Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs Aquasub Engineering on 24 April, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal Nos.E/1083/2004 & E/CO/34/2005
E/129/2006
[Arising out of Order-in-Appeal No.111/2004 (SCN), TRY-II dated 20.4.2004 and OIA No.278/2005-CE dt. 11.11.2005 passed by the Commissioner of Customs & Central Excise (Appeals), Coimbatore]
Commissioner of Central Excise,
Coimbatore
Appellant
Versus
Aquasub Engineering Respondent
Appearance:
Shri K.P. Muralidharan, AC (AR) For the Appellant Shri J. Shankarraman, Advocate For the Respondent CORAM:
Honble Shri R. Periasami, Technical Member Date of hearing/decision :24.4.2015 FINAL ORDER No.40457-40458/2015 Revenue filed the above two appeals against Order-in-Appeal No.111/2004 dt. 20.4.2004 and OIA No.278/2005 dt. 11.11.2005. As the issue is common both the appeals are taken up together for disposal.
2. The brief facts of the case are that the finalization assessment on the clearances of intermediate products viz. stampings, laminations, cast articles manufactured and cleared to their own sister unit on payment of duty by following valuation under Rule 8 of the Valuation Rules. The adjudicating authority has finalized the provisional assessment for the period from April 2000 to March 2001 in the first appeal and April 2001 to March 2002 and sanctioned refund of Rs.8,93,519/- and Rs.27,51,148/- respectively and credited to the Consumer Welfare Fund vide respective adjudication orders. The respondent preferred appeals and the Commissioner (Appeals) by the impugned orders dt. 20.4.2004 and 11.11.2005 respectively allowed the appeals with consequential relief. Hence Revenue filed the present appeals.
3. Heard both sides. Ld. A.R reiterated the grounds of appeal and submits that the adjudicating authority has rightly credited the refund to the Consumer Welfare Fund as hit by unjust enrichment clause and submits that the lower appellate authority has relied photocopies of the invoice and there was no evidence to show that the price has not been changed. He also submits that Chartered Accountant certificate submitted is only a stereotype one and should not have been accepted by the lower appellate authority. He relied on the following case law :-
1) Mafatlal Industries Vs UOI 1997 (89) ELT 247 (SC)
2) Godrej Pacific Technology Ltd. Vs CC Mumbai 2003 (157) ELT 410 (Tribunal)
3) Philips Electronics India Ltd. Vs CCE Pune-I 2010 (257) ELT 257 (Tri.-Mumbai)
4. Ld Advocate for the respondent reiterated the findings of OIA. He further submits that the goods are cleared to their own sister unit for manufacture of power driven pumps and the final products cleared by their sister unit are fully exempted from excise duty. Therefore, they have discharged duty on the intermediate products. Since price of stampings and cost of the materials are not available, they have opted for provisional assessment of goods which are used for the captive consumption. He further submits that final products are exempted and there is no change for variation in price of the final product. He further submits that OIA dt. 11.11.2005 has dealt the issue in detail. He refers to paras 5,6,7, 8 of the OIA. He relied on the following case laws :-
1) Collector Vs Metro Tyres Ltd.
1997 (94) ELT A51(SC)
2) CCE, Chandigarh Vs Metro Tyres Ltd.
1996 (82) ELT 95 (T)
3) Swarup Fibre Industries Ltd. Vs CCE Meerut 2000 (120) ELT 510 (Tribunal).
4) CCE Kanpur Vs Corona Cosmetics & Chemicals (P) Ltd. - 2000 (118) ELT 356 (Tribunal)
5. I have carefully considered the submission of both sides. The short issue in this case is as to whether refund sanctioned allowed in the impugned order is hit by unjust enrichment or not. There is no dispute on the fact that respondents opted for provisional assessment for the intermediate product manufactured by them and supplied to their own sister unit for manufacture of the final product "Power Driven Pumps" which is exempted from payment of excise duty. The period involved in both the cases is from 1.4.2000 to 31.3.2002. The Revenue has not brought any clear arguments against the impugned order but only stated that there was no clear evidence of enhancement in price and there is no evidence to show that the price remained constant. They have only stated that Chartered Accountant certificate is not acceptable whereas I find from the impugned order dt. 11.11.2005 that the LAA has dealt the issue in detail and passed an elaborate order extending reasons in para 6 to 8 and came to the conclusion that price of the final product cleared by the sister unit remained constant as the goods was exempted from excise duty. Relevant para-8 of the Commissioner (Appeals) order dt. 11.11.2005 is reproduced as under :-
"The appellants have made a strong plea that the price of final product was kept the same during the disputed period and the practice of following a constant price was continuing irrespective of the fact that there was increase in the price in stamping, which went into the making of the final products. I find that the Department has not disputed the fact that the price of stampings was based on the cost of the raw materials used and the price of the pumps-sets was in turn based on the price of stampings.. The stampings having been subjected to provisional assessment, the presumption is that the Department was are of the appellant's method of calculating the price of stampings on the basis of cost of relevant raw materials. It is seen from the records available on file that the appellants have filed a refund calculation for the year 2001-02 wherein details like provisional price of stampings and its final price were arrived on the basis of cost construction. The provisional assessment involves different types of stampings and the difference between the provisional price and final price given in respect of those models vary. Though the finalisation of assessment has in general resulted in excess payment of duty, it has also caused short payment in some types of stampings as in the case of models SM 132 6 and SM 1604 and the adjudicating authority has in fact allowed the adjustment of excess duty payment with the duty short paid on the said types before arriving at the duty amount eligible for sanctioning refund. In an ideal situation where the entire excess duty paid had occasioned adjustment towards the duty short paid in the course of finalisation of assessment and which is acceptable in law, an occasion for refunding the excess duty paid would not have obviously arisen but in effect it would amount to not only sanctioning but also granting the refund. If and when such adjustment is acceptable in law, it is because of the fact that there is no unjust enrichment in the circumstance of the case and as such it is a relevant factor to construe and also logical to conclude that the incidence of duty was not passed on to the buyer."
6. From the above, it is clear that respondents opted for provisional assessment for want of cost of raw materials consumed in the manufacture of exempted goods and placed much reliance on the certificate of the Chartered Accountant. In a number of decisions of Hon'ble Apex Court and High Court as well as Tribunal, the courts have consistently held that when there is no change in the price of the final product cleared and there is no increase in the rate of duty, the bar of unjust enrichment is not applicable. The Tribunal in the case of CCE Kanpur Vs Corona Cosmetics & Chemicals (P) Ltd. (supra) dealt identical issue. The relevant portion of the said decision is reproduced as under :-
"7.?In this case, the issue is whether the respondents have discharged burden that incidence of duty has not been passed on to the customers. The contention of the respondents is that the invoices were showing the composite price of the goods and the price of the goods remained the same during the period in question and prior to that. The Tribunal in the case of C.C.E. v. Metro Tyres Ltd. (supra) on similar facts, held that the assessees invoices during the material period showing the composite price and duty not indicated separately, itself is sufficient to show that incidence of duty has not been passed on to the customers. This view was followed by the Tribunal in another case i.e. C.C.E. v. Metro Tyres Ltd. reported in 1996 (82) E.L.T. 95 and the appeal filed by the revenue against this decision, was dismissed by the Honble Supreme Court reported in 1997 (94) E.L.T. A 51. In view of the settled position of law, as discussed above, I find no infirmity in the impugned order. The appeal filed by the revenue is rejected."
7. As already discussed above, the respondents paid duty on the intermediate goods which are used in the manufacture of power driven pumps which are exempted from duty. There is no change in the price of the final product. Therefore, by following the above decision (supra), the bar of unjust enrichment is not applicable in the present case and I do not find any infirmity in the impugned orders. Accordingly, both the impugned orders are upheld and Revenue's appeals are rejected. The cross objection filed by respondent gets disposed of.
(Dictated and pronounced in open court) (R. PERIASAMI) TECHNICAL MEMBER gs 7