Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, Pune ... vs M/S Serum Institute Of India Ltd on 20 May, 2009
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT No. II
Application No. E/S/313/09
in
Appeal No. E/257/09
(Arising out Order-in-Appeal No. P-III/197/08 dated 24.10.08 passed by the Commissioner of Central Excise (Appeals), Pune III)
For approval and signature:
Honble Mr. P.G. Chacko, Member (Judicial)
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?
Yes
3.
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
Commissioner of Central Excise, Pune III
Appellant
Vs.
M/s Serum Institute of India Ltd.
Respondent
Appearance:
Shri P.K. Agarwal, SDR for the appellant Smt. Padmavati Patil, Advocate for the respondent CORAM:
Honble Mr. P.G. Chacko, Member (Judicial) Date of hearing : 20.5.2009 Date of decision : 20.5.2009 O R D E R No:..
This appeal filed by the department is against grant of refund of Rs. 2,16,698/- being Central Excise duty plus education cess. The original authority had, in adjudication of a show-cause notice, held the above amount to be refundable but credited the same to the Consumer Welfare Fund under Section 11B(2) of the Central Excise Act after holding that the assessees refund claim was hit by the bar of unjust enrichment. The first appellate authority, in an appeal filed by the assessee, found that the incidence of duty had not been passed on to the buyer and, therefore, the refund was liable to be sanctioned and paid to them. Aggrieved by the decision of the Commissioner (Appeals), the department in the present appeal submits that the incidence of duty had been passed by the respondent to the buyer as clearly indicated in the relevant invoice. The appellant further submits that the burden of duty was not taken back at the appropriate stage, whether by way of issue of credit note or otherwise. It is also stated that the case law cited by the Commissioner (Appeals) is not applicable to the facts of the present case.
2. The appellant has relied on the judgement of the Supreme Court in Mafatlal Industries Ltd. vs. Union of India 1997 (89) ELT 247 (SC) and that of the Punjab & Haryana High Court in JCT Ltd. vs. CCE 2006 (202) ELT 773 (P&H). Ld. SDR has reiterated the above grounds of appeal and has urged that the impugned order be set aside on merits. Of course, he has also pressed for allowing the present application which seeks stay of operation of that order. The Ld. Counsel for the respondent submits that the refund has already been realised and therefore the stay application is infructuous. She has also argued in defence of the order of the Commissioner (Appeals). The counsel has also produced what is called extract of rectified General Ledger Account pertaining to appeal filed for refund of duty. She has also produced a copy of the relevant invoice. It is submitted that there is no change of price of the goods with reference to the date of the invoice. In other words, the price of the goods was the same after that date as it was before that date. According to the learned counsel, as per the rectified General Ledger Account maintained by the respondent at the material point of time, the amount of differential duty claimed as refund was a receivable and therefore the burden of duty should be deemed to have remained with them. In this manner, the ld. Counsel has made an endeavour to get over the bar of unjust enrichment. After considering the rival submissions, I have, at the outset, found the stay application to be infructuous as rightly pointed out by the counsel. The application is dismissed. However, in the nature of this case, a summary disposal of the appeal is called for. Accordingly, I proceed to deal with the appeal.
3. It is not in dispute that the amount of Rs. 2,16,698/- (excise duty plus education cess) is an excess payment made by the respondent on the goods supplied to the Directorate of Family Welfare, Govt. of NCT of Delhi under cover of invoice no. 1112001591 dated 28.10.06. But for the question of unjust enrichment, this amount would have been refundable in cash to the party. The issue now is whether the claim for this refund is hit by the bar of unjust enrichment under Section 11B (2) of the Central Excise Act. The original authority held it to be so and credited the amount to the Consumer Welfare Fund. The appellate authority held that there was no change in the contract price whether the duty was payable or Nil as can be seen from the copy of invoices of sale from EOU/DTA. According to that authority this clearly shows that the appellant is absorbing the duty himself. The ld. Commissioner (Appeals) attempts to substantiate this finding by discussing the partys margin of profit and allied aspects. In the result, the refund claim has been held to be not hit by the bar of unjust enrichment.
4. On a perusal of the aforesaid invoice, I find that the respondent paid excise duty of Rs. 2,86,875/- plus education cess of 5737/- totalling to Rs. 2,92,613/-. The invoice is primary evidence of this amount having been recovered by the respondent from the buyer. The burden was high on them to prove to the contra, i.e., to show that the burden of duty was not passed on to the buyer vide Sections 12A and 12B of the Central Excise Act. This burden has not been discharged in this case. The finding to the contra contained in the impugned order cannot be accepted. The claim of the respondent is that they retained the above amount with them without passing on the burden to the buyer, by making adjustments in their General Ledger Account, which adjustment is referred to as rectification. Even according to the respondent, any credit note or other document was not issued to the buyer for taking back the duty burden already passed on to them under the relevant invoice. This is not to say that any subsequent issue of credit note would have salvaged the refund claim against the bar of unjust enrichment. Suffice it to say that the burden of duty plus education cess amounting to Rs.2,16,698/- has ever remained with the buyer and consequently, the respondent was not entitled to get cash refund of the amount on account of the bar of unjust enrichment. Much has been argued with reference to the price of the goods. It is settled law that the bar of unjust enrichment cannot be got over on the sole ground of the price of the goods remaining constant during the period around the date of sale of the goods vide Commissioner vs. Allied Photographics India Ltd. 2004 (166) ELT 3 (SC) and SRF Ltd. vs. CCE 2006 (193) ELT 186 (Tri-LB) etc. There should be independent and formidable evidence against passing of duty burden to buyer so that a claim for refund of such duty can be allowed without the bar of unjust enrichment. Such evidence is not forthcoming in this case.
5. The impugned order is set aside and this appeal is allowed with consequential relief to the appellant.
(Dictated in Court) (P.G. Chacko) Member (Judicial) //SR 5