TMI Blog2015 (11) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... ng anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any Court, the refund shall be made only if the condition stated in sub-section (2) are fulfilled. Clause (d) of sub-section (2) provides that the manufacturer has to establish that the incidence of such duty has not passed on to any other person. If the incidence of duty is passed on to any other person, the claim of refund would be hit by the bar of unjust enrichment. The provision of law as stated above makes it clear that it is burden of the appellant/applicant to establish that the incidence of duty has not been passed on any other persons. In view of sub-section (3) of section 11B, the first leg of argument of the appellant fails. The goods manufactured by the appellant was sold to HLL in terms of the agreement entered into between them. HLL in turn sells the products to redistributors/stockist, who are large wholesalers of the various confectionary products and other products. The redistributors/stockist have the option of selling directly to the wholesalers in an area which are not directly covered by the redistributors/stockiest. In such situation, it is for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected. 3. Upon this, the appellant filed writ petition No.6280/2002 dt.11.11.2002 before Honble Madhya Pradesh High Court at Jabalpur. The writ petition was posted for hearing on 15.11.2002. Meanwhile on 13/11/02 the Assistant Commissioner passed an order rejecting the request for provisional assessment and deciding the issue of valuation on merits holding that duty was payable on the value determined section 4A of the Act and not on the transaction value determined under section 4 of the Act. 4. The Writ petition which was then pending before Honble High Court was disposed of by taking into account the submissions made by both sides before the Honble High Court. In para 7 and 8 of the judgement, Honble High Court has considered the submissions of both sides and stated that appellant would be entitled to refund of differential duty as stated by respondent, if the dispute regarding valuation was decided in favour of the appellant. 5. The appellant then paid duty on the value determined under section 4A for the period 19.11.2002 to 15.12.2003 under protest. The appellant also filed an appeal before the Commissioner (Appeals). During pendency of the appeal, two further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this order of the Commissioner (Appeals) rejecting the claim for refund of differential duty, the appellant is now before us. 9. The learned Counsel for the appellant contended that the appellant is entitled to refund of differential duty paid under protest. The argument advanced by Shri Ravinder Narain, the learned Counsel for the appellant was twofold. Firstly, that there was specific undertaking/agreement between the appellant and the department before the Honble High Court while disposing of the writ petition No.6280/2002 and in pursuance of such agreement recorded in the order of the High Court, the appellant is entitled for refund. Secondly, as per Sourcing Agreement entered into between the appellant and HLL, the differential duty in dispute was paid by the appellant by obtaining an unsecured loan from HLL. As per agreement with HLL, the appellant is bound to return the same to HLL on receiving the refund. It is also the case of the appellant that HLL has absorbed higher duty and has not passed it on to other person. 10. According to the learned JCDR, Shri Pramod Kumar the agreement entered into by the appellant and HLL cannot be made the basis for determination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of differential duty was made available by HLL to the Appellant Company, as an advance, on returnable basis, pending determination of the correct amount of duty, as aforesaid. Thereupon, the Appellant Company deposited the aforesaid amount of differential duty under protest and without prejudice to their contention as to the correctness of the demand. 6. In the above circumstances, the aforesaid amount provided by HLL to the Appellant Company were given as unsecured loan, vide clear understanding, obligation and undertaking on the part of the Appellant Company that upon final decision on merits relating to the correct amount of duty payable, the refund of differential duty so made, would be returned by the Appellant Company to HLL. 13. The relevant portion of para 7 and 8 of the High Court s order dated 13.11.2002 is reproduced as under:- 7. The grievance of the petitioner that in case as per Section 4A of the Act, it pays excise duty, it will not be refunded by the respondents. The learned counsel for the respondents submits that this apprehension of the petitioner is misconceived. In case, the petitioner is not found chargeable excise duty under section 4A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be passed on to others. 15. Needless to say that to receive refund, the appellant has to be eligible for refund of duty under the provisions of law. Relevant provisions of section 11B are noticed as under:- Sub section (2) of section 11B If, on receipt of any such application, the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] is satisfied that the whole or any part of the [duty of excise and interest, if any, paid on such duty] paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund : Provided that the amount of [duty of excise and interest, if any, paid on such duty] as determined by the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to - (a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (b) unspent advance deposits lying in balance in the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sub-section (3) of section 11B, the first leg of argument of the appellant fails. 17. Let us now proceed to analyze whether the claim for refund of duty is hit by the bar of unjust enrichment. The appellant is a contract manufacturer for HLL. According to the appellant, the Sourcing Agreement entered into with HLL stipulates that excise duty paid by the appellant on manufacture of products is to be reimbursed by HLL. A copy of Sourcing Agreement dt.10.1.2003 has been produced alongwith additional affidavit filed on 5.1.2015. 18. The goods manufactured by the appellant was sold to HLL in terms of the agreement entered into between them. HLL in turn sells the products to redistributors/stockist, who are large wholesalers of the various confectionary products and other products. The redistributors/stockist have the option of selling directly to the wholesalers in an area which are not directly covered by the redistributors/stockiest. In such situation, it is for the appellant to establish with documents that the incidence of duty has not been passed on to any other person. 19. Learned Counsel for the appellant submitted that HLL had absorbed the higher duty. That the higher ..... X X X X Extracts X X X X X X X X Extracts X X X X
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