Custom, Excise & Service Tax Tribunal
Carrier Air-Conditioning & ... vs Cce, Delhi-Iii on 2 August, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
SCO 147-148, SECTOR 17-C, CHANDIGARH-160017
Division BENCH
Court-II
Appeal No.E/2929-2930/2009
(Arising out of OIA No.230-231/MA/GGN/2009 dt.31.8.2009 passed by the CCE(Appeals), Delhi-III, Gurgaon)
Date of Hearing: 25.11.2016
Date of Decision:02.08.2017
Carrier Air-Conditioning & Refrigeration Ltd Appellant
Vs.
CCE, Delhi-III Respondent
Present for the Appellant: Shri Amarinder Singh, Advocate Present for the Respondent: Shri Atul handa, AR Coram: Honble Mr.Devender Singh, Member (Technical) FINAL ORDER NO. 61460-61461/2017 PER: DEVENDER SINGH These two appeals pertain to the refund claims of Rs.7,01,241/- and Rs.6,11,387/-.
2. The brief facts of the case are that the appellant is engaged in the manufacture of Air conditioners, chillers and parts thereof at their factory in Gurgaon and they stock transfer their goods from the factory to the various situated all over the country. The goods are ultimately sold to their dealers from the depots. Since the actual sale of the goods takes place only on a subsequent date from the depot, the appellant, while clearing the goods from the factory gate, discharges its duty liability as per Rule 7 of the Central Excise Valuation (Determination of prices of Excisable Goods) Rules, 2000. The refund claims of the appellant were sanctioned by the Assistant Commissioner. The department filed appeals against the order of the adjudicating authority and the same were allowed by the Commissioner (Appeals) vide order dated 26.8.2008. The appellant filed appeals before this Tribunal and this Tribunal vide order dated 14.1.2009 gave the following direction:
3.? Heard both the sides and perused the record.
After an extensive hearing of both the sides, we are of the view that litigation is reduced to examination of evidence to come to a conclusion whether the appellant has been unjustly enriched. In view of such a narrow litigation, we waive the pre-deposit and dispose these appeals today.
Copies of Chartered Accountant certificate produced before us exhibit that verification of invoices was made by the Chartered Accountant to issue the certificate. We have no doubt in our mind that the documents possess/relied by the appellants, were not examined by learned Commissioner (Appeals) on the basis of Chartered Accountants certificate to serve interest of justice. It would therefore, be proper to remit the matter back to the learned Commissioner (Appeals) who shall re-examine the corroborative evidence which has given rise to the Chartered Accountants certificates to satisfy himself that claim made by the appellants was not to unjustly enrich itself. In view of the learned Commissioner (Appeal)s conclusion that the evidence is only required to be examined is to test the unjust enrichment, we require the litigation to reduce to this narrow compass only.
3. Pursuant to the same, the Commissioner (Appeals) has passed the impugned order dated 31.8.2009 allowing the appeals filed by the Revenue. Aggrieved from the same, the appellant has filed these appeals.
4. Learned Advocate for the appellant submits that the Commissioner (Appeals) has gone beyond the direction given by this Tribunal in its remand order dated 14.1.2009 and has held that Rule 7 of Valuation Rules had not been violated. He pleaded that the Commissioner (Appeals) did not examine the voluminous evidences nor did she call for a report from the Range as regards the same, which clearly shows that the Commissioner (Appeals) had gone beyond the remand order. He also pleaded that they had not unjustly enriched themselves and when the price data was made available it was seen that there was variation between the stock transfer price and the normal transaction value on the same day or the nearest day. Where the stock transfer price was less than the normal transaction value ascertained according to Rule 7, the appellant paid the differential duty along with interest on the difference.
5. He further pleaded that as the goods were cleared at a higher value at the time of stock transfer compared to the normal transaction value, the question of unjust enrichment does not arise. He relied on the following the case laws:
(i) Nahar Spg. & Wvg. Mills Limited vs. CCE, Bhopal-2009 (247) ELT 708 (Tri.Del.)
(ii) Wep Peripherals Ltd. Vs. CCE, Hyderabd-2007 (213) ELT 18 (Tri.)
(ii) Ispat Industries Ltd vs. CCE, Nagpur, 2014 (307) ELT 744 (Tri.-Mum.)
(iv) CCE, Visakhapatnam-II vs. Andhra Pradesh Paper Mills Limited-2010 (259) ELT 513 (AP).
6. Learned AR for the Revenue reiterated the findings in the impugned order of the Commissioner (Appeals). He invited attention to the invoices.
7. Heard the parties and examined the records.
8. I find that the ld. Commissioner (Appeals) has gone into the question of unjust enrichment in compliance with the order of this Tribunal dated 14.1.2009. The question of following Rule 7 is inextricably linked with the question of determining the value of clearance from the depot and the question of whether the appellant have realized excess duty which they have kept with themselves without passing it further to the consumers. In fact, the data submitted by the appellant as Annexe 2 are in terms of Rule 7 of Central Excise Valuation Rules, 2000.
9. I find force in the contention of the Ld. Commissioner (Appeals) that the respondent have not been able to produce evidence that they have paid more duty than the duty that was to be paid in terms of Rule 7 ibid. The appellant have not been able to establish that the higher duty paid by them for which the refund has been sought has not been recovered from the buyers. The appellant have argued that once the original authority has examined the plea of unjust enrichment, it is not open to Revenue to take a stand that the refund is hit by bar of unjust enrichment without further evidence. This plea of appellant is barred on the finding in the case of Ispat Industries (supra) where Range Officer had given a verification report. In the present case, there has been no verification by Range Officer. Besides, the findings of Commissioner (Appeals) are based on verification of Chartered Accountant Certificate as directed by this Tribunal. Finding of Ld. Commissioner (Appeals) in para 9 are pertinent and are reproduced below:
9. The Respondents through Certificates of Chartered Accountant have made an attempt to prove that the refund is not hit by the doctrine of unjust enrichment. But I find that the said certificates do not support the case of the Respondents. Doctrine of unjust enrichment requires that the person who applies for refund has to prove beyond doubt that the duty paid/borne by him has not been passed on to the ultimate buyer. In the instant case, the Respondents have only been able to prove that they have paid more duty than the duty they ought to have paid in terms of Rule 7 of Central Excise Valuation Rules ,2000. They have not been able to establish that the duty paid by them for which refund has been sought, has not been recovered from their buyers. The doctrine of unjust enrichment will not apply only when the duty paid to the department in respect of the factory gate clearances is higher than the duty which has been recovered from their customers in respect of the sale from the depots which the assessee has not been able to establish in respect of impugned goods. The same principle has been laid down in case of WEP Peripherals Limited vs. CCE (Supra).
10. I also find that the excise duty element has nowhere been separately mentioned in the sale invoices being issued from the depot. Hence, it cannot be ascertained whether the duty element was not borne by the ultimate buyers. Since the ultimate buyers have paid the entire amount mentioned in the invoices, it is evident that the entire duty element has been borne by the ultkmate buyers. As the entire amount has been recovered from the ultimate buyers including the duty element, unjust enrichment is attracted. It is not the case of the appellant that excise duty does not for part of the value of clearances from depot. The appellant have relied on the case law of Andhra Pradesh High Court claiming that the invoices may be cum duty invoices and the manner of preparation of invoices is not conclusive. I find that the case law cited by the appellant there is specific mention of that excise duty in the invoices as can be seen from para 8 and 9 of the said judgment. Hence, the case law is not applicable to the facts of this case. Since the appellant have not been able to rebut the presumption of passing of excise duty, the judgment of Honble Apex Court in Mafatlal Industries Limited vs. Union of India-1997 (89) ELT 247 (SC) does not help them. The other case laws relied upon by appellant are wherein provisional assessment had not been resorted to and hence refunds of differential duty were possible. In the present case, there is no provisional assessment but final duty payment.
11. In view of the above, I find no merit in the appeal filed by the appellant and the same are liable to be dismissed.
12. In the result, both appeals are dismissed.
(pronounced in the court on 02.08.2017) (DEVENDER SINGH) MEMBER (TECHNICAL) mk 1