Allahabad High Court
Meghdoot Gram Udyog, Seva Sansthan ... vs The Commissioner Central Excise, ... on 16 December, 2019
Author: Anil Kumar
Bench: Anil Kumar, Saurabh Lavania
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 3 Case :- FIRST APPEAL FROM ORDER No. - 841 of 2010 Appellant :- Meghdoot Gram Udyog, Seva Sansthan Aliganj Lucknow Respondent :- The Commissioner Central Excise, Lucknow Counsel for Appellant :- Sheelendra Kumar Counsel for Respondent :- Dipak Seth Hon'ble Anil Kumar,J.
Hon'ble Saurabh Lavania,J.
Heard Sri Sheelendra Kumar, learned counsel for the appellant and Sri Dipak Seth, learned counsel for the respondent.
The appellant has filed the present appeal under Section 35G of the Central Excise Act, 1944 (in short "Act, 1944") against the order dated 10.12.2009, passed by the Custom Excise and Services Tax Appellate Tribunal, New Delhi (in short "Tribunal").
Facts, in brief, of the present case, as submitted by the learned counsel for the appellant, are to the effect that a show-cause notice dated 18.01.2006 was issued by the respondent-Assistant Commissioner, Central Excise Division-II, Lucknow to the appellant, mentioning therein as to why the refund application claiming Rs. 5,51,739/- should not be rejected on the ground of unjust enrichment and amount otherwise liable for refund should not to be credited to Consumer Welfare Fund. After receiving the same, the appellant submitted his defence reply to the show-cause notice on 04.04.2006 alongwith proof, inter alia, stating therein that the appellant has not passed on the duty to the buyers, as such is entitled to refund.
The respondent-Assistant Commissioner, Central Excise Division-II, Lucknow rejected the reply of the appellant to the show-cause notice dated 18.01.2006 and passed the order dated 31.08.2006, thereby rejected the claim of refund of the amount i.e. Rs. 5,51,739/- on the ground that the invoices issued by the appellant between 11.09.2003 to 30.01.2004 clearly show that the Central Excise Duty @ 16% separately was charged from the customers/buyers.
Aggrieved by the order dated 31.08.2006, the appellant filed an appeal before the Appellate Authority/Commissioner (Appeals) Custom, Central Excise & Service Tax, Lucknow on 07.11.2006.
Learned counsel for the appellant submitted that before the Appellate Authority, the appellant has categorically stated and pleaded on the basis of the documents and material that the appellant has not charged the excise duty from the buyers.
However, it is submitted on behalf of the appellant, that without considering the documents and material, which was placed by the appellant, the Appellate Authority/Commissioner (Appeals) Custom, Central Excise & Service Tax, Lucknow dismissed the appellant's appeal vide order dated 30.01.2007.
The Authorities of the Revenue Department have not recorded the reasons, as required under the law, on the evidence led by the appellant while rejecting the claim of refund of the appellant.
Aggrieved by the order dated 30.01.2007, the appellant filed an appeal before the Tribunal, which was dismissed vide order dated 10.12.2009.
In view of the above factual background, the instant appeal has been filed by the appellant under Section 35G of the Act, 1944.
The impugned order has been challenged on the ground that in the present case, there is no unjust enrichment on the part of the appellant, as held by the Authorities of the Central Excise Department and in fact the appellant has not charged the Central Excise Duty @ 16% from the buyers and thus, there is no undue enrichment on the part of the appellant. The findings recorded otherwise by the Authorities are perverse, as the same have been recorded contrary to the evidence including invoices and correspondence between appellant and buyer on record.
It is further stated that the Authorities of the Revenue Department including the Commissioner (Appeals) and the Tribunal while rejecting the claim of the appellant failed to consider the letters addressed to dealers/distributors/buyers, which were part of the record and which prove that the excise duty was not passed over to them.
Sri Sheelendra Kumar, learned counsel for the appellant further submitted that the case of the appellant is fully covered by law as laid down by the Apex Court in the case of Meghdoot Gramodyog Sewa Sansthan v. Commr. of C. Ex. Lucknow reported in (2004) (174) E.L.T. 14 (SC).
Accordingly, it is submitted by the learned counsel for the appellant that the impugned orders, under challenge, are liable to be set-aside and the appeal may be allowed.
Sri Dipak Seth, learned counsel for the respondent while rebutting the contentions of learned counsel for the appellant submitted that as per Section 12 (B) of the Act, 1944, which is quoted below, it is the duty of the appellant to prove that he has not passed the excise duty to the buyer and in the present case, on the basis of the material available on record, which was placed before the Authorities concerned, the appellant has failed to prove the said facts, so there is no irregularity and infirmity in the impugned order.
"12B. Presumption that incidence of duty has been passed on to the buyer.-Every person who has paid the duty of excise on any goods under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such duty to the buyer of such goods."
Needless to mention herein that during the course of arguments, learned counsel for the appellant has placed certain documents by way of supplementary affidavit and on the basis of the same it is submitted that the same were on record of the Revenues and from the same it is crystal clear that the appellant has not passed on the excise duty to the buyers, as such, the argument raised by the learned counsel for the respondent with the aid of Section 12 (B) of the Act, 1944 is wholly misconceived and it is clearly established and proved by the appellant that the excise duty was not passed over to the buyers.
Further, during the course of arguments, learned counsel for the appellant submitted that certain documents were filed by the appellant through supplementary affidavit before the Tribunal, however the same were not considered by the Tribunal while passing the order impugned.
We have heard learned counsel for the parties and gone through the record as well as considered the arguments raised by the learned counsel for the parties.
It appears from the record that during the pendency of the appeal, the application for amendment (C.M. Application No. 60609 of 2019) was preferred and the same was allowed by this Court vide order dated 14.05.2019 and pursuant to the same, the amendment was incorporated by adding sixth substantial question of law. The questions of law mentioned in the memo of appeal, after amendment, read as under:-
"1. Whether or not the bar of unjust enrichment will be attracted in a case where duty was paid under protest and specific letters were written to the dealers explaining the reasons of deduction/discounts?
2. Whether the learned Tribunal was justified in relying upon the case of C.C.E. v. Allied Photographics India Ltd., (2004) 4 SCC, 34 and ignoring the principles of law laid down in C.C.E. v. Panhihati Rubber Ltd. (2006) 10 SCC 129 and Auro Lab v. C.C.E. Madurai, 2005 (185) E.L.T. 88 (Tri.-Chennai)?
3. Whether the learned Tribunal was justified in non-considering the letters addressed to the dealers/distributors which proved that duty was not passed over to them?
4. Whether the learned Tribunal was justified basing its judgment on presumption rather the facts of the case?
5. Whether the principle of law would be same in case of duty element as well-as-refund, in other words whether the strict interpretation as applicable in case of duty be also applicable in case of refund?
6. "3. Whether the Learned Commissioner (Appeals) as-well-as Learned CESAT, New Delhi were justified in non-considering the letters addressed to dealers/distributors which were part of record and which proved that the duty was not passed over to them?"
Further, the appeal was admitted by this Court vide order dated 16.07.2010 on two questions of law. The order dated 16.07.2010 is quoted below:-
"The appeal is admitted on the following substantial questions of law:-
(1) Whether it shall be unjust enrichment even if the duty is paid under protest informing the dealers explaining the reasons of deduction?
(2) Whether the Tribunal has committed substantial illegality by not considering the principles of law reported in 2006 (10) SCC, 129- C.C.E. Vs. Panhihati Rubber Ltd.
Sri Rajesh Chauhan has filed memo of appearance on behalf of respondent No. 1, hence it is not necessary to issue notice."
However, in view of the facts and grounds, as stated before us, we feel that for the purposes of adjudicating this appeal, the following question is required to be considered:-
"Whether the Tribunal was under obligation to consider all the material evidence available before it and while discarding the same, it was incumbent upon the Tribunal to record reasons."
From the bare perusal of Section 12 (B) of the Act, 1944, quoted hereinabove, the intention of the legislature is crystal clear that it is the duty of the concerned to prove that he has not passed on the excise duty to the buyer.
For the purposes of decision on the question framed by us, we feel it appropriate to quote the relevant portion of the order of the Tribunal dated 10.12.2009, under appeal, which on reproduction reads as under:-
"6. I have carefully considered the submissions from both sides and perused the records. There is no dispute that on merits, the appellants are eligible for the refund claimed by them. In fact, the refund has been sanctioned and credited to the Consumer Welfare Fund. The letters addressed to the dealers (according to the learned Consultant they are representative in nature) show that as if consequent to payment of duty the appellants were absorbing the burden of duty and the prices remained the same as it was prior to the period when the duty was not being paid. Provocation for issue of such letters is not furnished. There is no reference in the said letters of any resistance of the buyers to buy the goods with the element of duty. After all, the central excise duty is an indirect tax and the role of the manufacturer and the dealer down the chain of sale is to pass on the burden to the ultimate consumer. No evidence whatsoever has been produced that there was any such stiff resistance from the consumers and the dealers which resulted in increasing the discount to upset the duty element and that the same resulted in absorption of the duty burden by the appellant themselves. Mere submission that in view of stiff competition in the market they were forced to absorb the duty burden is not sufficient proof that the appellant did not pass on the duty burden to the consumers. It is settled that the prices remaining the same prior to or after introduction of duty does not imply that the burden of duty is not passed on to the consumers as held by the Hon'ble Supreme Court in the case of C.C.E. v. Allied Photographics Ltd. as reported in 2004 (166) ELT 3 (SC) which judgment has been relied upon by the Commissioner (Appeals). The decision in the case of C.C.E., Calcutta v. Panihati Rubber Ltd. reported in 2006 (76) RLT 541 (SC) relied upon by the appellant is not applicable to the facts of the present case."
From the material placed before us particularly two sets of invoices and letters written by the appellant to the buyers and the relevant portion of the order dated 10.12.2009, quoted above, the position which emerges out is to the effect that the Tribunal has not considered the invoices placed by the appellant before it along with the letters of appellant written to the buyers and after considering both the material evidence viz. invoices and letters written by the appellant to the buyers, the Tribunal has not recorded reasons for coming to the conclusion that the appellant is not entitled for refund of the amount in issue.
The expression 'Judgment' has been defined in section 2(9) of C.P.C., as "judgment means the statement given by the Judge on the grounds of a decree or order." Thus the essential element in any 'judgment' is the statement of grounds of decision, meaning thereby the Court has to state the ground on which it bases its decision. It must be intelligible and must have a meaning. It is distinct from an order as the letter may not contain reasons. Unless the judgment is based on reason, it would not be possible for an Appellate/Revisional Court to decide as to whether the judgment is in accordance with law. (Vide: Surendra Singh v. State of Uttar Pradesh, AIR 1954 SC 194: 1954 SCJ 12 : 1954 SCR 330; and Arjan Dass Ram Lal v. Jagan Nath Sardari Lal, AIR 1966 Pun 227).
A judgment is the expression of the opinion of the Court arrived at after due consideration of the evidence and the arguments, it means a judicial determination, (vide: U.J.S. Chopra v. State of Bombay, AIR 1955 SC 633: 1955 SCJ 603: (1955) 2 SCR 94; and State of Bihar v. Ram Naresh Pandey, AIR 1957 SC 389: (1957) SCC 282: 1957 Cr LJ 567).
Thus, in view of the above, the law can by summarised that the 'judgment' means a decision adjudicating upon the legal rights and liabilities of the parties after appreciating the evidence on record in a particular fact-situation, and that has to be duly supported by reasons.
The Apex Court in the judgment passed in Civil Appeal Nos.3448-3449 of 2019 (Kushuma Devi v. Sheopati Devi (D) & Ors.) observed as under:-
"9. This Court has consistently laid down that every judicial or/and quasi-judicial order passed by the Court/Tribunal/Authority concerned, which decides the lis between the parties, must be supported with the reasons in support of its conclusion. The parties to the lis and so also the appellate/revisionary Court while examining the correctness of the order are entitled to know as to on which basis, a particular conclusion is arrived at in the order. In the absence of any discussion, the reasons and the findings on the submissions urged, it is not possible to know as to what led the Court/Tribunal/Authority for reaching to such conclusion. (See State of Maharashtra vs. Vithal Rao Pritirao Chawan, (1981) 4 SCC 129, Jawahar Lal Singh vs. Naresh Singh & Ors., (1987) 2 SCC 222, State of U.P. vs. Battan & Ors., (2001) 10 SCC 607, Raj Kishore Jha vs. State of Bihar & Ors., (2003) 11 SCC 519 and State of Orissa vs. Dhaniram Luhar, (2004) 5 SCC 568)."
Keeping in view the aforesaid legal preposition and the observations made by us, in this judgment in regard to the order, under appeal dated 10.12.2009, we are of the view the Tribunal was under obligation to consider all the material evidence available before it and while discarding the same, it was incumbent upon the Tribunal to record reasons and in not doing so, the Tribunal erred in law and fact both.
Considering the aforesaid as well as the undisputed submissions made by the learned counsel for the appellant that certain documents were filed by the appellant before the Tribunal through supplementary affidavit and the Tribunal failed to consider the same, we are of the view that the matter may be remanded back to the Tribunal to decide the same afresh.
For the foregoing reasons, the appeal is allowed. The impugned order dated 10.12.2009, passed by the Tribunal is set-aside and the matter is remanded back to the Tribunal to decide the same afresh.
There shall be no order as to costs.
Order Date :- 16.12.2019 Arun/-