Custom, Excise & Service Tax Tribunal
2.1 Brief Facts Of The Case Are That The vs Unknown on 25 August, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. II Table A Excise Appeals filed by the Revenue Sl. No. Appeal No. Respondent
Appearance for assessee Appearance for Revenue
1. 1768/04 EPC Inds. Ltd. Shri J.H. Motwani, Advocate Shri V.K. Singh, SDR
2. 1769/04
-do-
-do-
-do-
3. 1770/04
-do-
-do-
-do-
4. 1771/04
-do-
-do-
-do-
Table B Excise Appeals filed by the assessee Sl. No. Appeal No. Respondent Appearance for assessee Appearance for Revenue
1. 1730/04 CCE Nasik Shri J.H. Motwani, Advocate Shri V.K. Singh, SDR
2. 1751/04
-do-
-do-
-do-
3. 1752/04
-do-
-do-
-do-
4. 1753/04
-do-
-do-
-do-
5. 534/08
-do-
-do-
-do-
6. 710/08
-do-
-do-
-do-
Table C Cross Objections filed by the assesse Sl. No. Cross Objection No. On appeal No.
1. CO-343/04 1768/04
2. CO-342/04 1769/04
3. CO-341/04 1770/04
4. CO-340/04 1771/04 Arising out of Order-in-Appeal No.CEX/XI/JMJ/53-54/916/NSK/ APPL/2004 dated 23.02.2004, CEX/AKD/184/APL/NSK/06/7183 dated 02.08.2006, AKD/69/NSK/2008/2669 dated 02.04.2008 and CEX/XI/JMJ/53/916/NSK/ APPL/2004 dated 23.02.2004 passed by the Commissioner of Central Excise (Appeals), Nashik.
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial) Honble Shri Sahab Singh, Member (Technical)
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 :
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?
CORAM:
Shri Ashok Jindal, Member (Judicial) Shri Sahab Singh, Member (Technical) Date of Hearing : 24.08.2011 Date of Decision : 24.08.2011 ORDER NO.
Per Ashok Jindal Revenue is in appeals against the order of Commissioner (Appeals) sanctioning refund claim of Rs.99,11,410/-. The assessee are in appeals against the denial of refund claim on the ground of bar of unjust enrichment is applicable to the facts of these cases. The assessee has also filed Cross Objections to the Revenues appeals.
2.1 Brief facts of the case are that the appellants are the manufactures of Drip Irrigation System and Sprinkler Irrigation System (DIS and SIS in short) which are sold to the farmers at a rate notified by the Ministry of Irrigation, Govt. of Maharashtra. The said system is exempted from Central Excise duty. A dispute arose between the assessees and the revenue with the regard to the classification of product like HDPE/LDPE pipes and tubes emerging as intermediate products during the course of manufacturing of DIS and SIS. The Revenue is of the view that the pipes and tubes are classifiable under Chapter 39 and chargeable to duty, therefore, the assessee is required to pay duty on these pipes as they are captively consumed in manufacturing of their final exempted product.
2.2 The adjudicating authority confirmed the demand by classifying the said product under Chapter 39 which was appealed by the assessee and this Tribunal held in favour of the assessee holding that HDPE/LDPE pipes are classifiable under Chapter 84, attracting nil rate of duty, therefore duty was not leviable on these products. During the period of dispute, for abundant caution, the assessee paid duty on these HDPE/LDPE pipes under protest. When the matter was settled by the Tribunal classifying the HDPE/LDPE pipes under Chapter 84, the assessee filed a refund claim of duty paid under protest during the period of dispute. Against appeals bearing Nos. E/1768/04 to E/1771/04, the lower appellate authority sanctioned the refund claim of Rs.99,11,410/- but in rest of the matters the claim was denied on the ground that the assessees have failed to discharge the burden of unjust enrichment. Aggrieved by the said findings, both the sides are in appeals before us.
3. Shri J.H. Motwani, learned Advocate appearing for the assessee submitted that as DIS and SIS are exempted from duty and HDPE/LDPE pipes are classifiable under Chapter 84 and also exempted from duty, the amount of duty which they have paid under protest is refundable to them. He further submitted that the duty paid under protest was debited to their profit & loss Account during the impugned period which have been shown as expenditure on the final product so fixed by the Ministry of Irrigation, Govt. of Maharashtra. Therefore, passing of duty on the customer does not arise because the price of end product was same before, during and after the period of dispute. Hence, the bar of unjust enrichment is not applicable to their case. He further submitted that the Commissioner (Appeals) has denied the refund claim of Rs.31 lakhs (approx.) on the basis of report of Asst. Director (COST) which was not supplied to them. Therefore, the report of Asst. Director (COST) cannot be relied upon. He further submitted that their case is squarely covered by the decision of this Tribunal in the case of CCE v. Flow Tech Power 2005 (186) ELT 399 (Tri. Chennai) which was confirmed by the Honble High Court of Madras as reported in 2006 (202) ELT 404 (Mad.) on identical facts. Therefore, he submitted that, the Revenues appeal be dismissed and the assessees appeals be allowed with consequential relief.
4. Shri V.K. Singh, learned SDR opposed the contentions of the learned Advocate by saying that the report of A.D. (Cost) is very important document to consider the issue whether the assessee has discharged the burden of unjust enrichment or not and in the report it is clearly mentioned that the assessee has included the component of duty in the cost of HDPE/LDPE pipes while arriving at cost. Therefore, the contention of Revenue is to be accepted and refund claims be rejected.
5. Heard both sides.
6. After hearing both the sides, we find that the issue before us is that whether in the facts and circumstances of the case the assessees are entitled for refund claim or not. It is not in dispute that the end product and the HDPE/LDPE pipes which were captively consumed to manufacture the end product are exempted from duty. It is also not in dispute that the assessee has paid the duty under protest. The only dispute is that the report of A.D. (COST) which was not shown to the assessee while passing the impugned order. Therefore, we find that not supplying the copy of report of A.D. (COST) to the assessee is in gross violation of principle of natural justice. The decision of the Honble High Court of Madras in the case of Flow Tech Power (supra) relied on by the learned Advocate was also not produced before the lower authorities while considering the refund claim. Therefore, we find that the matter needs examination at the end of the adjudicating authority. In view of the above observations, we set aside the impugned orders and remand the matter back to the adjudicating authority to examine the issue afresh after supplying the copy of the report of A.D. (COST) to the assessee and also after considering the decision of Flow Tech Power (supra).
7. We also direct, as the revenue involved in this matter is more than Rs.1 crore, the adjudicating authority shall pass the order within three months of the receipt of this order. It is pertinent to mention that the assessee shall be given an opportunity to present their case. The report of A.D. (COST) shall not be binding the subject matter in Appeal No. E/534/04. Appeals are allowed by way of remand. Cross Objections also disposed of in the above manner.
(Pronounced in open Court) (Sahab Singh) Member (Technical) (Ashok Jindal) Member (Judicial) nsk 6