TMI Blog2014 (8) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... edit of duty paid @ 15% and cannot be restricted to 10% as the provisions of Notification No.5/94-CE (NT), as amended are not applicable to the present facts because the entire duty incidence is borne by appellant as per Rule 196 of Central Excise Rules, 1944 and not the Public Sector Refinery - So far as applicability of unjust enrichment is concerned appellant has relied upon CA s certificates to the effect that duty incidence borne by them is not passed on to the buyers. Such a certificate produced by the appellant cannot be brushed aside in the absence of a contrary view of another expert on the subject as appellant has discharged the initial burden of not recovering the duty for which refund is sought. There is no reason to hold in the present appeal as to why CA's certificate produced by the appellant should not be considered as an evidence of non-recovery of amount from the consumers - appellant is eligible to credit of duty paid on Naptha @ 15% under Rule 196 of Central Excise Rules 1944 - Decided in favour of assessee. - Appeal No.E/222/2008-SM - Order No. A/11521/2014 - Dated:- 22-8-2014 - Mr. H.K. Thakur, J. For the Appellant : Shri Willingdon Christian, Adv. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Naptha and the remaining 5% was borne by the Public Sector refineries. He made the Bench go through Para 2.3 of the Trade Notification No.56/97, dt.21.05.2007 issued by Vadodara Commissionerate to drive home the point that credit in normal purchase of Naptha was admissible to only to the extent of 10% as only this much duty incidence is borne by the consumers. It was his case that as in the case of the present appellant duty on Naptha was paid and borne by appellant @ 15%, therefore, appellant will be eligible to 15% credit and the same cannot be restricted to 10%. It was also his case that in the present proceedings duty has not been paid under Section 3 of the Central Excise Act, 1944 but has been paid as per Rule 196 of Chapter X of the Central Excise Rules 1944. It was strongly argued that restriction imposed as per Notification No.5/94-CE(NT), read with Notification No.14/97-CE(NT), will not be applicable to the present facts and circumstances of this appeal. He relied upon the case law of Gujarat Paraffins Pvt.Ltd. Vs UoI [2012 (282) ELT 33 (Guj)] where there was a conflict in taking credit @ 15% on imported goods and 10% with respect to goods purchased from the Indian refin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be restricted to only 10% of the duty paid as per Notification No.5/94-CE(NT), dt.1.3.1994 as amended by Notification No.14/97-CE(NT), dt.3.5.1997. The purpose and scheme of restricting credit to 10% on certain petroleum products has been explained in Para 2.3 of the Public Notification No.56/97, dt.21.5.1997 issued by Vadodara Commissionerate and is reproduced below:- 2.3 Section 87 of the Finance Act, 1997 seeks to give retrospective effect to the Notification No.14/97-CE(NT) dt.3.5.97 w.e.f. 23.07.1996. The Modvat rules were amended vide Notification No.14/97-CE(NT), dt.3.5.97 to restrict the credit taken on specified petroleum products to 10% for Excise duty as well as additional duty of Customs. In the Budget 1996 Excise duty on certain petroleum products was raised from 10 to 15%. As the prices of these goods were administered prices, the increase in duty could not be passed on to the consumers and has to be absorbed by the public sector refineries from the oil pool account. The buyers of these goods took credit of the duty paid under the Modvat scheme at the rate of 15% though they had borne duty paid under the Modvat scheme at the rate of 15% though they h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsons or things that are grouped together from those that are left out of the group, and (ii) that the differentia must have a rationale relation to the objects sought to be achieved by the statute in question. The fundamental principle flowing from the judgments relied upon by the petitioner is that Article 14 forbids class legislation but permits reasonable classification for the purpose of legislation which classification must satisfy the above twin tests. The Government would have to affirmatively satisfy the Court that the twin tests had been satisfied, and for that the Government must establish not only a rationale principle on which classification was founded but the Government must also co-relate it to the objects sought to be achieved. If this cannot be shown by the Government, then the departure was arbitrary, irrational, unreasonable and discriminatory. The only objective sought to be achieved by restricting Modvat credit to the extent of 10% for inputs in the nature of petroleum products was to allow manufacturers purchasing such petroleum products from public sector refineries the credit of that amount which was actually paid by them as excise duty. Since duty only to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut entering into any disputed questions of fact. There is no dispute as to the fact that the certificate produced by the petitioner of its Chartered Accountant was not disputed by the respondents by bringing on record any opinion of another qualified person so as to displace the opinion of the professional expert. In fact, the petitioner supported the Certificate of the Chartered Accountant by a further letter tendered after Notification No. 41/2001, dated 21-9-2001 wherein the Chartered Accountant had specifically stated that they had followed the contents of the Accounting Standards (A.S. 10) while issuing the original certificate. Once this statement of qualified Chartered Accountant has come on record, even on application of the subsequent notification dated 21-9-2001, the case of the petitioner stands proved by the relevant rules of the scheme inasmuch as the total value of the investment in plant and machinery does not exceed the specified limit of ₹ 3 crores. The opinion rendered by the competent expert has not been dislodged by the respondents in any manner whatsoever and the opinion expressed by the Deputy Commissioner would remain merely an opinion in the face of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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