apex Court was thus dealing with entirely a different situation when it was held that Section 11A of the Act on its own terms will have no application or operation to cases covered under Rule 57-I of the Rules. (11) M/s. Vidyut Engineering Co. v. U.O.I., reported in 1999 (34) RLT 598 (Kar.). This was a case where the Tribunal set aside the duty demand and the petitioner filed refund claim. The department was directed to pay interest @12% p.a., with instructions to the Deptt. that the interest can be recovered from the officers responsible for delay. (13) Modi Rubber Ltd. v. CCE. Meerut, reported in 1994 (73) E.L.T. 129, para 9 regarding filing of D-3 intimation and it was held that subsequent filing of the refund claim cannot be held to be barred by time. (14) CCE v. Nisha Chemicals, Bombay, reported in 1986 (26) E.L.T. 809, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order and submitted that it was obligatory on the part of the assessee to prove that incidence of duty has not been passed on and inasmuch as in the present case they have not done so, they are not entitled to any refund. She therefore, prayed for rejection of their appeal and upholding the impugned order. 5. We have carefully considered the rival submissions and gone through the case records, In the instant case, as seen from the sequence of events, prior to 29-6-1995. the assessee was resorting to removal of inputs for home consumption under Rule 57F(1)(ii) and were required to pay duty as if the inputs (spares) have been manufactured in their factory. With the issue of Notification No. 28/95 on and effective from 29-6-95, they were required to reverse only a lesser amount of Modvat amount to the extent of Modvat credit availed in respect of such inputs under Rule 57A. 6. We observe that the question posed before us is whether the assessee has complied with the requirement of Section 11B in support of the claim for refund in respect of the amount which has been paid by them in excess of what was required to have been paid in terms of the amended law, for the removals eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Consumer Welfare Fund. This is a contradictory finding. When a claim is hit by time-bar the question of sanctioning the claim does not arise. A claim is sanctioned for being credited into the Consumer Welfare Fund, when it is found that there was excess payment of duty by the assessee, but the assessee is not able to show that he has not passed on the incidence of duty to any other person. In the instant case, as noted in Para 6 above, the claim for the period from 1-7-95 to 31-7-95 was submitted on 31-10-95 i.e. clearly within a period of six months from the relevant date as stipulated under Section 11B though the claim was not accompanied by documentary evidence to show that incidence of duty has not been passed on to any other person. The Tribunal in the case of KLRF Textile Unit v. CCE, reported in 1999 (33) RLT 544 has held that where a refund was initially claimed within the limitation period, though formal refund claim in the prescribed proforma was filed later, the claim was not barred by limitation. In the case of Wood Working Centre v. CCE, Indore, reported in 1996 (85) E.L.T. 201, the assessee sent a letter dated 10-1-86 claiming exemption and requesting for refund of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 provision. Similarly, no one will ordinarily pass on less excise duty than what is exigible and payable. A manufacturer may dip into his profits but would not further dip into the excise duty component. He will do so only in the case of a distress sale again. Just because duty is not separately shown in the invoice price, it does not follow that the manufacturer is not passing on the duty. Nor does it follow there from that the manufacturer is absorbing the duty himself. The manner of preparing the invoice is not conclusive. While we cannot visualise all situations, the fact remains that, generally speaking, every manufacturer will sell his goods at something above the cost-price plus duty. There may be a loss-making concern but the loss occurs not because of the levy of the excise duty - which is uniformly levied on all manufacturers of similar goods, but for other reasons. No manufacturer can say with an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund it has to be shown by the claimant that incidence of duty has not been passed on to their customers. As rightly held by the authorities below, no evidence has been placed on record that the burden of duty has not been passed on to the customers, on their removal in terms of Rule 57A(1)(ii). Inasmuch as in terms of Rule 57A (1)(ii) in respect of which credit has been availed has to be removed from the factory for home consumption or for export on payment of duty, by no stretch of imagination it can be held that while removing the goods they have not passed on the duty burden to their customers, more particularly when they have paid duty on the inputs and availed credit on them and the rules require them to do so. Further, it has to be noted that the amendment to the Notification has brought about changes to the rate of duty and not the manner of utilisation of input credit. Appellants are a large organisation and it cannot be said that they were not aware of the procedure to be followed. Merely stating that there was unpredictable situation and that the quantum of removals were not uniform and hence they could not pass on the incidence of duty to their customers, will not he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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