Customs, Excise and Gold Tribunal - Mumbai
Cce vs Harinagar Sugar Mills And Ors. on 4 April, 1998
Equivalent citations: 1998(77)ECR42(TRI.-MUMBAI)
ORDER
K.S. Venkataramani, Vice-President
1. These appeals filed by the Commissioners of Central Excise, Mumbai-I, Mumbai-II and Aurangabad, against the orders of Commissioner of Central Excise (Appeals) captioned above, involve a common issue. The question is, whether grant of refund under Section 11B of Central Excises Act, 1944, even during the period prior to its amendment with effect from 20.9.1991, would be governed by the condition that the assessee seeking refund should prove that the duty burden has not been passed on to his customers. The amendment to Section 11B of 20.9.1991 incorporated this condition. In all these cases, the impugned orders have been passed prior to the amendment in which the Commissioners (Appeals) have held that unjust enrichment was not an ingredient in Section 11B of Central Excises Act for grant of refund and hence cannot be lawfully invoked by the departmental authorities to deny the refund if otherwise eligible on merits.
2. We have heard Id. DR Shri D. Gurnani who relied upon the judgment of the Nine-Judges constitutional Bench of the Supreme Court in the case of Mafat-lal Industries v. UOI1997 (68) ECR 209 to say that the matter is no more res Integra and that the criterion of unjust enrichment is retrospectively applicable to all cases of refund pending even prior to amendment to Section 11B. Respondents are either not present despite notice or have sought adjournment which in the circumstances we are disinclined to grant.
3. On considering the submissions, we find that the Supreme Court in the Mafatlal Industries case (supra) has laid down that the first proviso to the amended Section 11B makes it clear that the amended provisions apply to pending claims, and that the burden of proving that the burden of duty has not been passed on will still lie on the assessee even for the period anterior to the amendment. The Supreme Court held that reasonably construed, the provisions mean that in respect of pending applications, the requirement is only to produce such documentary and other evidence as is sufficient to establish that the incidence of duty, refund of which is claimed, has not been passed on by the applicant to any other person. The Supreme Court further held that Section 11B of Central Excises Act whether before or after the 1991 amendment make every refund claim subject to proof of not passing on the burden of duty to others.
4. In view of the law laid down as above by the Supreme Court, the impugned orders, holding that the criterion of unjust enrichment to refund claims during the period prior to the 1991 amendment to Section 11B as inapplicable, are unsustainable and are set aside. The jurisdictional Assistant Commissioners concerned are directed to consider the refund claims on merit, and when found eligible, give opportunity to the assessees to lead such evidence as is satisfactory to establish that the incidence of duty, refund of which is claimed, has not been passed on to others.
5. The appeals are accordingly disposed of in the above terms.