Custom, Excise & Service Tax Tribunal
C.C.E., Meerut I vs M/S Modi Rubber Ltd on 6 April, 2010
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-III Date of hearing/decision: 6.4.2010 Central Excise Appeal No.346 of 2008-SM Arising out of the order in appeal No.197-CE/MRT-I/07 dated 30.10.2007 passed by the Commissioner(Appeals), Central Excise, Meerut. For Approval and Signature: Honble Shri M. Veeraiyan, Technical Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? Yes 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? yes 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes C.C.E., Meerut I Appellant Vs. M/s Modi Rubber Ltd. Respondent
Appearance:
Shri S.Gautam , Authorized Departmental Representative (SDR) for the Revenue and Shri Ajay Agarwal, Advocate for the respondent Coram: Honble Shri M. Veeraiyan, Member (Technical) Oral Order No.____________________ Per M. Veeraiyan:
This is an appeal against the order of Commissioner (Appeals) No. 197-CE/MRT-I/07 dated 30.10.2007.
2. Heard both sides.
3. The case has long background history. The respondents were purchasing tyre cord fabrics and the suppliers have paid duty under erstwhile Tariff Item 68 and the appellants have availed set-off of duty in terms of Notification No.201/79. The Department felt that the classification of the said tyre cord fabrics should have been under Chapter 22 and not under Tariff Item 68 and therefore, the credit taken by them was incorrect. The Department issued show cause notices dated 16.2.81 and 10.3.81 and the respondent agitated the matter and finally got a favourable order from the High Court of Delhi vide order dated 28.2.2002. Meanwhile, in a process to reduce the litigation with the Department, without prejudice to their rights in writ petition, the respondents deposited an amount of Rs.2,24,068.75 vide TR-6 challan No. 5.12.86. Subsequently, in pursuance of the favourable order dated 28.2.2002 of the High Court of Delhi, the respondents preferred refund claim which was rejected by the original authority with the following findings:-
I find that the party filed the refund claiming it as a consequential relief in view of Honble Delhi High Court order dated 28.2.2002 passed in the matter of Civil Writ Petition No.1371/81. I observe that in spite of issue of deficiency note dated 30.4.03, the party failed to submit requisite documents till date, inasmuch as despite passage of considerable time the original authority essential for verification of the refund claim were not produced and they submitted photocopy of challan under which the amount of Rs.224068.75 was deposited . The party in their submissions has stated that the bar of unjust enrichment is not applicable in this case. I find that they failed to put forth any documentary evidence to the effect that no credit of the amount deposited vide TR-6 dated 5.12.86 was availed in PLA and utilised by them towards discharge of duty liability on the goods manufactured by them. In the absence of these vital documents the claim of the party that they have not passed on the incidence of duty on their customers, cannot be verified. However, on appeal by the party, the Commissioner (Appeals) allowed the refund.
4. The learned SDR reiterates the finding and reasoning of the original authority and the grounds of appeal.
5. Learned Advocate strongly supports the order of the Commissioner (Appeals).
6. I have carefully considered the submissions from both sides and perused the records. At the outset, it is to be noted that the refund claim has been processed in pursuance of the order of the Honble High Court of Delhi. The basis for the doubt expressed by the original authority that the respondents having paid the disputed amount vide TR-6 challan on 5.12.86 might have taken the same in PLA is not revealed. Such a doubt entertained without basis cannot shift the onus entirely on the respondents. Commissioner (Appeal) taking into account that the assessee was filing periodical returns which also indicated the credit taken on the PLA has come to the conclusion that there was no basis for entertaining such doubt. She has also taken into account the certified copy of the TR-6 challan issued by the bank. The other grounds on which the order of the Commissioner (Appeals) are challenged relates to the issue of unjust enrichment. The finding of the Commissioner (Appeals) in this regard is reproduced below:-
As far as the issue whether the incidence of duty has been passed on to the customers or not by the appellants, I find that the appellants were purchasing tyre cord fabric under TI 68 after payment of duty and were taking set off credit of the duty amount under Notification No.201/79. They were also taking credit of duty paid on inputs used in nil duty paid tyre/tubes. The Department issued two show cause notices dated 16.2.81 and 10.3.81 where were set aside by the Honble Delhi High Court on 28.2.2002. Therefore, the question of passing on of duty incidence to the customers as far as set off is concerned , becomes irrelevant.
7. It is also observed that the demand proposed in the show cause notices was on the ground that the suppliers of the inputs namely tyre cord fabric have paid duty classifying the product under TI-68 instead of Chapter 22. It is not the case of the Department that any action was taken at the suppliers end. Under these circumstances, variation of the credit taken by the respondents at the hands of the recipient was not justified. In the given facts and circumstances of the case, I do not find any infirmity in the order of the Commissioner (Appeals). The grounds of appeal by the Department do not disclose any material which can adversely affect the factual finding of the Commissioner (Appeals).
8. In view of the above, I do not find any merit in the appeal. The appeal is, therefore, rejected.
(M. Veeraiyan) Member (Technical) scd/ 3