Customs, Excise and Gold Tribunal - Delhi
Inalsa Appliances Ltd. vs Cce on 9 June, 2004
Equivalent citations: 2005(99)ECC325, 2004(175)ELT893(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. The issue involved in this appeal, filed by M/s. Inalsa Appliances Ltd., is whether they are eligible to challenge the Assessment Order being a customer of the excisable goods and claim consequently refund of Central Excise duty.
2. Shri Pravin Sharma, learned Advocate, submitted that the appellants manufacture food processors on which Central Excise duty is payable on the basis of maximum retail price under Section 4A of the Central Excise Act; that during the period from May 2000 to November 2000, they had given centrifugal juicers/citrus juicers free of cost to their customers purchasing their food processors; that they were purchasing the juicers from M/s. AAR AAR Plastics, Faridabad, who were discharging the duty liability on the said juicers under Section 4A of the Central Excise Act. However, in fact, the assessment is not to be made on the basis of MRP as the juicers did not have any electric motor attached to them and they were not covered by the provisions of Section 4A of the Central Excise Act in terms of Notification No. 9/2000 (Serial No. 54); that due to this wrong understanding of M/s. AAR AAR Plastics, Central Excise Duty amounting to Rs. 13,34,399.98 had been paid in excess and as the incidence of the said duty has been passed on to the appellants, they filed a refund claim with the Department on 17.1.2001, which has been rejected by both the lower authorities. The learned Advocate, further, submitted that the incidence of duty was borne by the appellants as juicers were given free of cost by them to their customers on the purchase for their product "food processors" having MRP at Rs. 3,600; that as such there is no case of unjust enrichment inasmuch as entire burden of duty paid in excess has been borne by them; that under Section 11B of the Central Excise Act, the appellants, as a customer, are eligible to claim the refund of Central Excise duty born by them; that accordingly, they are having the statutory right to claim the refund of the duty paid in excess to the Department. He relied upon the decision in the case of V.S.T. Precision Components Ltd. v. CCE, Bangalore, 2003 (157) ELT 493 wherein it has been held that the customer is entitled to claim refund of Central Excise duty under Section 11B of the Central Excise Act. Finally, the learned Advocate relied upon the judgment of the Supreme Court in the case of CCE v. Allied Photorgraphics (India) Ltd., 2004 (92) ECC 777 (SC): 2004 (166) ELT 3, wherein it has been held "that the basis on which a manufacturer claims refund is different from the basis on which a buyer claims refund......Consequently, it is not open to the buyer to include the refund amount in the cost of purchase on the date when he buys goods as the right to refund accrues to him at a date after completion of the purchase depending upon his success in the assessment.......Section 1113 (2) (e) conferred a right on the buyer to claim refund in excess where he proved that he had not passed on the duty to any other person. The entire scheme of Section 11B showed the duty difference between the rights of a manufacturer to claim refund and the right of the buyer to claim the refund as separate and distinct". The learned Advocate, therefore, contended that the appellants have rightly claimed the refund of duty which has been paid in excess to the Department.
3. Countering the arguments, Shri Virag Gupta, learned DR, submitted that admittedly the appellants have purchased centrifugal juicers/citrus juicers from M/s. AAR AAR Plastics who have discharged the duty liability on the basis of MRP under Section 4A of the Central Excise Act; that it is not the case of appellants that the assessment of duty made in the case of AAR AAR Plastics has been challenged by M/s. AAR AAR Plastics and it has been finally decided that there was mistake in assessment and the duty has been paid in excess; that the refund of the duty to the customers will arise only after assessments have been challenged and it has been decided that there was payment of duty in excess; that Section 11B of the Central Excise Act comes into operation only when a person claims the refund of any duty of excise; that in the present matter, the appellants are challenging the assessment of the excisable goods manufactured and cleared by M/s. AAR AAR Plastics and claiming the consequential refund; that under the law, the appellants cannot challenge the assessment of the excisable goods manufactured by someone else, that under Section 35 of the Central Excise Act, the appeal can be filed only by any person who is aggrieved by any decision or order passed under the Central Excise Act; that as per the decision of the Supreme Court in the case of Northern Plastics Ltd. v Hindustan Photo Films Mfg. Co. Ltd., 1997(58) ECC 59 (SC): 1997 (91) ELT 502 (SC), a person aggrieved must be a man who has suffered a legal grievance, a man against whom a decision has pronounced which has wrongfully deprived him of something; that it has been further held by the Supreme Court that the words "person aggrieved" do not really mean a man who is disappointed of a benefit which he might have received if some other order had been made. The learned DR, further, submitted that it has been held by the Supreme Court in the case of CCE, Kanpur v. Flock (India) Pvt. Ltd., 2000 (71) ECC 4 (SC): 2000 (120) ELT 285 (SC), that where the party aggrieved had not chosen to exercise the statutory right of filing the appeal, it is not open to the party to question the correctness of the order of the Adjudicating Authority subsequently by filing a refund on the ground that the Adjudicating Authority had committed error in passing the order; that if this position is accepted, then the provisions of adjudication in the Act and the Rules and the provisions for appeal in the Act and the Rules will lose their relevance and the entire exercise will be rendered redundant. He, therefore, contended that the appellants are not eligible to challenge the assessment of the excisable goods manufactured and cleared by a third party and claim consequential refund.
4. We have considered the submissions of both the sides. The juicers in question were manufactured and cleared by M/s. AARAAR Plastics. Nothing has been brought on record to show that the payment of duty on the basis of maximum retail price under Section 4A of the Central Excise Act in respect of the impugned juicers has been challenged by M/s. AAR AAR Plastics. It is settled law that the assessment of the goods cannot be challenged at the end of the receivers of the goods. As till this time, the assessments had not been challenged, the duty of excise paid by the manufacturer has been correctly paid. This was the judgment pronounced by the Supreme Court in the case of Flock India Pvt. Ltd. (supra). It is not open to the appellants to challenge the assessment of the goods which have not been manufactured by them nor cleared by them. As a customer, they have the right to claim the refund of Central Excise duty if any refund is first admissible. In the present matter, the refund has not arisen as the assessment of the goods, in question, has not been challenged. In absence of any excess payment of duty, the question of the appellants filing a refund claim does not arise. In the case of Allied Photographies India Ltd., relied upon by the learned Advocate, the Supreme Court has held that "Section 11B deals with the claim for refund of duty. It did not deal with the making of refund. In the present matter, what the appellants are doing is "making of refund" by challenging assessment of goods manufactured and cleared by a third party. We, therefore, find no merit in the present matter and reject the appeal.