Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, Pune Ii vs M/S Super Craft Foundry on 3 June, 2009
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT No. II
Appeal No. E/1839/06
(Arising out Order-in-Original No. PII/59/2006 dated 2.3.06 passed by the Commissioner of Central Excise (Appeals), Pune II)
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?
No
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 II
Appellant
Vs.
M/s Super Craft Foundry
Respondent
Appearance:
Shri Arun V. Bakre, Advocate for the appellant Shri A.K. Prasad, JCDR for the respondent CORAM:
Honble Mr. P.G. Chacko, Member (Judicial) Date of hearing : 3.6.2009 Date of decision : 3.6.2009 O R D E R No:..
This appeal of the department is against grant of a refund to the respondent by the lower appellate authority. The respondent had paid differential duty on 25.9.03 by way of debit in CENVAT account in respect of certain excisable goods cleared during 1999-2002. This payment was under protest and the dispute between the party and the department came to be the subject-matter of litigation, which ultimately ended up in favour of the assessee. In these circumstances, they filed a refund claim with the original authority under Section 11B of the Central Excise Act. That authority issued a show-cause notice dated 29.8.05 proposing to deny cash refund on the ground of unjust enrichment. This proposal was contested by the party in a reply to the notice. In adjudication, the Dy. Commissioner sanctioned refund claim of Rs. 3 lakhs under Section 11B(2) of the Act but credited the amount to the Consumer Welfare Fund on the aforesaid ground. Aggrieved, the party preferred an appeal to the Commissioner (Appeals) and the latter allowed that appeal with consequential relief. The reasoning of the appellate authority is discernible from para 6 of the impugned order, which is reproduced below:-
I find that the claim for refund of Rs. 3,00,000/- filed by the appellant has been rejected on the ground that the said amount has been shown as administrative and selling expenses in the balance sheet of 2003-04. The adjudicating authority has concluded that since the amount is shown as expenditure in administration and selling expenses, it must have been taken into account while working the cost of end product and as such the incidence of duty must have been passed on the customers. I do not find this assumption to be correct as the department has not brought any material on record to show that this expenditure has gone into costing of the end product. In fact, any amount shown as expenditure could not have been recovered from anywhere. I find the presumption of the department to be baseless. It is pertinent to note that the duty was paid not at the time of clearance but subsequently, hence there could be not unjust enrichment as is evidence from the fact that the same has been shown as expenses in their balance sheet. I am, therefore, of the view that the very fact that the amount claimed as refund has been shown as expenses in the balance sheet shows that there is no unjust enrichment. There appears to no need for the appellant to adduce any further evidence to show that there is no unjust enrichment.
2. In the present appeal of the department, the main ground raised by the appellant is that the ld. Commissioner (Appeals) chose to act illegally by placing the burden of proof on the department in relation to the subject refund claim. The ld. JCDR has reiterated this contention of the appellant and has also referred to the various judgements cited in the memorandum of appeal. It is submitted that the burden is on the claimant to prove that the incidence of duty had not been passed on to others. According to him, this burden was not successfully discharged. It is pointed out that the amount of differential duty was admittedly shown as an item of expenditure under Administration and Selling Expenses of the respondent and that this fact is supportive of the statutory presumption already working in favour of the Revenue. In this scenario, the burden is onerous on the refund claimant under Section 12B of the Central Excise Act. The JCDR has also claimed support from United Spirit Ltd. vs. CC(I), N.Sheva 2008 (228) ELT 360 (Tri-Mumbai) wherein a claim for refund of duty which was paid subsequent to clearance of the goods as in the present case, was held to be inadmissible in cash to the assessee on the ground of unjust enrichment.
3. I have heard the ld. Counsel for the respondent as well. According to him, the claimant could substantially discharge the burden under Section 12B. It is his further submission that, given a reasonable opportunity, the party can adduce additional evidence.
4. In the aforesaid circumstances, I have found a fit case for remand to the original authority. The order passed by the lower appellate authority can, in no case, be sustained inasmuch as it allowed the party to get over the bar of unjust enrichment by observing that the department had not brought any material on record to show that the above expenditure had gone into cost of the end product. In other words, the burden of proof was placed on the department, thereby doing violence to Section 12B ibid. It further appears that the only document filed by the party was their balance-sheet wherein the differential duty amount was shown as an item of expenditure. I am of the view that for the ends of justice, an opportunity must be made available to the party to adduce evidence, if any, against the bar of unjust enrichment. For this end, it is necessary to remand the case to the original authority. Accordingly, after setting aside the orders of both the authorities, I allow the appeal and remand the matter to the original authority with a direction to that authority to dispose of the assessees refund claim afresh after giving them a reasonable opportunity of adducing additional evidence and of being heard.
(Dictated in Court) (P.G. Chacko) Member (Judicial) //SR 5