Customs, Excise and Gold Tribunal - Delhi
Jaipur Syntex Ltd. vs Commissioner Of Central Excise, Jaipur on 11 April, 2002
Equivalent citations: 2002ECR883(TRI.-DELHI), 2002(143)ELT605(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. This appeal has been filed by the appellants against the impugned order-in-appeal dated 24-5-2001 passed by the Commissioner (Appeals) vide; which he had affirmed the Order-in-original dated 4-12-95 of the A.C.; who sanctioned the refund of the disputed amount for the period January, 86 to November, 90 in favour of the appellants but ordered the credit of the same to the Consumer Welfare Fund on the ground that the duty incidence have been passed on to the buyers, by them.
2. The appellants are engaged in the manufacture of blended yarn out of non-cellulosic synthetic waste (in short NCSW). The dispute arose about the classification of the yarn as the Revenue wanted the classification under chapter heading 5506 which prescribed the higher rate of duty, while the appellants contended that the yarn was classifiable under chapter heading 5505 of the CETA. This dispute was finally settled in favour of the appellants by the Tribunal. The appellants had sought refund of the disputed amount which relates to the higher amount of duty paid by them at the insistence of the Revenue. They filed 5 refund claims as duty on higher rate was paid by them under protest. The A.C. accepted the refund claims of the appellants by holding that they are entitled to the same but instead of paying that amount to them, ordered that the same be credited to the Consumer Welfare Fund as the appellants had passed on the incidence of duty to the buyers. This order of the A.C. dated 4-12-95 had been affirmed by the Commissioner (Appeals) through the impugned order.
3. The learned Counsel has contended that the appellants had produced over-whelming evidence to prove that they had never passed; on incidence of duty to the buyers but the same has been wrongly ignored by the authorities below. He has also argued that mere recital in the invoices that price included the central excise duty was not sufficient to presume that duty had been actually passed on to the customers. In this context, he has referred to two judgments of the Tribunal, namely Addisons Paints & Chemicals Ltd. v. CCE, Chennai - 2002 (48) RLT 950 and CCE, Chandigarh v. Metro Tyres Ltd. -1995 (80) E.L.T. 410, wherein it has been observed that it would not be valid to raise presumption that duty has been passed on to the customers, where there was a composite invoice and the duty was not shown separately.
4. On the other hand, the learned JDR has simply contended that the composite price including duty shown in the invoices was enough to raise an inference regarding passing on, of the incidence of duty to the customers by the appellants.
5. We have heard both the sides and gone through the record.
6. So far as the entitlement of the appellants to the refund of the disputed amount which they earlier paid under protest, on account of payment of duty at a higher rate on the yarn at the insistence of the Revenue is concerned, the same remains undisputed. They had not been paid this amount only on the ground that they had passed on the incidence of duty to the customers and as such, Doctrine of unjust enrichment was attracted in their case. But the record shows that the appellants have produced all the balance sheets which are page 92 onwards of the paper book, wherein the disputed amount has been shown as claim receivable. Even in their Profit and Loss account and annual report, copies of which had also been produced on record, the amount has been shown under heading as claim receivable. The comprehensive chart had been also placed on record by the appellants wherein entries in Schedules 7 and 9 of the balance sheet for the year 85-86 to 90-91, had been fully explained. Schedule 9 relates to the contingent liability which had not been provided for, by them, in the Profit and Loss account, while Schedule 7 covers the claims receivable. All the figures had been duly certified by the Chartered Accountant.
7. The break up of the duty paid by them at the higher rate under protest had been also furnished by them which is at page 412 of the paper book and the same had been also certified by the Chartered Accountant. From the examination of this chart and other above referred documents, it is quite evident that incidence of duty had not been passed on, by the appellants to the customers. The observations of the Commissioner (Appeals) that the amount of excess duty for which the refund claims had been filed, had not been indicated in the balance sheets, cannot be held to be correct, as in Schedules 7 and 9 of the balance sheet, they had clearly set out these figures. The argument of the learned JDR that since in invoices, the composite duty inclusive of excise duty, had been shown, a presumption deserves to be drawn that incidence of duty had been passed on to the customers, by the appellants, cannot be accepted in view of the ratio of law laid down in the above referred both the cases. Even the Apex Court had approved the view of the Tribunal in CCE, Chandigarh v. Metro Tyres Ltd (supra), as reported in 1997 (94) E.L.T. A51. Therefore, we are unable to uphold the impugned order of the Commissioner (Appeals) who had affirmed the order-in-original of the A.C., for crediting the sanctioned refund amount, to the Consumer Welfare Fund, instead of paying the same to the appellants. The appellants are entitled to receive this amount for having not passed on the incidence of duty to the customers, in the light of the discussions made above.
8. Consequently, the impugned order of the Commissioner (Appeals) is set aside. The sanctioned refund amount of the disputed amount, as detailed in the impugned order itself, is ordered to be released/disbursed to the appellants. The appeal of the appellants accordingly stands allowed, with consequential relief as per law.