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TMI Blog2003 (4) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner on the question whether they had not passed on the burden of duty to their customers. 4.In C.A. Nos. 7706-7711 of 2002 in which the respondent is the same as in C.A. No. 7165 of 2000, the Tribunal following its earlier decision dated 29th June, 2000 (which is impugned in C.A. No. 7165 of 2000) allowed the appeal preferred by the respondent and held that the revenue had failed to discharge the burden of showing that the manufacture had taken place by the process of cold rolling of steel strips from hot rolled strips. However, it remitted the matter to the Assistant Commissioner to decide the question as to whether it had not passed on the incidence of duty to the customers. 5.In C.A. Nos. 439-442 of 2000 the Tribunal following its earlier decision in the case of Steel Strips Ltd. (impugned in C.A. No. 7165 of 2000) held that cold rolled strips produced out of duty paid hot rolled steel strips do not undergo a process of manufacture and hence are not chargeable to excise duty. 6.We may at the threshold observe that while in C.A. No. 7165 of 2000 and C.A. Nos. 7706-7711 of 2002 the dispute arose when the respondent filed applications for refund of excess excise duty paid, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e after 28th February, 1986 classified hot rolled strips and cold rolled strips separately as they were distinguishable from each other. Separate sub-headings have been provided and while hot rolled strips come under sub-heading 7211.52 cold rolled strips come under sub-heading 7211.51. The notice further stated that the respondent had passed on the burden of the excise duty to the buyers and, therefore, under Section 11-B of the Central Excise and Salt Act, 1944, (hereinafter referred to as the Act) the respondent was required to prove beyond doubt that the burden of excise duty had not been passed on to the buyers so as to entitle it to claim refund. 9.In its reply dated 24th August, 1996 the respondent denied that the excise duty had been correctly paid and, therefore, they were not entitled to claim refund. They reiterated their claim for refund and prayed for further time to furnish a detailed explanation. However, it appears from the order of the Assistant Commissioner that no further explanation was furnished by the respondent. 10.The Assistant Commissioner by order dated 10th January, 1997 rejected the claim of the respondent following an order passed by the Assistant Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of manufacturing undertaken by the claimant, or whether the observations made in the order were based on authoritative publications or on his personal knowledge. 13.The respondent preferred an appeal before the Commissioner of Excise (Appeals). The said appeal was dismissed by the Commissioner who fully agreed with the reasoning of the Assistant Commissioner and also held that the judgment of the Supreme Court referred to in the claim application was not relevant in view of the introduction of the new tariff which classified separately hot rolled and cold rolled strips. It also agreed with the finding of the Assistant Commissioner that the application for refund deserved to be rejected also on the ground of unjust enrichment as the burden of duty had been passed on to the buyers. 14.We may observe that though the Commissioner of Excise (Appeals) rejected the claim also on the ground of the respondent having passed on the burden of duty to the buyers, the Assistant Commissioner did not record any finding in this case on that question, having regard to the provision of Section 11B of the Act. 15.The respondent preferred an appeal before the Tribunal impugning the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence in this regard and the observations made by the Assistant Commissioner it its order are based either upon his own knowledge or knowledge derived from text-books or publications, which were not relevant. Relying upon the earlier decision in Steel Strips (supra) it was submitted that in a case where the Excise authorities contend that an article is the result of the process of manufacture and it is commercially distinct and known as such, it is for the Excise authorities to lay evidence in this behalf before the first adjudicating authority regardless of the fact that he is an officer of the Excise department. There should, ordinarily, be no difficulty in establishing that the article is the result of a process of manufacture; in the event of difficulty, it would be open to the Excise authorities to seek a direction requiring the assessee to set out in writing what it does to obtain the article. Failure to lay the requisite evidence cannot be made up by reference to authoritative publications. 19.In the instant case we find that while in the order of the Assistant Commissioner there is a reference to a process of manufacture undertaken by the respondents and there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents. In the aforesaid judgment this Court, after noticing the observations in Lal Woollen & Silk Mills (P) Ltd., Amritsar (supra) held : "However, it appears to us that the observation made in this authority are "per incuram." In so observing, the decision of a Larger Bench of this Court in the case of Collector of Central Excise, Indore v. Universal Cable Ltd. reported in 1995 Supp (2) SCC 465, has not been noted or considered. In this case an argument that a good become excisable because it is covered by Tariff Entry, has been negatived. In the case of B.P.L. Pharmaceuticals Ltd. v. Collector of Central Excise reported in 1995 Supp (3) SCC 1 it has also been held that merely because there is a change in the tariff Item the goods does not become excisable. Subsequently in a judgment dated 13 February, 2003 in Civil Appeal No. 6745 of 1999 it has been held that merely because an item falls in a Tariff Entry, it does not become excisable unless there is manufacture and the goods is marketable. In Lal Woollen & Silk Mills case (supra) it has not been held that the twin test of manufacture and marketability is not to apply. It is not possible to accept the contention that me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... burden of duty of excise to their buyers, which question has to be considered in the light of the provisions of Section 11B of the Act, it is only appropriate that the Assistant Commissioner concerned should first record a finding on that question. If the finding is against the respondents, their claim applications shall have to be rejected. This, of course, is subject to the order that may be passed in appeal by the appellate authority and ultimately by the Tribunal. Only if it is ultimately found that the respondents have not passed on the burden of excise duty to their buyers, the other questions which we have remitted to the Tribunal may require consideration. We, therefore, direct that in the first instance those appeals shall stand remitted to the concerned Assistant Commissioners to hear the parties and decide only the question of unjust enrichment having regard to the provisions of Section 11B of the Act. It will be open to the respondents to challenge the finding if it goes against them before the appellate authority and/or before the Tribunal. If no appeal is preferred against an adverse finding by the Assistant Commissioner, that will be an end of the matter and no furth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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