Custom, Excise & Service Tax Tribunal
M/S Elantas Beck India Ltd vs Commissioner Of Ce & St (Ltu) on 25 February, 2016
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. IV APPEAL NO. E/352/11 & E/89849/14-Mum (Arising out of Order-in-Appeal No. RBT/76/LTU/MUM/2010 dated 30.11.2010 passed by the Commissioner of Central Excise & Service Tax (Appeals), Mumbai). 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 :Yes 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?
========================================================
M/s Elantas Beck India Ltd.
: Appellant
Versus
Commissioner of CE & ST (LTU)
: Respondent
Appearance
Shri Mihir Deshmukh, Advocate with
Ms. Ami Parekh, Advocate
: For Appellant
Shri R.K. Maji, Assistant Commr. (A.R.)
: For Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of Hearing :
25.02.2016
Date of Decision:
.06.2016
ORDER No. .
Per: Ramesh Nair
These appeals are directed against Order-in-Appeal No. RBT/76/LTU/MUM/2010 dated 30.11.2010 passed by the Commissioner of Central Excise & Service Tax (Appeals), Mumbai. Large Tax Payer Unit, Mumbai, whereby learned Commissioner rejected the appeal filed by the appellant and upheld the Order-in-Original No. ANK-I/TK/920/R/08-09 dated 16.12.2008.
2. The fact of the case is that during the process of manufacture of intermediate product namely Notional Resin Contents of Wire Enamels is formed and the same was consumed captively by the appellant, without payment of duty. After pointing out by the Department, the appellant started paying duty on the said product Under Protest. The issue was decided in favour of the appellant by the Tribunal. Subsequently the appellant filed a refund claim on 29.09.1998 which was rejected by the Assistant Commissioner vide Order-in-Original dated 26.05.1998. The appellant had filed an appeal before the Commissioner (Appeals) which was rejected vide Order-in-Appeal dated 28.10.1999. The appellant filed a special Civil Application No. 917/2000 before Hon'ble High Court of Gujarat, wherein by an order, the Hon'ble High Court directed the Deputy Commissioner to decide the matter afresh in accordance with law particularly with the light of decision of Hon'ble Apex Court in the case of Union of India Vs. Solar Pesticides Pvt. Ltd. 2000 ELT 401 (SC). A show-cause notice dated 20.02.2001 was issued to the appellant proposing rejection of refund claim on the ground of unjust enrichment. By the adjudication order dated 02.05.2001 the refund claim was rejected, on the grounds that the appellant have not furnished any documentary evidence that they have not recovered the incidence of duty from the buyers. The Commissioner, (Appeals) in the appeal field by the appellant, vide Order-in-Appeal dated 24.11.2003 upheld the rejection of refund claim. On an appeal by the appellant before the CESTAT, Ahmedabad, the Tribunal vide order dated 11.07.2007 remanded the matter to the original adjudicating authority for de novo adjudication. In the said order it was stated that the issue of unjust enrichment disputed by the appellant which can only be done by producing documentary evidence at the level of original adjudicating authority. In the de novo adjudication, the adjudicating authority once again rejected the refund claim on the ground that appellant could not prove that the incidence of the duty has not been passed on to any other person. Being aggrieved with the de novo adjudication order, the appellant filed an appeal before the Commissioner (Appeals) which was rejected by the impugned order therefore the appellant is before me.
3. Shri Mihir Deshmukh, learned Counsel along with Ms. Ami Parekh, learned Advocate appearing on behalf of the appellant submits that the duty was paid on the intermediate product Under Protest. However the duty paid was not taken into account of cost of the final products. This gets proved with the fact that price of the final product before payment of duty and after payment of duty remained the same, therefore duty paid on the intermediate product is not part and parcel of the sale value of the finished goods. Once the duty of intermediate product was not included in the value of the final product, incidence of such duty did not stand passed to any person, the burden of the said duty was born by the appellant themselves, therefore the refund of such an amount is not hit by mischief of unjust enrichment. In support of his argument, he placed reliance on the following judgements:-
(i) Business Overseas Corporation Vs. C.C. (Import & General), New Delhi 2015 (317) ELT 637 (Tri.-Del)
(ii) Motor Industries Company Ltd. Vs. CC, Chennai 2005 (188) ELT 315 (Tri.-Bang)
(iii) Infar India Ltd. Vs. CC, New Delhi 2000 (150) ELT 411 (Tri.- Delhi)
(iv) Eastern Shipping Agency Vs. CST, Ahmedabad 2013 (32) STR 630 (Tri.-Ahmd) He further submits that the appellant have produced Chartered Accountant certificate wherein it was certified that the incidence of the duty paid on Wire Enamels has not been passed on as the same was not found part of the cost of the Wire Enamels. However the original adjudicating authority as well as the first appellate authority did find any evidence which contradicts the submission of the appellant. Therefore the evidence available and explanation submitted by the appellant should not have been discarded, therefore the refund was wrongly rejected.
4. On the other hand Shri R.K. Maji, learned Assistant Commissioner (A.R.) appearing on behalf of the Revenue submits that the appellant have not shown amount of duty paid by them as a receivable in books of account. He submits that being a very old matter, the Chartered Accountant certificate also does not show the correct position, hence the Chartered Accountant certificate is vague and the same was rightly rejected by the lower authorities. He submits that the main ground of the appellant is that the price of the final product before and after payment of duty remained same. This is not sufficient evidence to show that the evidence of duty has not been passed an, thus the appellant have not produced any proper evidence. Therefore the adjudicating authority as well as the appellate authority have rightly held that the refund is hit by unjust enrichment.
5. I have carefully considered the submissions made by both sides. From the fact of the case it appears that the appellant have paid the Excise duty on the intermediate product on insistence of the Department, therefore they paid the duty Under Protest. This is not the case of Excise duty were directly charged in the invoice for the reason that the duty was paid on intermediate product. In such case the test whether the incidence of the duty is forming the part of the final product or otherwise can be ascertain only on the basis that whether price of final product has been enhanced due to duty burden on the intermediate products. In the present case the stand of the appellant that the price of the final product remained same before and after the payment of the excise duty on the intermediate product. As regard the finding of the lower authorities that the amount of duty paid was not shown as receivable in the books account of appellant and the same was booked under Profit & Loss account, therefore no other proof required that the duty incidence is not included in the value of final product. I do not agree with this contention of the lower authorities for the reason that treatment of duty paid amount in the books of account is not conclusive proof that the incidence has been passed on to some other person. Even if the duty paid booked under expenditure and the same has not been charged any person tehn the result will be in profit reduction that itself shows that the incidence of such duty has been born by the appellant, hence not passed on to any other person. Therefore merely because the Excise duty is booked as expenditure in Profit & Loss account, it cannot be said the incidence of duty has been passed on. As per the above discussion, I am of the view that considering the peculiar facts of this case if the duty paid by the appellant has not been explicitly charged to their customer and if price of the final product remained same for the period prior to payment of duty and thereafter, it is sufficient to accept that the incidence of Excise duty paid on intermediate product has not been passed to any other person. I therefore direct the adjudicating authority to verify properly the above aspects and if it is found correct then the appellant appears to be prima facie entitled for the refund. With the above observation I remand the matter to original adjudicating authority for passing afresh order. Needless to say that the adjudicating authority shall grant the personal hearing to the appellant and shall pass a fresh order within a period of three months from the date of this order.
6. The impugned order is set aside and the appeal is allowed by way of remand in the above terms.
(Pronounced in Court on 06.2016) Ramesh Nair Member (Judicial) Sp/ 7 APPEAL NO. E/352/11 & E/89849/14-Mum