Custom, Excise & Service Tax Tribunal
Nrc Ltd vs Commissioner Of Central Excise, ... on 9 March, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. E/724 &725/2011 (Arising out of Order-in-Appeal No. SB(952-53)/Th-I/2011 dated 28.1.2011 passed by the Commissioner (Appeals) Central Excise, Mumbai-I ) For approval and signature: Honble Shri Ramesh Nair, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
======================================================
NRC Ltd.
:
Appellant
VS
Commissioner of Central Excise, Thane-I
:
Respondent
Appearance
Ms. Padmavati Patil, Advocate for Appellant
Shri Ashutosh Nath, Asstt. Commr. (A.R) for respondent
CORAM:
Honble Shri Ramesh Nair, Member (Judicial)
Date of hearing : 9/03/2016
Date of decision: 9/03/2016
ORDER NO.
These appeals are directed against Order-in Appeal No. SB(52-53)52-53/Th-I/2011 dt. 28.1.2011 passed by the Commissioner (Appeals) Central Excise Mumbai Zone-I whereby the Ld. Commissioner upholding the Order-in-Original No. 117/07-08 dt. 10.3.2008 & 01/RN/TH-I/2008 dt. 21.11.2008, rejected the appeal filed by the appellant.
Appeal No. E/725/2011-Mum is on the issue of rejection of refund claim on the ground of unjust enrichment and Appeal No. E/724/2011-Mum is on the issue of recovery of the erroneous refund of the same amount.
2. The fact of the case is that the appellant manufactured and sold the goods to their wholesale buyers under Quantity Rebate Scheme and paid the duty on the value prevailing at the time of clearance of the goods under Section 4 of the Act. However, under the Quantity Rebate Scheme, after supply of the goods the appellant allowed the quantity discount to their buyer. In respect of the quantity discount, credit notes for the amount of discount along with duty paid thereupon were issued. In respect of these excess paid duty on the quantity discount, the appellant filed refund claim which in the first round was sanctioned by the adjudicating authority, however retained the amount with the department, on the ground that the appellant could not produce any evidence that the buyer of the goods have reversed the modvat credit. The appellant aggrieved by the various Orders-in-Original filed appeal before the Commissioner (Appeals), Meanwhile, the appellant also filed Writ Petition before the Honble High Court, the High Court ordered that if the Cenvat Credit were not reversed the said amount should be added back to the assessable value and only for the remaining amount the matter was remanded to the original authority. The appellant filed a fresh refund claim on 5.12.2003 for an amount of Rs. 11,02,438/-. The adjudicating authority vide OIO No. 224/03-04 dt. 23.3.2004 recovered an amount of Rs.1,66,731/- from the sanction amount and allowed to take credit of Rs.9,35,707/- in the Cenvat credit account. Aggrieved by the said OIO dt. 23.3.2004, the Revenue filed appeal before the Commissioner (Appeals), Commissioner (Appeals) vide OIA No. BR/137/Th-I/05 dt.1/7/2005 who rejected the departments appeal on the ground that the plea of unjust enrichment were not taken by the department at any time and the said point was also not raised in the show cause notice and also not dealt in the Order-in-Original by the adjudicating authority, and department cannot go beyond the scope of show cause notice. The said Order-in-Appeal was challenged by the Revenue before the Tribunal the Tribunal remanded the matter to the original authority to consider the matter in the light of Sahakari Khand Udyog 2005 (181) ELT 328 (S.C.). In the de novo proceedings, the adjudicating authority vide Order-In-Original No. 01/RN/Th-I/2008 confirmed the demand of Rs.9,35,707/- along with interest. The said OIO was challenged before the Commissioner (Appeals) by the appellant, the Commissioner (Appeals) rejected the appeal therefore the appellant is before me.
3. Ms. Padmavati Patil Ld. Counsel appearing for the appellant submits that the refund was rejected only on the ground of unjust enrichment. She submits that there is no dispute in respect of quantity discount. The appellant have subsequently issued credit note not only for the discount amount but also for the duty attributed and paid on the said discount. On the basis of this credit note the amount of discount and duty thereof has been credited to the buyer, therefore incidence of duty for which the refund was sought for has not been passed on initially while sanctioning the claim, this fact was not disputed in the impugned order and Order-in-Original. The refund was rejected only on the ground that no documentary evidence was produced in the Tribunal, it was observed that only two credit slips produced. She submits that all the credit note and relevant documents were produced right from beginning along with refund application. She submits that the Chartered Accountant had also certified that the incidence of duty paid on discount amount has not been passed on to any other person. On the basis of this fact, it is clear that the claim is not hit by unjust enrichment. She placed reliance on the following judgments:
(i) Triveni Glass Ltd. Vs. Commissioner of Central Excise, Allahabad 2003 (162) E.L.T. 529 (Tri.-Del.) Upheld by SC-2015-(320)ELT A-338(SC)
(ii) Sunrays Engineers Pvt. Ltd. Vs. Commissioner of C.Ex.Jaipur 2015 (318) E.L.T. 583 (S.C.)
(iii) Commissioner of Central Excise, Pune-I Vs. Sandvik Asia Ltd.
2015 (323) E.L.T. 431 (Bom.)
4. On the other hand, Shri Ashutosh Nath, Ld. Asstt. Commr. (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that in the Tribunals remand order, it is clearly observed that the appellant have not submitted all the necessary documents by which it can be proved that incidence of refund amount has not been passed on to any other person. In the Order-in-Original as well as the impugned order. It was observed that no documentary evidence were submitted, therefore the appellant could not establish that the incidence of refund amount has not been passed on to any other person. He placed reliance on the following judgments:
(i) M/s. Fenner India Ltd. Vs. CESTAT 2015-TIOL-2203-HC-MAD-CX
(ii) M/s. Fenner India Ltd. Vs. CESTAT, Chennai 2014 (305) E.L.T.524 (Mad.)
(iii) M/s. Videocon International Ltd. Vs. CCE 2014-TIOL-50-CESTAT-MUM
(iv) Grasim Industries Ltd. Vs. CCE 2011 (271) E.L.T. 164(S.C.)
5. I have carefully considered the submissions made by both the sides. I find from the perusal of records, there is no dispute on the fact that the appellants have passed on the quantity discount to their buyer against the clearance of the goods and in respect of that discount, the appellant had issued credit notes for the amount of discount along with the duty paid thereon. In the initial proceedings, the adjudicating authority had sanctioned the refund, the refund could have been sanctioned only if it is established that the discount has been passed on to the buyer. Therefore at this stage, it cannot be doubted that the appellants have not passed on the discount to the buyer. I am of the considered view, that if the discount along with the duty paid thereon has admittedly been passed on to the buyer and credit notes for which has been issued, this is sufficient evidence that incidence of duty paid on the discount amount has not been passed on. However, the lower authority mentioned in the order that the appellants have not produced all the credit notes. In these circumstances, I have no option to remand the matter to the adjudicating authority to decide the matter afresh on the basis of credit notes submitted or to be submitted by the appellant along with the Chartered Accountant Certificate produced by the appellant. On verification of the credit notes and the genuineness of the same, the refund can be allowed to the appellant. The adjudicating authority shall dispose of the de novo adjudication within a period of three months from the receipt of this order. The appellant shall be given sufficient opportunity of personal hearing as well as for producing the documents. The appeal is allowed by way of remand. As regard appeal No. E/724/2011 it is in respect of the recovery of the refund amount involved in the appeal No. E/725/2011. The recovery of refund is consequential to the rejection of refund claim, therefore this appeal is also remanded to the original authority to decide after deciding the refund matter. Both the appeals are disposed of by way of remand to the original adjudicating authority.
(Pronounced & Dictated in court) (Ramesh Nair) Member (Judicial) SM.
7Appeal No. E/724 &725/2011