Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Raymond Ltd on 12 October, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No.E/3098/03 (Arising out of Order-in-Appeal No.RJB/M-III/178/2003 dated 29/04/2003 dated passed by Commissioner of Central Excise (Appeals), Mumbai-III) For approval and signature: Honble Mr. P.G. Chacko, Member (Judicial) Honble Mr. M. Veeraiyan, 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?
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Commissioner of Central Excise, Mumbai-III Appellant
Vs.
Raymond Ltd. Respondent
Appearance:
Shri.N.A. Sayyad, JDR for appellant
None for the respondent
CORAM:
Honble Mr. P.G. Chacko, Member (Judicial)
Honble Mr. M. Veeraiyan, Member (Technical)
Date of Hearing : 12/10/2010
Date of Decision : 12/10/2010
ORDER NO
Per: P.G. Chacko
1. In this appeal filed by the Revenue, the challenge is against the appellate Commissioners order reducing the quantum of demand of duty and adjusting a duty amount claimed by the assessee as refund, against such demand of duty. There is no representation for the respondent despite notice, nor any request for adjournment.
2. We have examined the records and heard the learned JDR.
3. A perusal of the records indicate that the respondent (assessee) had resorted to provisional assessment during the period of dispute (April 2001 to March 2002) and that, upon finalization of the provisional assessment, the original authority passed the following order:
I, finalise the provisional assessment for the period April 2001 to March 2002 and
1. confirm the duty liability of Rs.1,23,433.44 (Rupees one lakh twenty three thousand four hundred thirty three and paise forty four only) on M/s.J.K. Files & Tools Ltd.,
2. appropriate Rs.32,911/- (Rupees thirty two thousand nine hundred and eleven only) already debited by the assessee and direct them to pay the difference of Rs.90,522.44 (Rupees ninety thousand five hundred twenty two and paise fort four only) between (Rs.1,23,433.44 and Rs.32,911/-),
3. direct them to pay interest @ 24% per annum from the first day of the month succeeding the month for which the amount is determined, till the date of payment thereof,
4. credit Rs.52,584/- (Rupees fifty two thousand five hundred and eighty four only) to the Consumer Welfare Fund.
4. Aggrieved by the above order, the respondent preferred an appeal to the Commissioner (Appeals) and the appellate authority affirmed the demand of duty only to extent of Rs.1,06,408/- by granting the benefit of cum-duty price. The learned Commissioner (Appeals) also adjusted an amount of Rs.52,584/-, which had been claimed as refund by the assessee, against the above amount of duty, with the result that the assessee became liable to pay an amount of Rs.53,824/- only.
5. In the present appeal, the Revenue has made an endeavour to draw a distinction between cash discount and turnover discount and has faulted the decision of the Commissioner (Appeals) in relation to the demand of duty short paid by the assessee. The appellant has also objected to the grant of benefit of cum-duty price to the assessee. We further note that this appeal also contains a ground, though vague, against the appellate Commissioners order granting refund to the assessee by way of adjustment against the demand of duty. It has been submitted that the claim for refund is hit by unjust enrichment. This contention is based on the premise that the assessee recovered duty from the dealers to whom excess discount had been passed on. In the context of challenging the grant of benefit of cum-duty price, the appellant points out that the issue remains unsettled inasmuch as a civil appeal filed by the department against the Tribunals Larger Bench decision in the case of ITC Ltd. Vs. CCE, Meerut 2002 (139) ELT 50 (Tri-LB) is still pending before the apex Court. In this connection, the learned JDR has not produced any judgement of the apex Court. He has also reiterated other grounds of appeal. In the context of discussing applicability of unjust enrichment to the assessees claim of refund, the learned JDR has referred to the Tribunals decision vide order No.A/258/2010/EB/C-II dated 12/08/2010 in Appeal No.E/2681/06 (CCE, Pune Vs. Shree Warana Sahakari Dudh Utpadak Prakriya Sangh Ltd.)
6. We have considered the submissions. We find that the learned Commissioner (Appeals) rightly granted the benefit of cum-duty price to the assessee while re-determining the amount of short-paid duty. The appellant has not been able to make out a clear case against grant of discounts by the respondent to their buyers. It is not the case of the Revenue that those discounts are not admissible in the context of determination of the assessable value of the goods. The plea of re-quantification of duty by the original authority is not founded on any valid ground. We, therefore, affirm the demand of duty finalized by the Commissioner (Appeals). Another dispute is as to whether the assessees claim of refund of Rs.52,584/- is barred by unjust enrichment and, if it is not, whether it is liable to be adjusted against the above demand of duty. We find that the respondent had initially allowed lower discount to the buyers in respect of certain clearances effected during the period of dispute. Upon finalization of provisional assessment, the respondent was found to be liable to allow higher discount to their buyers. This resulted in a lower assessable value and, consequentially, a finding of excess payment of duty. It was this excess duty, which was claimed as refund. The original authority rightly sanctioned this claim but credited the amount to the Consumer Welfare Fund as it was found that the entire incidence of duty had been passed on to the buyers at the time of clearance of the goods as evident from the relevant invoices. It appears from the records that the respondent issued credit notes to their buyers subsequent to the clearance of the goods so as to take back the burden of excess duty. Apparently, the adjudicating authority did not give any credence to these credit notes. The Commissioner (Appeals), however, appears to have taken this aspect into account and given benefit to the respondent, which is evident from the fact that cash refund was allowed by the Commissioner (Appeals) and adjusted against the amount of duty short-paid by the assessee. This part of the order of the Commissioner (Appeals) is not sustainable in law inasmuch as it has since been held by a Larger Bench of the Tribunal that the bar of unjust enrichment cannot be overcome by issuance of credit notes subsequent to clearance of goods vide S.Kumars Ltd., Vs. CCE 2003 (153) ELT 217 (Tri-LB). Therefore, the appellate Commissioners order for adjustment has to be set aside. Adjustment of Rs.52,584/- against the demand of duty confirmed against the respondent is set aside.
7. In the result, we allow this appeal of the Revenue to the extent of denying cash refund of Rs.52,584/- to the respondent and setting aside the aforesaid adjustment ordered by the learned Commissioner (Appeals). The appellants plea for enhancing the quantum of duty short-paid from Rs.1,06,408/- is rejected. It is made clear that the respondent has to pay only Rs.1,06,408/- as duty of excise with interest thereon. The impugned order will stand modified accordingly.
8. Revenues appeal is disposed of.
(Pronounced in Court) (M. Veeraiyan) Member (Technical) (P.G. Chacko) Member (Judicial) pj 1 2