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TMI Blog2025 (1) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... nd claim related to excess payment of excise duty on 1015 MJ Battery-AA R6/1.5V-Packed: Special Promotional Pack:2U(Pcs) free with select Eveready CFLs from their factory. 2.3 The said refund claim was verified and range superintendent submitted that refund would not be admissible to the appellant. A show cause notice dated 30.11.2012 was issued to the appellant asking them to show cause as to why the refund claim filed by them for Rs.15,31,742/- should not be rejected. 2.4 Assistant Commissioner vide Order-in-Original dated 31.12.2012 rejected the refund claim both on merits and also on the ground of unjust enrichment. 2.5 Aggrieved appellant have filed appeal before Commissioner (Appeals), which has been dismissed as per the impugned order. Aggrieved appellant have filed this appeal. 3.1 We have heard Shri Dhruv Tiwari learned Counsel appearing for the appellant and Shri A.K. Choudhary learned Authorized Representative appearing for the revenue. 3.2 Arguing for the appellant learned Counsel submits that- The issue is no longer res-integra, goods which are supplied free of cost (FOC) are not meant for retail sale, therefore, cannot be assessed under section 4a of the Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of Maximum Retail Price (hereinafter referred to as MRP whereas they instead should have determined the value under Rule 8 & 11 of the Central Excise Valuation (Determination of Price of Excisable Goods), Rules 2000 ie., on the basis of production cost of the goods as calculated by CAS-4 method. 5.3 The adjudicating authority vide their impugned order have rejected the appellants refund claim mainly on the ground given below : (i) The price of CFLs include the price of the goods in question ie. batteries supplied FOC. Moreover, as the party has supplied the said goods to "Eveready Industries India Ltd." situated at different location, to be supplied with the promotional sale of their CFLs, by no stretch of imagination, it can be termed as institutional sale not involving retail sale or not meant for retail sale. (ii) If any of the goods is required to print MRP under the Legal Metrology Act, 2009 or the rules made there under, the valuation is to be determined under provisions of section 4A (1) of the Central Excise Act, which reads as under- "The Central Government may, by notification in the official Gazette, specify any goods, in relation to which it is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. It is a fact that no manufacturer will sell the goods at a loss and the amount spent on FOC goods being for promotion of CFLs is actually attributable towards marketing/advertisement charges. Since they did not provide copies of the invoice issued from their depot, their claim of not passing of duty is not sustainable It is the assessee who has to prove, before claiming the refund of the duty that he has not passed on the burden of duty to the customers. As the assessee have received duty element from the combined value of the goods supplied which is equal to value of CFL s sold from the customers, as provided under section 12A of the said Act, they appear to have failed to cross the hurdle provided by Section 11 AB of the Act. In this case they appear to have reduced their margin of profit to compete in the market or have booked the price of FOC goods towards marketing/advertising expenses. In this case, the invoices were issued by the party and the goods were sold by their other destination/depot at cum- duty price based on market conditions, therefore as provided under section 12B of the Act, 1944, the duty paid by them be deemed to have been passed in full to the buyer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted any invoice issued from this location to the retail customer so as to refute the allegation of unjust enrichment. They have indeed submitted few Tax Invoice in respect of sale to retail customer but these invoice relate either to 'Pune Sales Godown' or 'Cuttack Sales Godown' or at other is in respect of 'Dankuni Sales Godown, Hooghly. 6.2 The provisions of Section 128 of the Central Excise Act, 1944 also become relevant which reads as follows: "Every person who has paid the duty of excise on any goods under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such duty to the buyer of such goods." As it is, as per the above provisions the onus is squarely upon the appellants who are to prove, before claiming the refund of the duty, that they have not passed on the burden of duty to the customers. But in the instant case they have not substantiated their claim by submitting any documentary evidence relating to sale to retail customers from their godown at Lucknow to which dispatch were made and in respect of which this refund claim relates and that which has been listed in the shart submitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, 1995 as to the duty in respect of waste paper/fresh broke. By Notification No. 6/2000-C.E., dated March 1, 2000 complete exemption was granted in respect of paper up to the specified quantitative limit manufactured from unconventional raw materials. Upon receipt of a letter dated March 30, 2001 from the Superintendent of Central Excise, the Appellant examined the matter and realized the mistake committed by it in availing the exemption under Notification No. 67/95-C.E. in respect of waste paper/broke utilized in the manufacture of paper cleared at "nil" rate of duty under Notification No. 6/2000-C.E. From May 2001 onwards, the appellant stopped availing the exemption and started payment of duty on waste paper/broke. 9. The relevant period involved in the appeal i.e. July 2001 to March 2002. The Appellant"s assessments for this period were provisional and these entries were finalized on 30-1-2003. The provisional assessment order was passed on 1-3-2002. The appellant has claimed that at the time of the said final assessment order dated 30-1-2003, it was not aware of the Notification No. 10/96-C.E. or the said Circular dated 1-3-2001 and as such, no claim thereunder was made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counter to the scheme of the Act and will introduce an element of uncertainty in the entire process of levy and collection of excise duty. Such a position cannot be countenanced. The view was taken by us also gains support from the provision in sub-rule (3) of Rule 11 wherein it is laid down that whereas a result of any order passed in appeal or revision under the Act, refund of any duty becomes due to any person, the proper officer may refund the amount to such person without his having to make any claim in that behalf. The provision indicates the importance attached to an order of the appellate or revisional authority under the Act. Therefore, if an order which is appealable under the Act is not challenged then the order is not liable to be questioned and the matter is not to be reopened in a proceeding for the refund which, if we may term it so, is in the nature of execution of a decree/order. In the case at hand, it was specifically mentioned in the order of the Assistant Collector that the assessee may file an appeal against the order before the Collector (Appeals) if so advised." (emphasis supplied) 40. In Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for condonation of delay for another 30 days. The provisions of Section 128 are extracted hereunder : "128. Appeals to [Commissioner (Appeals)]. - (1) Any person aggrieved by any decision or order passed under this Act by an officer of customs lower in rank than a [Principal Commissioner of Customs or Commissioner of Customs] may appeal to the [Commissioner (Appeals)] [within sixty days] from the date of the communication to him of such decision or order : [Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.] [(1A) The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing : Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.] (2) Every appeal under this section shall be in such form and shall be verified in such manner as may be spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under Section 27. In Hero Cycles Ltd. v. Union of India - 2009 (240) E.L.T. 490 (Bom.) though the High Court interfered to direct the entertainment of refund application of the duty paid under the mistake of law. However, it was observed that amendment to the original order of assessment is necessary as the relief for a refund of claim is not available as held by this Court in Priya Blue Industries Ltd. (supra)." 4.4 Nothing has been brought on record to show that the self assessment made by the appellant at the time of clearance of these goods was ever appealed against by the appellant before the Commissioner (Appeals) in terms of Section 35 of Central Excise Act, 1944 or the order of self assessment has been modified. In absence of such modification the submissions made by the appellant in these proceedings under Section 11B challenging the self assessment made for claiming this refund cannot be said to be proper. In view of the above referred decision of Hon'ble Supreme Court were in it has been specifically held that refund proceedings under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is for an amount which is part of the excise duty paid earlier and passed on. The Assessee who did not bear the burden of the duty, though entitled to claim deduction, is not entitled for a refund as he would be unjustly enriched. It will be useful to refer to the relevant para of Mafatlal Industries v. Union of India (supra) in this connection. "108. (iii) A claim for refund, whether made under the provisions of the Act as contemplated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the claima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the claimant has to establish that the amount of duty of excise in relation to which such refund is claimed was paid by him and that the incidence of such duty has not been passed on by him to any other person. Section 11B(2) provides that, in case it is found that a part of duty of excise paid is refundable, the amount shall be credited to the fund. Section 2(ee) defines Fund to mean the Consumer Welfare Fund established under Section 12C. There is a proviso to Section 11B(2) which postulates that the amount of excise duty which is refundable may be paid to the applicant instead of being credited to the fund, if such amount is relatable to the duty of excise paid by the manufacturer and he had not passed on the incidence of such duty to any other person. Clause (e) to proviso of Section 11B(2) also enables the buyer to receive the refund if he had borne the duty of excise, provided he did not pass on the incidence of such duty to any other person. There is a third category of a class of applicants who may be specified by the Central Government by a notification in the official gazette who are also entitled for refund of the duty of excise. A plain reading of Clauses (d), (e) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply for refund of duty to him, provided that he has not in his turn passed on the duty to others. It is, therefore, not correct to suggest that the Act does not provide for refund of duty to the person who has actually borne the burden. There is no vice in the relevant provisions of the Act. Rules cannot be relied upon to impugn the validity of an enactment, which must stand or fall on its own strength. The defect in the Rules, assuming that there is any, can always be corrected if the experience warrants it. The Court too may indicate the modifications needed in the Rules. The Government is always prepared to make the appropriate changes in the Rules since it views the process as a "trial and error" method - says Shri Parasaran". 20. There was a further submission which was considered in the said judgment about the convenience/difficulty for the ultimate consumer to make applications for refund. In that connection it was held as follows :- "99. We agree with Shri Parasaran that so far as the provisions of the Act go, they are unexceptionable. Section 12C which creates the Consumer Welfare Fund and Section 12D which provides for making the Rules specifying the manner in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries (supra). We are bound by the said findings of a Larger Bench of this Court. The word "buyer" in Clause (e) to proviso to Section 11B(2) of the Act cannot be restricted to the first buyer from the manufacturer. Another submission which remains to be considered is the requirement of verification to be done for the purpose of finding out who ultimately bore the burden of excise duty. It might be difficult to identify who had actually borne the burden but such verification would definitely assist the Revenue in finding out whether the manufacturer or buyer who makes an application for refund are being unjustly enriched. If it is not possible to identify the person/persons who have borne the duty, the amount of excise duty collected in excess will remain in the fund which will be utilized for the benefit of the consumers as provided in Section 12D." 4.9 Hon'ble Supreme Court in the case of Allied Photographics India Ltd. [2004 (166) ELT 3 (SC)] has obsereved as follows:- "17. On the above facts, the short point which arises for determination is - whether incidence of duty was passed on by NIIL to its distributor M/s. AGIL and whether M/s. AGIL in turn passed on the burden to it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of purchase. In such cases, cost of purchase to the buyer is a relevant factor. None of the authorities below have looked into this aspect. Even the Appellate Tribunal has not gone into this relevant factor. It has merely quoted the passages from the order of the lower authority, whose order was impugned before it. Costing of the goods in the hands of the distributor, the cost element and the treatment given to purchases by the buyer in his own account were relevant circumstances which the authorities below failed to examine. It was submitted that cost of purchase was not a relevant factor. It was submitted on behalf of the respondent that the resale price charged by the buyer was not a relevant factor. It was submitted that since the sale price of the goods before and after the assessment remained the same the burden of excess duty was absorbed by the respondent. It was submitted that in any event the sale price of the goods increased much less than the amount of duty (differential) involved in this case and, therefore, incidence of duty was not passed on to the consumers. In this connection, reliance was placed on several judgments of the Tribunal. We have gone through these jud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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