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M/s. TVS Electronics Ltd. Versus The Assistant Commissioner of Central Excise, Chennai and Others

2016 (11) TMI 236 - MADRAS HIGH COURT

Refund - Unjust enrichment - Provisional assessment - There is thus no dispute that the appellant has, in fact, remitted excess excise duty which has been duly quantified and determined to be refundable - Held that: - a mandatory exercise that is to be undertaken by a manufacturer in order to establish nil unjust enrichment. While this may be easier achieved in cases where the transaction is direct as between the manufacturer and end-user, the level of difficulty increases with the number of int .....

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Tax Appellate Tribunal, dated 23.02.2011. 2.This appeal was admitted on the following substantial question of law: Whether the excise duty refund arising due to duty paid provisionally at the time of clearance of goods on stock transfer being higher than the excise duty finally assessed because of grant of various discounts through the issue of credit notes is subject to unjust enrichment? 3.The Appellant is engaged in the manufacture of keyboards, printers and parts thereof. The Appellant follo .....

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and secondly, distributors discount issued on the basis of performance. The discount is issued by way of credit note and the actual price of sale could thus be determined only at the time when the sales are effected from the branches to the distributors. 4.An order-in-original for the period 01.04.2006 to 31.03.2007, was passed by the Assistant Commissioner of Central Excise on 30.04.2008 finalising the provisional assessment made in respect of the clearances effected to the branch/regional off .....

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rom the Branch/Regional Office to dealers was valued at a sum of ₹ 10,64,89,434/- upon which an amount of ₹ 1,74,09,009/- being basic excise duty plus cess was at 2% and 1% was required to be paid. The difference in pricing arises after taking into account the upward and downward price revision which would include the component of discount by way of credit notes. 5.The Assessing Authority computed the excess payment of excise duty by the Appellant at a figure of ₹ 9,50,745/-. T .....

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ording to him, was not entitled to the same. 6.The Assessment was confirmed in appeal by the Commissioner of Central Excise (Appeals) vide order dated 26.03.2010 and the matter was further carried in appeal to the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as CESTAT ) which, vide order dated 23.02.2011 confirms the order of the Commissioner of Central Excise (Appeals) against which the present appeal has been filed. 7.We have heard Mr.Ragavan Ramabadhran on behal .....

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the basis of credit notes, has been accepted in the following terms: 14. We have considered the submissions made by the counsel carefully and examined the material on record. The questions that arise for consideration in this case are whether the Assessee is entitled for a refund and whether there would be unjust enrichment if the said refund is allowed. It was held by the Special Bench of CEGAT, New Delhi by its judgment dated 17.03.1994 in Collector of Central Excise, Madras Vs. Addison & .....

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dealer at the time of purchase. The Additional Solicitor General submitted that any credit note that was raised post clearance will not be taken into account for the purpose of a refund by the department. We do not agree with the said submission as it was held by this Court in Union of India vs. Bombay Tyre International (supra) that trade discounts shall not be disallowed only because they are not payable at the time of each invoice or deducted from the invoice price. It is the submission of t .....

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y the claimant that such duty in relation to which the refund is claimed was, in fact, paid by him and has not been passed on to any other person. The Bench thereafter, at para 21 of the judgement, extracted below, interprets the word buyer in clause (e) to proviso to Section 11-B(2) of the Act to mean any buyer not restricted to the first buyer. In such an event, the burden is on the manufacturer to establish that the incidence of duty borne by him has not been passed on to at any stage in the .....

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