Customs, Excise and Gold Tribunal - Bangalore
Smithkline Beecham Consumer ... vs Cce on 17 January, 2003
Equivalent citations: 2003(85)ECC746
JUDGMENT
S.S. Sekhon
1. These two appeals are taken up for disposal by this common order, as the issues involved are the same. The appellant is a manufacturer of patent and proprietary medicines, who during the years 1990-91 paid duty on the goods cleared from their factory to their Sales Depots after assessment under Rule 98 of the Central Excise Rules, 1944. The goods were thereafter, sold by them on cum-duty prices from the sales depot. The invoices issued by the sales depot to the Customers, down the line, did not contain any specific amount of the duty of excise paid provisionally or otherwise on the goods.
2. Upon finalisation of the assessments by the proper officer, the appellants became entitled to claim refund of the duty paid in excess on provisional basis. Accordingly, they filed refund claims for the years 1990-1991.
3. The appellants were served Show Cause Notices seeking only, as to why the refund amounts so claimed should not be credited to the Consumer Welfare Fund as per the provisions of Section 11D of the Central Excise Act, 1944 on the grounds:
(i) The assessee sold the goods as per price list, which was inclusive of all costs and thus collected duty of excise from the customers.
(ii) The incidence of duty was passed on to their customers hence refund claimed was not admissible.
4. The lower authority after considering the submissions found:
(i) The assessee had not produced any evidence at any stage to prove that duty incidence had not been passed on to their customers and in absence of the same, it will not be possible to hold that they have not passed on such duty incidence.
(ii) Relying on Section 12B of the Central Excise Act, he concluded that it should be deemed that the excise duty paid by them had not been passed to their customers. Therefore, the refund claims were not entitled under Provisions of Section 11B.
5. The Commissioner (Appeals) vide the impugned order upheld the Assistant Commissioner's order and 'modified' the same by ordering the credit of amount claimed as refund to the Consumer Welfare Fund in terms of Section 11D of the Act on the grounds:--
(i) The goods were sold at price list cost inclusive of all post-manufacturing expenses and duty and therefore it is clear that the appellants collected duty from wholesale dealers/customers and it would be therefore clear that whatever excise duty they paid at the time of clearance was collected in full from the customers.
(ii) No evidence was produced by the appellants of not having passed on this duty incidence. Since Section 12B of the Centra! Excise Act, raised a mandatory presumption and relying on the Apex Court decision in Mafatlal Industries case, he held that the manufacturer was not entitled to the refund. Since during the relevant time, gate pass was in vogue and the gate passes did contain the price of the duty paid on the goods, so whatever duty was indicated on the gate passes it was 'deemed' to be passed on to the customers.
(iii) Relying on the provisions of Section 11B and 11D, he concluded that the case law relied on by the appellants was not applicable, he concluded, it was evident that the appellants had collected in excess amount 'as representing the duty of excise' from the buyers and therefore, the provisions of Section 11D was squarely applicable. Hence, he rejected the refund.
6. After hearing both sides and considering the issues, it is found:
(i) The question of refund and its eligibility, vis-a-vis 'unjust enrichment', when invoices show a composite price, with duty not indicated separately, is now, settled. The Tribiunal decisions in the case of Metro Tyres Ltd. 1995 (80) ELT 410, 1996 (82) ELT 95 and the rejection of the appeal filed by Commissioner of Central Excise in the Metro Tyres case on the aspect, reported in 1996(82) ELT 95(Tri.), by the Apex Court which is reported in 1997 (94) ELTA51 has been followed in the case of Pawan Tyres Pvt. Ltd. 2000 (126) ELT 1061. In view of these decisions, which I am bound to follow, there can be no charge of 'unjust enrichment', to be sustained, when invoices of cum-duty prices not indicating duties separately have been issued from the sales depot to the customers down the marketing channel in this case. In the facts of this case, it is found that the issue pertains to the year 1990-1991 when Section 12B was also not introduced, I have no hesitation in coming to a conclusion that there is no case or cause of 'unjust enrichment' on the grounds as arrived at by the lower authorities.
(ii) When the ground of 'unjust enrichment' cannot be sustained, then whether it is found under Section 11B or under Section 11D, the same cannot be upheld. Therefore, the Commissioner's order of upholding unjust enrichment under Section 11D and rejection of refunds is required to be set aside.
7. In view of my findings, I set aside the orders of the lower authorities and allow the appeals with consequential benefit, since the refunds are not impugned in any other manner by the lower authorities' orders.