Custom, Excise & Service Tax Tribunal
The Commissioner Of Central Excise & ... vs M/S. Crane Betel Nut Powder Works on 25 January, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH AT BANGALORE Appeal No: E/2203/2010 & Cross Objection No.: E/CO/146/2010 (Arising out of Order-in-Appeal No: 43/10 (G) CE dated 6.8.2010 passed by the Commissioner of Central Excise & Customs (A), Guntur.) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordship wish to see the fair copy of the Order? Seen 4. Whether Order is to be circulated to the Departmental authorities? Yes The Commissioner of Central Excise & Customs Guntur. Appellant Vs. M/s. Crane Betel Nut Powder Works Respondent
Appearance Shri D. P. Nagendra Kumar, JCDR for the revenue.
Shri K. Parameshwaran, Advocate for the respondent.
CORAM SHRI M. V. RAVINDRAN, HONBLE MEMBER (JUDICIAL) SHRI P. KARTHIKEYAN, HONBLE MEMBER (TECHNICAL) Date of Hearing: 25.01.2011 Date of decision: 07.02.2011 FINAL ORDER No._______________________2011 Per Shri M. V. Ravindran This appeal is filed by the revenue against Order-in-Appeal No.43/2010 (G) CE dated 6.8.2010.
2. The relevant fact that arise for consideration is that the respondent-assessee herein had filed the refund claim of the duty paid under protest during the period 25.7.1997 to 10.5.2004. The refund claim was filed by the assessee on the ground that they had paid duty under protest, consequent to the judgment of the Honble Supreme Court in the assessees own case in Civil Appeal No.1453/2007 dated 19.3.2007 as reported at 2007 (210) ELT 171 (SC). The said refund claim was verified and a show cause notice dated 5.8.2008 was issued to the respondent-assessee directing them to show cause as to why the said refund claim be not rejected. The respondent-assessee contested the show cause notice before the Adjudicating Authority and adduced evidences in the form of Chartered Accountants certificate and balance sheet. The Adjudicating Authority held that the respondent-assessee are eligible for refund of the amount claimed, but held that, since the respondent-assessee has not proved that the burden has not been passed on to their buyers, credited the same to the Consumer Welfare Fund. Aggrieved by such an order, the assessee preferred an appeal before the learned Commissioner (A) and the learned Commissioner (A) has set aside the impugned order and allowed the appeal. Aggrieved by such an order, revenue is before us.
3. The learned JCDR assailed the impugned order on the various grounds. It is the submission that the respondent-assessee paid the Central Excise duty under protest and the amount of duty has been specifically charged in the invoices. It is his submission that once the amount has been charged in the invoices, respondent-assessee has collected the same from its buyers. It is also his submission that the Central Excise duty has been specifically charged in the P & L Account, would only prove that the Excise element has gone into the cost of product and recovery from their customers through sale proceeds. It is his submission that the Chartered Accountants certificate dated 2.5.2008 produced by the respondent-assessee before the lower authorities certifies that the pricing pattern of the assessee remained the same during the period 1993-94 to 2005-06 and the said certificate also indicates that the assessee has absorbed Central Excise duty is without any trace of evidence other than the claim of price remaining constant. It is his submission that the certificate which is issued by the statutory auditors of the assessee does not indicate that there has been an auditors note on the balance sheet that the respondent-assessee has been absorbing the Central Excise duty element and not passing on to their buyers. It is his submission that annexures annexed to the Chartered Accountants certificate clearly show that the price recovered from the customers was inclusive of Central Excise duty. It is his submission that in the case of Xerox Modicorp. Ltd. - 2001 (134) ELT 523 (Tri.-Del.), the Tribunal has laid down clearly that once the assessee has charged the Central Excise duty separately to the customers in the copies of the gate passes and invoices filed by them and the customer has paid this amount to the respondent-assessee as duty of excise, hence, it cannot be said that incidence of duty is borne by the assessee. It is his submission that the said order of the Tribunal was affirmed by the Supreme Court as reported at 2002 (142) ELT A173 (SC). It is his submission that the decision of the Constitution Bench of the Honble Supreme Court in the case of Mafatlal Industries Ltd. - 1997 (89) ELT 247 (SC) and more specifically in para 91 would apply in this case. It is his submission that the Honble Supreme Court in the case of Allied Photographics India Ltd. - 2004 (166) ELT 3 (SC) had held that the stability of price is not proof that the incidence of duty of excise has not been passed on to the customers. He would submit that based upon this judgment, there are series of judgments of this Tribunal holding the same view. It is his submission that in the case of Rajasthan Spinning and Weaving Mills Ltd. - 2006 (194) ELT 254 (Tri.-Del.), the Tribunal has held that by debiting of an expenditure to Profit and Loss Account and appropriation of the same to the sale proceeds would amount to recovery of the same from the buyers and hence, unjust enrichment gets attracted. He would also submit that in the recent judgment of the coordinate Bench in the case of Philips Electronics India Ltd. - 2010 (257) ELT 257 (Tri.-Mumbai), the coordinate Bench has held that when the amount has been shown in Profit and Loss Account, it must have been factored into price of goods manufactured and accordingly, refund is hit by unjust enrichment. He relies upon the series of case-laws as given below:
(ii) Crompton Greaves Ltd. - 2009 (246) ELT 409 (Tri.-Mumbai)
(iii) Charu Home Products Pvt. Ltd. - 2009 (244) ELT 465 (Tri.-Mumbai)
(iv) Hanil Era Textiles Ltd. - 2008 (225) ELT 117 (Tri.-Mumbai)
(v) Skycell Communications Ltd. - 2007 (216) ELT 702 (Tri.-chennai)
(vi) Inn-Venue Hospitality Management P. Ltd. - 2008 (225) ELT 500 (Tri.-Mumbai)
(vii) India Agencies - 2007 (212) ELT 507 (Tri.-Chennai)
(viii) Sindhur Beedi Works - 2009 (238) ELT 165 (Tri.-Chennai)
(ix) Sony Udyog Vs. CCE, Indore - 2003 (159) ELT 413 (Tri.-Del.)
(x) Toyota Kirloskar Motors Ltd. 2010 (256) ELT 216 (Kar.)
4. Countering the arguments raised by learned JCDR, the learned counsel appearing on behalf of the respondent-assessee submits that the revenue has filed the appeal without appreciating the factual position and the appeal is erroneous and is on misconceived grounds. It is his submission that there is no dispute that the refund claim filed by the respondent-assessee was a consequential relief, in view of the judgment of the Honble Supreme Court in their own case. It is his submission that the foremost ground of the revenue that in terms of Section 12A of the Central Excise Act, the duty element which is shown in the invoices raised by the respondent-assessee must have been collected and the incidence of duty has been passed on to the buyer. It is his submission that the provisions of Section 12A of Central Excise Act provides for separately indicating in all the documents the amount of duty which is to be paid and which should form a part of the price thereto. It does not in any way provide for a conclusion that once duty is indicated separately, it is to be assumed to have been passed on. It is his submission that this proposition is baseless, misconceived and has to be read harmoniously with Section 12B which stipulates that any person who is claiming the refund has to rebut the provisions of unjust enrichment. It is his submission that all judgments which have been relied upon by the learned JCDR are on a different set of facts wherein the invoices indicated a cum-duty price. He would submit that in the instant case, the invoices were issued as per the provisions of the statute, but evidence was led to indicate that the duty which has been shown on the invoices was not collected by the respondent-assessee. It is his submission that the Chartered Accountants certificate which was produced before both the lower authorities is not disputed by both the lower authorities by leading any contrary evidence. He would submit that the reliance placed by the JCDR in the case of Allied Photographics India Ltd. (supra), wherein there is a factual findings recorded in that case and analyzed in detail by the Supreme Court. It is his submission that in the assessees own case in an identical set of facts of allowing refund claim was challenged before this bench as reported at 2007 (219) ELT 682 on the very same grounds which are taken today. It is his submission that this Bench has upheld the order of the learned Commissioner (A) in that case. It is his submission that the said case is still binding on this Bench as the Honble High Court of Andhra Pradesh has only admitted the appeal filed by the revenue. It is his submission that the Honble High Court of Punjab and Haryana in the case of CCE, Gurgoan Vs. Uni products (India) Ltd.- 2009 (238) ELT 735 (P&H) has clearly held that the declaration in invoices is in pursuance to the statutory requirements. He would also submit that this bench in the case of CCE, Mysore - Premier Aryco India Ltd. - 2010 (260) ELT 158 (Tri.-Bang.) has held in favour of the assessee relying upon the costing data and demonstration by the assessee that the burden was not passed on to the consumer. He would submit that in the present case, Chartered Accountant who gave the certificate of non-passing of burden of duty, has clearly recorded stating that the said certificate is given after going through the records of the appellants and the invoice copies and other records. It is his submission that in a peculiar facts and circumstances of this case, the case laws cited by the learned JCDR will not be applicable. It is his submission that the learned Chartered Accountants certificate is not vague, inasmuch as the same has been issued after considering the various records and supported by necessary particulars and revenue has not produced any contrary evidence to this evidence led by the respondent-assessee.
5. We have considered the submissions made at length by both sides and perused the records and the case laws submitted by both sides.
5.1 At the out set, we would like to record the factual matrix of the case which is that the respondent-assessees filing of refund claim has arisen on the ground that the Honble Supreme Court has held that their products are not manufactured products. During the relevant period in this case, the respondent-assessee had discharged the duty liability under protest. The respondent-assessee has undoubtedly raised the invoices indicating the amount of duty on the invoices as per the requirement of the statute under Section 12A of the Central Excise Act, 1944. It is also undisputed that the respondent-assessee had produced a detailed Chartered Accountant certificate before the Adjudicating Authority, when the Adjudicating Authority issued a show cause notice to them for rejection of the refund claim. It is also undisputed and on records that the revenue had not produced any contrary evidence to evidence produced by the respondent-assessee in form of Chartered Accountant certificate for coming to such a conclusion that the respondent-assessee had passed on the burden to the customers.
5.2 Based upon the factual matrix as indicated hereinabove, we would like to record, that as regards the provisions of Section 12A, we find that the Honble High Court of Punjab and Haryana in the case of Uniproducts (India) Limited (supra) has held as under:
9.?In pursuance to Rule 52A of the Rules the assessee is required to furnish various particulars/declarations as per Serial No. (ix) to (xiii) of the proforma as reproduced above. It is not a case where the assessee had paid any duty and recovered the same. The declaration in the invoice is in pursuance of statutory requirement. Therefore, the doctrine of undue enrichment would not be attracted to the facts of the present case. The appeal is wholly mis-conceived and the same is liable to be dismissed. 5.3 We find that the learned Commissioner (A) while allowing the appeal of the appellant and granting them the refund claim has relied upon the Chartered Accountants certificate which reads as under:
It is seen from the records that as against the above detailed Chartered Accountants certificate, revenue has not produced any contrary evidence to rebut the same except for claiming that the said certificate is devoid of any details. We find that the said Chartered Accountants certificate as reproduced hereinabove clearly indicates that the Chartered Accountant (who was also the statutory auditor of the respondent-assessee) has given the certificate after going through the entire records of the respondent-assessee. In the absence of any effective rebuttal of the said Chartered Accountant certificate by leading a contrary evidence, we are of the considered view that the Chartered Accountants certificate which indicates that the duty liability has not been passed on and has been absorbed by the assessee, cannot be rejected as an evidence in support of non-passing of the burden of incidence of duty.
5.4 Be that as it may, we find that this Bench in the respondent-assessees own case vide Final Order No.483/2007 dated 23.4.2007 in Appeal No.E/48/2005 has held as under:
Revenue has filed this appeal against Order-in-Appeal No. 70/2004, dated 12-10-2004 passed by the Commissioner of Customs and Central Excise (Appeals), Guntur.
2.?The issue relates to the granting of refund claim to the respondent. There was dispute with regard to the dutiability of pan masala. The Department insisted that they have to clear the goods on payment of duty. Therefore, the Respondents cleared the goods on payment of duty. Ultimately, the issue was decided in favour of the Respondents. Consequently, the Respondents filed the refund claim. The lower authorities examined the claim and granted the same. The Commissioner (A) in the impugned order has also upheld the decision of the lower authority. Hence, the Revenue has come in appeal on the following grounds :
(i) The Commissioner has erred in holding that the incidence of duty had not been passed on to the consumers based on the ground that the price of the goods remained the same before and after levy of duty.
(ii) The above decision is wrong because in the invoices issued by the respondent, there is mention of excise duty and the respondent reduced the dealers price to the extent of excise duty component, which clearly proves that the incidence of excise duty has been passed on to the dealers.
(iii) The following case laws are relied on :
(a) CCE v. Gopi Synthetics Ltd. - 2004 (164) E.L.T. 172 (Tri.-Mumbai.)
(b) Xerox Modicorp Ltd. v. CCE, Mumbai - 2001 (134) E.L.T. 523 (Tri.-Del.)
(c) CCE, Mumbai v. Kores India Ltd. - 2003 (156) E.L.T. 1036 (Tri.-Mumbai)
(d) JCT Limited v. CCE, Chandigarh-II - 2004 (163) E.L.T. 467 (Tri.-Del.).
3.?We heard both the sides. The lower authority after perusing the invoices had come to the conclusion that the incidence of duty has been borne by the respondents. He has also taken into account the certificate issued by the Chartered Accountant. The fact that the price of the impugned products before the levy and after the levy remained the same is significant for deciding whether there is unjust enrichment. When the respondent reduced the dealers price, it is very clear that they have taken upon themselves the burden of excise duty. The fact that excise duty was shown in the invoice is not conclusive evidence to say that the excise duty burden has been passed on to the buyers. Hence, the inference of Commissioner in grounds of appeal (vi) is not correct. There are several decisions, which hold that when the Chartered Accountant certifies that the duty burden has not been passed on to the buyers, the same has to be accepted. On going through the impugned order and also the order of the lower authority we do not find any infirmity. We are convinced that there is no unjust enrichment in the present case. Hence, Revenues appeal is rejected. It can be seen from the above reproduced order of this Bench, the issue before the very same Bench was identical to the issue which is before this bench. It can also be seen that the grounds which are taken by the revenue in this case are identical to the grounds urged in that case. We are of the considered view that the decision of a coordinate bench is binding, more so, if facts are same and is in the assessees own case.
5.5 We find that Honble Supreme Court while disposing Civil Appeal No.9439/2003 in their judgment dated 18th October 2010 had laid down the principle of law which is as under:
18. A coordinate bench cannot comment upon the discretion exercised or judgment rendered by another coordinate bench of the same court. The rule of precedent is binding for the reason that there is a desire to secure uniformity and certainty in law. Thus, in judicial administration precedents which enunciate rules of law form the foundation of the administration of justice under our system. Therefore, it has always been insisted that the decision of a coordinate bench must be followed. (Vide: Tribhovandas Purshottamdas Thakkar v. Ratilal Motilal Patel & Ors., AIR 1968 SC 372; Sub-Committee of Judicial Accountability v. Union of India & Ors., (1992) 4 SCC 94; and State of Tripura v. Tripura Bar Association & Ors., (1998) 5 SCC 637).
19. In Rajasthan Public Service Commission & Anrs. V. Harish Kumar Purohit & Ors., (2003) 5 SCC 480, this Court held that a bench must follow the decision of a coordinate bench and take the same view as has been taken earlier. The earlier decision of the coordinate bench is binding upon any latter coordinate bench deciding the same or similar issues. If the latter bench wants to take a different view than that taken by the earlier bench, the proper course is for it to refer the matter to a larger bench. 5.6 It is also seen that the Honble High Court of Bombay in Criminal Application No.4230 of 2006 vide their judgment dated 18th December 2006 have held as under:
5. To say the least, the learned Additional Sessions Judge has committed a grave error in not following the binding precedent. The precedent does not cease to be binding merely because in the opinion o the learned Judge, the same is challenged in the Supreme Court and its operation stayed by the Supreme Court. In the decision reported in A.I.R 1992 Supreme Court Page 1439 in the case of M/s. Shree Chamundi Mopeds Ltd. v/s. Church of South India Trust Association, Madras, the Honble Supreme Court has very succinctly pointed out the difference between a judgment being quashed and set aside and its operation stayed by the higher court. The judgment being stayed does not wipe it out unless and until it is so wiped out, it continues to be binding on the lower and subordinate courts. Thus, the learned Judge ought to have decided the application on the touch stone of the law laid down by this court as also the Honble Supreme Court in other decisions brought to his notice.
6. Since the Bench has held that the learned Commissioner (A)s order in that case was correct, we have no hesitation in holding that the learned Commissioner (A)s order impugned before us in this appeal is correct and legal and we do not find any infirmity. We are convinced that there is no unjust enrichment.
7. We find that the respondent-assessee has filed a cross objection to the appeal filed by the revenue. It is seen that the cross objection is for the interest on the amount of refund not sanctioned within the stipulated time period. It is seen from records that the respondent-assessee had put up the claim for interest before the lower authorities. In view of this, we consider the cross-objections filed by the respondent-assessee as an appeal as provided under Section 35B (4) of the Central Excise Act, 1944 and take it up for disposal. In light of the findings that the respondent-assessee is eligible for the refund of the amount, they are also eligible for the interest, after 90 days from filing of the refund claim, till the date it is settled, in accordance with law.
8. Since we have decided the issue specifically on the assessee-respondents own case on identical facts for an earlier period, as cited hereinabove, we do not wish to record any findings on various other submissions and the case laws submitted by both sides.
9. In view of the peculiar facts and circumstances of this case and in view of foregoing, the revenues appeal is rejected and allow the cross-objection filed by the respondent-assessee.
(Pronounced in open Court on 07.02.2011) (P. KARTHIKEYAN) Member(T) (M. V. RAVINDRAN) Member (J) //rv// 15