M/S. Sudhir Papers Limited vs The Commissioner Of Central Excise on 28 March, 2011

[Cites 3, Cited by 0]

Karnataka High Court

M/S. Sudhir Papers Limited vs The Commissioner Of Central Excise on 28 March, 2011

Bench: N.Kumar, Ravi Malimath

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IN THE HIGH comm" 0:: KARNATAKA AT BANGALQRE

DATED THIS THE 28?" DAY 0? MARCH 26:   

PRESENT

THE HOEWBLE MR. 3us"r*'3"CE:'.A1i'<4:é<:j\i¢W:.:    

A'N_DV_
THE HONBLE §\j!R.JUSTI.ClE..R)i*..3{I MA'LIM_AT..??I

CEA".'N'Q; 3'0._é»    _

M/s. Sudhi£L_VPa:pé§.'rs i_ i\t"'§':I'._t€V§"€:1f,' é_  1
No,47,,1s%gan':'«:%ndug.t.na%:.Area, 3-i-gani,
Anekai Taiuk; 5.E:.aff1§§aV1ere4'56O_1QS,
Karnataka'--, '(repi;'.'by V:'--<!rfRa'ji--\x Gupta,
ManagingD§rectQr;},f<   

 ' _ ' ,  "  .,,APPELLANT
{By Sri. K.S.Rayi i3h'ankan Advocate)

 '$é5;.   

Thé"--Csm':%i_issfzéher of Centrai Excise,

Ba:é.ga£ore3~_Igiemméssionerateg
CR B'uii€fing'; Queens Road,

 "~'~__ '~».Banga}Q:é-S60 0:31.

 .§t'£%y_ §rE M,R§§has$<er; Aévécatejs

HJRESPGNDENT

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This CEA filed under Section 356 of the fierltrai
Excise Act, 1944 arising dint of the Central Excise Ae.t,"-4.33.44
arising (mi of Order dated 24/17/2008 passed in_.E_i_r';aVl.'C>'ijder

l\id.?'S5/2008, praying to decide the sdbst:aritia.ia_qu'est'i'e.r1 

law stated therein; set aside the CESTAT,"'-Souith "Zone

Bench, Bangalore in final orders»Nd.?'f§5'/'2--{}*Ci8'=dated

24/7/2008

arised in Appeai Nd.E,--'901}2QO--S in .ti'ie._erids er.

justice and equity. " "

The CEA connng on ﬁﬁeardeeetheydaygyanaae 1,d* delivered the following:----

'JuDeMEdiVi, This appeal is the order passed by rjrder of the appellate af excess excise duty ;:}:aid__teA >fi'i.£»f:lfi:,,l..:f{}-ijriid of bar of limitation as well as an tiie».d"roiir"id-

2.' Tiie"'~ass__essee is a Company incorporated under » the_Ca..rijdariiAes__Act, 1956, and engaged in the manufacture H faliing under Chapter heading 4810.10 of the44"Cer§i;Vrai".E><cise and Tariff Act, 1§8S and fielding Central E><ei_seVV"Registratidn. During the reievaet period the "assessee eras dfferirig quantity disceedt; cash disceimt and i deaiers discetmt to their customers. The c_a.s'e.Vtef'*3th'e assessee is that these discounts woute not be~--.E{r':om:fj' "

time of ctearance ef goeds to the_{::s.st_emersQ"eu'.t.v{je:;'_£dV t::e ' offered eniy Eater. Once the party quantity discount, the assetssee issues Vered i'tV..j'n..r:tes. As,' regards cash discounts based_:é"n,:_th.Ve the buyers woufd deduct disceun't;~--._et-- ti;ee"e_t§»,.e'ay>ment ef price for the goods. Therefore,.:._thee'e.;ss'es,seei,_---epptied to the Superintend'e?_f1t'é§'€:§;ee;traE:_E$tci.s'e; t§a"ngefere II Division, on 20--7~2000::. assessment as the iapse of certain time and were not .i<nV<§x2~.§i_t2._et--.tE1e4 time of dispatch ef goods frem the factory. * In pursuanége at' such requests he was caifed upexjitoss.execzi'te_ BV§13V:bend with the Deputy Cemmissiener fer_ u;::ro\}%.s:e4s§e._f assessment.

3.-,"'-wtburing the peried frem :~11--2@OC) te and 24-200: and 31-12230:, the assessee V "._e'ffeted déseetmts te their custemerst Fer the period from V/__ 1~1-20€)O to 31~3-2€3E31 they hied an apmieatieh for refund on 29-11~2901. a second claim for the peried.',::"f:om :--~4»2oe: to 3:~e12-2001 was fifed eh Beeartment in repéy stated that the refuh{*...c_!_:E1V%:jh:VA.§§ia.s .?1e't.. in order as hecessariéy the doL;um»eht;sMseére'-.,hg:..V__ﬁ*le_d,' Hence, the assessee withcfrgr:-w.4_his efaim for .Vre-%u.h'd'filé;d"{;n"g 29-132001 and on 22-2-2oeé;V...&_"?e:gyx:e§ée:.'«_'he fired fresh claim on 6~3-2002 ar'a§ii_""i':t In support: of his ciaihjV_ferV produced the credit notesf§zh'1é§;h:. to the Invoices.

The the said dam of refund on relying an the Judgrr1VVehf."ef ' the case of ADDISQN vs. c:erg::vs:ssI€j:~»;.}e1r<-"s'eeF EENTRAL EXCISE. The appeai pfe'fer§*Aed V'h'agaihstwm£he said order was dismissed. The "EVhwe. Tr§buea% was aéso dismissed. Aggrieved by i:he__sa:fr:e,_Lf.hAe assessee is before this Ceurt.

4. The teamed counsel appearing for the uaezssesee assaiiing the impugned order contends claim made on 29~11-2001 was Department pointed out <:ertai:§°tiVefeCi:s~._ei':d.AiV:_"¢aii.e'd:V"for:

certain documents, instead of eompiﬁing 'i,,m. request the assessee withdreﬁ'-ithe "cia.i%*n«~.s€_5f1VV'V2V»§'??~'V2GO2'V' with an intention to fiiee fresih"'eieimu"w_ith aii'the~"riecessary documents. Accordingitﬁ/_i_'e"fTre'Sh C"iai_im."was fiied on 6"' March 2002.v'V:\[Th'i_C':h ijwais"~.::ac4l§i°io-xzytevcigeiii on 12-3-2002. Though th'ei§3eri_oeiVVof iimitatiori of one year it_.is_h'o~tehiri§;,__i:»_ut._ja.__t'ohti.ngation of the eariier claim. Therefore-f 'theee-theritiieshev-e taken a too technicai View and were-in error ihefejeetihig the said application. eiiecohdiy he contended on merits that ed-ifij%iott'eo"'i«;{; t.he:"assessee ievieci and coiiected excise duty onia rate; Depending on the oerformahce of gustohzeits/deaiers he has passed on the benefit of V."'-iAt§~edjt§Ction in the price of the goods, Cerreseoosieg exeése duty payabte is also reduced. He has raised t_he_::'e.ree_it notes and passed on the said benefit to the . other words, the burden of h§gherme><c:ise-"t§e.tg,f.. he it has paid for is not passed on to the Cg1istcSniersi..' "Th'eVrfe_fe's>e, the authorities were r1etjus»tifi_ed iri'i:§e'nyihg"'the_§;iaErh ere'. merits. Relying on the Qt earlier passed in the case sehrhitted that the Judgment reVndered'VV_hy'the'V_irviVbu'rﬁ:ei~AA.'§'Vrr».tADDIS0N's case has been set ;es'itte"by ithez; and therefore the Triburiéei _:-ﬁes.tlest'"ﬁt-.stifi.ed'é'xihi'Vtakirig note of the Judgmento't,the<.;fY'§dra's__Cotsrtwseileiy on the ground that against_ the revenue has preferred an appeaf tetthe "é\p'e§<' ..Ceu'rt and the same is pending. Thergettxre he' that the erder requires to be Everi otherwise even if the first ciaim is by time stiit the cash claim wouid net he her-r__ee It is ohiy the eiaérrt anterior to ?--=3~2QC%:

1""~.__V"~which.'wiééti be barred by time arid the assessee weuid he E i is", V entitled to refund for the period from ?ﬂ3ﬁ'Eg®"i'r.~V.tO 31---3~2oo1. * "

6. Per centre, the iearned the revenue submitted that one---ei"--..a <;te.i.'ifn':"n'iaCi--e"«is'=.

withdrawn and a fresh ciaim"i--s_"made ii:.eanrietV'e»eVVfreated V' as a Continuation ofvichze ea'V.rt'i'es5"L_:ciéii-nj arid":-he.ref0re the order passed by the =.t_hai: the claim is barred by time_:<:a,nn0ij"be' so far as the claim on '' note raised subseqU€f7§'te::'tfiiere::§i:riﬁ:'Vef" and ciearing of the

-'of in deciding whether the benefit: beer? izo the custemers or not. Thai:

is ytfée" e3.ziev~§ "e.>§_p'ressé:d by the CESTAT in the case of ,es§j':ViE}'ISE{§:§:ik.:"t'§¢s_eugh it is set aside by the Madras High Court, 1 pending in appeai before the Apex Court ear€Ee'rgfiudgment and denying the relief te the assessee.

ai"1'd__ %h__er"efe're the Tribimei was justified in foiiewing its % aw .53..

Therefore two substantiaf questions of law whieEj":é}';*i-s'e.e,afe.r consideration in this ap;::ea¥ are as follows:

"1) If the ciaém made is tefueded being pointed out and a fresh::"'<:E..s§Emoe.._Es-.

coring such defects whether the said CS3"?-%m may':'; "

be treated as a cont§nuati'er§"ef the ee%E'i'VeE'.=c§e1in*i ?

2) Whether _c;redi1Ei_'vvihmz-te.A:"'~r_aised after clearance of the --é~rf: '£».5fx'\;;fc'-'é'<:e paying higher e§><c§§;:Ve'V:'.dusi:'y entitled to refund. of" safe burden is not Po:nPraﬁﬁ§.51"0.F5:~.gé:.:?h.é V Ifés no t the ciaim for refund is for the periecifrori9:""E,j 11:2iOU{) 't'o 31w3~2oo1. The claim for refund of ziuty pV aVi'ci"*wes made on 2911-2001, that is wen However, when the revenue issued a %iojt:§CA:e g:1'o¥V:"*z'1':é_r§'g out the defects in the said daim and aiso cafied. the assessee to produce the supporting V' AdoCoume'nts it was open to the assessee to oroouce the usgs peert§ng documents or ﬁée an emendee cﬁaém but the E'.../'

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withdrew the earner claim, them the ciaém fer refund ceases te exist. Therefore when a fresh cfaﬁm is r{2e.e'e._Ven ?'~3-2082 the imitation is to be computed If Eémitation is te be computee from that dag: fof -». refund frem 1---1-2802 :.,tp~t:e 6-3¥=,2OQ24ee;*a'4eeepeieariy» by time. However, the c:Ea§m,__for kefersd up~to 31~3~2002 was wen ﬁhet fjherefore though the authorEties:4_._j2.rstifiVeeItVi'h4..V_'hveE'dihg tvhag daim is barred by time Ate th€i'_,€>_<f_€3:!f}f:L."V_<_V)VA1»' ::F€j;'E5v¢tAi>i;1:g'3--.kﬁhé claim from ?'~3--2OG1 to incorrect. To that extent, the egxtherities requires to be POINT _ eéaihﬁ""-VfoV:f____;fefund of excise duty pre~supposes »i:h a~*:_e><r;V§se'«ciV{}":y_ in excess of what is iegaﬂy due has been 7t4h'e--".":.*.ef7eend on which the excise duty is paid is on 'V the u€':iea"%eh'C4e of the goods, Necessaréfy that is paid on the ij».,eAmoa_;ntHmentéened in the invoice. The ciaim for refund ~ argses when subsequentbg if it is shewn that what ﬁe eaid is

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that the assessee is entitled to a refund after holding that he is hot entitied to receive it sheii be credited to thehjﬂind. The etdvise to sub~See:tidr: (2) of Section i1-B_;i~r:-

CEeuse(d) provides that the duty of manufacturer, if he had not ea:;:sed»_:Aeh_ the-'1'_i'iw.ei'dehLeeV{AJet such duty to any other peVr.ee4_n, theh"'~éhstee»dt..tJf thef excise duty being credited tO"Vfh:e:'Ftiﬁd the assessee/appiicant. heenuxdefihed in the expiahatiort to the date of payment of any of the instances s'Aad'§d"';:irovision has been the suhjezsti the Apex Court frem time time.' the introduction of the said pregxisieh, uEr:..efaethv"a iiéihiev Member Bench at the Apex Court .hé'idV.ah"i'dcE:esieh temeensider this aspect of the matter white twe other Cohstitutiohai Bench Judgments are ih_.i;hefeese sf MAFATLAL INDUSTRIES me vs. UNION set 1htf:51A reported in 199? (89) ELT 24? (SC) has iaéd

-,,v'dee%h the tee: en the peihtt E:

av ,

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"The dectrine of unjust enrichment is just and salutory doctrine. No person can seek to ce_I!e§:'t.._4pt~.._ the duty from both the ends. In ether we_§d's,'.t'§ﬁ~e__j' Cannot cohect the duty from the §3L1¥'Ch'E}_e€3§"'5VV'{f one end and aéso collect thev.:se'me'du"ty t.he4_'_j_ State on the ground that it'-._ha{;"been,_te'Etectégj.,.,A from him contrary toV.Eew. «The"-power'-A. the'; V Court is not meant to be_e:<ercise~d_Vf"'etf'un}1t;étly enriching person. Th--e:"Lvdd'etrEne unjust enrichment, is,'"he'we\}ier;;_'»Vtna_enjieebEe to the State. State repereiéewntett of the country, 4§\.ljcV>'t_'0ne;'_<:a€n neeple being unjuet'Ey""e_nt:ir¢f;}Ved.:.:_.____;' ' H H refendv made under the succeed oniy if the asse's.see.VaiVie_gae$ estabiishes that he has not _[;'3'c2essed "t'}.F}QIV1.Zh€V. burden of the duty to any V.pietrgetnjethetrmeeérsenst His refund ciaim she}! be '*_3'E'!.t;§irare'd[d"ecreed eniy when he estabiishes that he passed an the burden of duty or to th'e'extent he has net 30 eassed en, ee the case be. Where the burden of duty has been gassed en, the claimant cannet say that he has A euffered eey reei tees er prejudice' The teei Ease $1 V

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or prejudice is suffered in such a case by the person who has ultimately borne the burden and---.9T it is only that person who can ultimately its refund. But whether such oerson 'V' come forward or where it is not nos_sio§e'~--l.:f:o._ refund the amount to him forMorie._o«r t-helV:oti:er":V«' reasons, it is just and al3i?F0l;\\'_rlieilte amount is retained by"t_he__Si:ate., tinsel: Ab.gri..:ne..3 people. There is no imhnorallty or-.i'rnb5rob'riety involved in such. "prjoposi't'lo'n.[:« Where such"a'.lcla';rnt=Vi:s would be wholly permiVssible'*i'or::the- r§:»ou'rtv_tVo"'.ea'l.l upon the assessee h:e:--"hias..~not passed on the bLi'rdTe'n;"o'f'3'--<jotyfj:t.o"'-a._ gaarty and to deny tl'3--€'-vF€AlAVl€'l;'O;fé':ilfﬁfufltil he...is_rl0t able to establish the fdone by this Court in I."l'.C.f I'n..V_tl<iVEs 'c:o___n'ne'cl:ion it is necessary to _remember.th--_atA'-wrl~e»ther the burden of the duty has been ";:ias_s_ecl on to a third party is a matter w"itAhin"e.xclusive knowledge of the manufacturer, relevant evidence ~-- best evidence --~ §n lr':5is_arilpossession. Nobody else can be reasonably caiied upon to prove that fact. Since me" manufacturer is claiming refund and also because the fact of gassing on the burden of .._15..

ciuty is within his speeiai and exciusive knowiedge, it is for him to aiiege and estabIisii'----. that he has riot passed en the duty to a party. This is the requirement which -I~ the fact that Section 72 is eqi.:itab¥e....g;s_rfo1.{i's~ieri._ and that it incorporates a ;rLiAi'e"'cft_equ.it';2{ii_his'--i'«' requirement ﬂows not only ibecieeuise Seetieri incorporates a rule ofi'e'q.L;ity ij-ut' aisoft5e.i;'a.uVse_.3 both the Central Excise'i'~..teihi:ties duties are ihcIire:t.,§,;axesi'§~;Ii"iiVri§jh Vere su';:i'p'e:>s'e'V<4:i to be and are perrriitted i'3'aVssed_Von to the buyer. That th.e-se.j:du'esf_are'~_ taxes, meant ta ioii, is recognized by at Goods Act. In \/'iE~.".~'X",._ij€ 'ti;;i:557:_.=_3}3éL§§_fiC"'f}~§7C?V'i§SiOn contained in Sect_ienV'1'31.:5__of ti';.e'"Aet-it.'wouid be legitimate for the untii the contrary is _estabi'i'she-:L_tha~t_»a'~~--tiuty of excise or a customs ~t_diiti,! has"beeh___passed on; It is a presumption of it i§§!h.i_eh a Court is entitled to draw under of the Indian Evidence Act! It is ""%'uhoi.o'e'i;tediy a rebuttabie presumptien but the titnjdeh of rebettihg it iies on the person who dairns the refund and it is for him to aiiege and it T.-'estabiish that as a fact that he has not passed

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on the duty; and therefore equity demands that his ciaim for refund be ailowed. This is th'e"--, position de hots 1991 Amencimentw Amendment Act has done no more i"

\i_ ' statutory recognition to the above concepts,' V 7' Therefore the Eaw oniéthepoihtii'e»_iA.we1i«. As is ciear from Section 11-B'--vs.eof-ithe "ACi_Vw«h:é_n fort refund is made wit*ii~§..n the 'pceiriotipstipoiatetij, if the appropriate authority ciaim comes to the Conciosioo:Vj'that;'_'At'he' paid excess duty, after V:pae--s an order directing credititmji'ot.x.tti.e.sa§:id the weifare fund. It is only on the ground that he has not pa's.se'd .on_ the' tiotden of duty to his customer by a plea aintiiv---euiastantiating the same by producing V'accept'a:hie"i'e§?i":ienee; then the appropriate authority shaii diteet péa'y:n;e:nt of the refund amount to the assessee. The question whether the burden of duty has been passed onto .the'~«_.customer or not is poreiy a question of fact. The E:

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burden of proving the said fact is excfusiveiy on assessee. It is onty on discharge of the said burden the asshestsee woufd be entétied to the refund of the said a;;'r's~a't;rh:t__.:"ififher finding of the CESTAT that the events su_hse4q'a:Verif't.Q ctearance cf the goods, raising df theirT§'rrfwi;§Tcé:"'a're'--re!_eeira_hf, in deciding the questieh of refdnd ef._d'uty issV.ri'--et ﬁ}varré3hted"'~e» from any of the statutory the basis for ciaim for is to' said at the time of céearanee. As it is oniy a subsequent itiegai, not warranted: the assessee a right to gr':V.:'_'f;haeeehtext, if credit notes are raisedVV'Aar}d' en te the customer, thus not passihg eh" t,heVVburder€ of excise duty the assessee is . eh"d*ded'rtd'..refuhédV%EjfV the same. Theugh the adjudicatinél appeliate autherity denied reiief reiyirsg on tn:-:,=,_V mdgrhfeht of the CESTAT in Aeazsows case, whee xthatz3.uAdgmeht has been set aside by the Madras High ::mg';»:; the Yréhunal was in tetai errer in foiioesing the E . - fefieeiévie"g:4'"

%:+114eeea :.:p-te ?-*3-zeez. :3 Léeheié as barred by time. ....18..

kxdgmeet and dismissing the appeai ef the assessee. Meyeiy because the matter is new pending befere :he 21*»,eex Ceurt; that is nee 3 teaser: te disregard the 3:e'{§--gi.fmef{i_.e¥. the High Ceurt. The High Ceurt has_..s:.e¥:'*w».VVaei:€iee_ Judgment renderee by the CESTES"

is net eperaiing and therefeee the'TriE::2.z:1a§eV.zx§es;V"wro'f'}g eér1'*Ly ignering the Judgment ef theV'VL'eFe¥.;'a»':'irVas :5 that View of the matter,'e_§§e WV raised is answered in fevour agamst the assessee ant; '§f,;ee;enc5" is answered in favour ef Eye-:e'eses§e'e._e§1'edAiagairiiithe revenue. Ordered acc;or<:,i:V§ngT§§{;' fieeieig of the Tribunal as weii as the"jower', AEi'%;z't§§er.i«fie.e"' cannot be sustained ane accordiegégf 'ne§*ee'y 'éet aside. Hence; we pass the ' is eertiy ailewed.

rejeetéen ef the cieim fer the eerieci from f/' ".19..

3) The assessee wouid be entitled excess demand made from 8-3-2081 to 31~3e.2i301f{'vv.e:"' *

4) In so far as the ciaim F0: phe = 'V 2&0: to December 200:: is concieérnede ..iE'he'ee..e1ni:i'r-e"tl:a.i__rr:gi_$ welt within time and the claimant eE:titIedeVté r:e'fLind7;

RSK/*

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Karnataka High Court

M/S. Sudhir Papers Limited vs The Commissioner Of Central Excise on 28 March, 2011

Bench: N.Kumar, Ravi Malimath