Custom, Excise & Service Tax Tribunal
Cce, Coimbatore vs M/S. The Lakshmi Mills Co. Ltd on 16 December, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal Nos. E/567/2001
(Arising out of Order-in-Appeal No.18/2001 (CBE)(GVN) dated 22.1.2001 passed by the Commissioner of Central Excise (Appeals), Tiruchirapalli)
For approval and signature:
Honble Smt. Jyoti Balasundaram, Vice President
Honble Shri P. Karthikeyan, Member (T)
1. Whether Press Reporters may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether the Members wish to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
CCE, Coimbatore Appellant
Vs.
M/s. The Lakshmi Mills Co. Ltd. Respondents
Appearance Shri V.V. Hariharan, Jt. CDR for the Appellants None for the Respondents CORAM Honble Smt. Jyoti Balasundaram, Vice-President Honble Shri P. Karthikeyan, Member (T) Date of Hearing: 16.12.2008 Date of Decision: 16.12.2008 Final Order No. ____________ Per P. Karthikeyan This is an appeal filed by the Revenue. In the impugned order the Commissioner (Appeals) vacated the order of the original authority and allowed refund of an amount of Rs.1,82,192/- to the respondents. The amount relates to excess duty claimed to have been paid by the respondents on clearances of staple fibre yarn during the period November 1996 to January 1997.
2. The facts of the case are that the assessee manufactures cotton yarn, polyester blended yarn and spandex yarn etc. and clears to its sister unit for weaving into fabrics for removals of yarn, staple fibre yarn etc. and charged for sale of such goods to unrelated buyers is adopted. The assessee paid duty on removals of staple fibre yarn during the material period adopting a price of Rs.137/- per Kg. Subsequently they observed that they had adopted Rs.137/- erroneously and that amount represented a cum-duty price which prevailed at an earlier point of time. They ascertained assessable adopted for sale of such yarn to independent buyers just before the material period when clearances of such goods were only to its sister unit for captive consumption. They claimed refund for the excess duty paid with reference to the sale price that prevailed close to the material period. The original authority found that the assessee had not declared the applicable assessable value for clearances made to its sister unit in Annexure I as prescribed. Moreover, price of yarn fluctuated on a day to day basis the assessee could not claim refund of any excess duty paid on the basis of a value it had adopted at the time of clearance. In any case the assessees sister unit would have effected in the duty paid on the staple fibre yarn in the cost of fabrics manufactured and sold. Therefore the impugned amount of duty would have already been passed on to buyers of final products of the assessees sister unit. The refund claim was hit by the vice of unjust enrichment. In the impugned order the Commissioner (Appeals) found that the assessee had incorrectly adopted a unit price of Rs.137/- per kg. for payment of duty on clearances during the material period till it found out the error. The assessee adopted a price of Rs.114/- per kg. with effect from 7.1.1997 on deducting the error. This was the unit price realized on sales of staple fibre yarn immediately before the material period. The Commissioner (Appeals) found that the assessee had paid excess duty under a mistake of law. Relying on the judgment of the apex Court in Mahabir Kishore reported in 1989 (43) ELT 205 (SC) and judgment in New India Industries Ltd. reported in 1990 (46) ELT 23 (Bom.) wherein it was held that duty paid under mistake of law was liable to be refunded. In the second cited case it was held that the excess duty was liable to be refunded even if the same had been recovered from the customers by the manufacturer.
3. In the appeal filed by the Revenue it is contended that the invoices relied on by the assessee to indicate that the assessable value to be adopted showed dates different from those invoices which covered the impugned clearances. The assessee could not claim refund on the basis that they had erroneously adopted a wrong price for clearances. The assessee could not validly claim refund on the basis of sale price that prevailed prior to the material period. The assessee could not correlate the clearances of yarn involved with the fabrics sold by its sister concern. The fact that the sale price of the final products manufactured from the impugned yarn and sole during 10/96 t0 03/97 remained constant did not establish that the assessee had not passed on the amount claimed as refund to the buyers of fabrics.
4. We have heard the learned SDR for the Revenue. Nobody is present representing the respondents. We find that there is no dispute as to the price adopted by the assessee for the impugned clearances. As regards the sale price adopted by the assessee to work out the excess duty paid, the Commissioner (Appeals) found that the same represented the sale price when such goods were sold last before the impugned clearances to its sister unit. We find that no valid challenge can be raised against adoption of a price for sale to independent buyers just before the period when the assessee had made clearances only for captive consumption as basis for determining the assessable value. As regards unjust enrichment, the impugned order had allowed refund to the assessee relating on a judgment of the apex Court and another judgment of the Bombay High Court. The appeal filed by the Revenue does not contest the applicability of the case law relied on by the Commissioner (Appeals). We find that the impugned clearances had been made for a very brief span of time from 14.11.1996 to 6.1.1997. There is no allegation that sale of final products by the assessees sister unit at a price which prevailed during 14.11.1996 to 7.1.1997 included an element of duty which is found to have been passed on in such sales of fabrics during the said period. We find that the assessees sister unit could not have structured its accounting in such a way as to include excise duty paid on the differential price during the material period when the price of the final product remained constant before and after the short a interregnum. It is reasonable to infer that the assessee had worked out its sale price in such a way as to pass on a differential excise duty suffered by the inputs. In the circumstances we find that the impugned order does not call for any interference. The appeal filed by the Revenue is dismissed.
(Operative portion of the order was pronounced
in open court on 16.12.2008)
(P. KARTHIKEYAN) (JYOTI BALASUNDARAM)
Member (T) Vice President
Rex
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