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Larsen & Toubro Ltd. Versus Commissioner of Central Excise, Mumbai-II

2016 (3) TMI 97 - CESTAT MUMBAI

Refund claim - non collection of amount of duty from the buyer - whether once duty is shown in invoice, it is deemed to be passed on? - Held that:- There is no dispute about the fact that the appellant have not collected the amount of duty from their buyer, which they are seeking as refund in the facts and circumstances. Accordingly, I hold that the appellant have discharged the presumption of unjust enrichment as required for the purpose of getting refund. The appellant have produced a copy of .....

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y, Member (J) Shri Mihir Mehta, Advocate, for the Appellant. Shri H.M. Dixit, Assistant Commissioner (AR), for the Respondent. ORDER [Order]. - The appellant, M/s. Larsen & Toubro Ltd. is in appeal against Order-in-Appeal No. AT/M-II/125/04, dated 29-12-2004 passed by the Commissioner of Central Excise (Appeals), Mumbai-II whereby claim of refund has been refused. 2. The brief facts, which are not in dispute, are that the appellant supplied equipment manufactured by them to M/s. Nuclear .....

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amount of ₹ 1,70,821/- being the amount of excise duty calculated in excess in the original invoices and also an amount of Sales Tax of ₹ 59,446/-. As the sales have been made on credit, the appellant credited the amount to the buyer/Tarapur Atomic Power Plant, in the books of account. Thereafter, the appellant filed refund claim on 16-10-2003 for the excess amount of excise duty paid of ₹ 1,70,821/-. As per the verification report of the Superintendent of the Range, the above .....

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-in-Original observing that the duty shown in the invoice is deemed to be passed on to the buyer under Section 11B of the Act. 2.2 Being aggrieved, the appellant is in appeal before this Tribunal. 3. The learned Counsel for the appellant takes me through Section 11B(1), which provides that :- Any person claiming refund of any duty of excise and interest, if any, paid on such duty may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Co .....

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the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person.                         (emphasis supplied) In view of the clear mandate of the statute, it is argued that the presumption is rebutable. The learned counsel further states that it is an admitted fact that they had sold on credit, and before receiving the payment .....

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nder TR-6 challan dated 31-3-2003, is in respect of the goods cleared under invoice No. 20201041, dated 29-3-2003 & No. 20201055, dated 31-3-2003 respectively, have not been received by them from the customers or from any other entity. The certificate of C.A. further states that amount of ₹ 1,70,821/- is appearing as refund receivable in the books of account of the assessee. 3.1 The learned Counsel further relies on the ruling of the Hon ble Madras High Court in the case of Addiso .....

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Welfare Fund has been constituted does not on that score require the authorities dealing with refund claims to start an enquiry as to the price at which the goods had been sold to the ultimate consumer after the dealer who purchases the goods from the manufacturer, sells to its sub-dealer who in turn may sell to a retailer who in turn ultimately may sell the same to the actual consumer. The enrichment of the person, who has paid the duty and seeks refund would be unjust if he even while not suff .....

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the claimant is that the burden of the duty paid had not been passed on by him to any other person. The passing on will occur only if the person who claims refund of duty as shifted the burden to another. There can be no passing on of the incidence of the duty if he merely reduces his burden by receiving the refund. The possibility that the dealer who has obtained goods from the manufacturer may charge to his buyer the full amount of the duty ignoring the refund received by the manufacturer can .....

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at the buyer who has entered into arms length transactions with manufacturer and has sold the goods to sub-dealers, retailers or consumers. 18. The Tribunal therefore was clearly in error in holding that despite the assessee having proved that it had not passed on the incidence duty to its buyers, it was not entitled to the refund even when all the other conditions required to be satisfied under Section 11B had been satisfied. 3.2 The learned counsel also relies on the ruling of the Ho .....

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t of the consignee to pay the duty. Therefore, the burden of paying duty has been borne by the assessee wherein it is fact that no liability was on him to pay the duty. It was further held that if credit notes are raised and benefit is passed on to the customer, thus, not passing on the burden of excise duty, the assessee is entitled to refund of the same. 3.3 That reliance was placed on the Constitution Bench judgment of the Apex Court in the case of Mafatlal Inds. Ltd. v. UOI - 1997 (89) .....

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r Gum Udyog - 1997 (93) E.L.T. 120 (sic), of this Tribunal along with other judgments wherein, the fact that job worker received raw materials (grey fabrics of cotton) from one M/s. DTE and after processing the same, the appellant had cleared the fabrics on payment of additional duty in lieu of Sales Tax @ 8% ad valorem under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The total duty so paid was ₹ 8,43,041/-. Later on realizing that under Notification No. 9/96- .....

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