2001 (8) TMI 744 - AT - Central Excise

Summary

Issues:
1. Delay in delivery of goods leading to refusal by consignee.
2. Seizure of goods by department due to invalid gate passes.
3. Claim for refund of duty paid twice on the same goods.
4. Determination of the incidence of duty passed on to the buyer.
5. Bar of limitation for refund claim.

Analysis:

1. The appellant faced a situation where a consignment of tin containers meant for toothpowder storage was delayed due to a breakdown in the transporting truck, resulting in the consignee refusing the goods. The department seized the goods upon finding invalid gate passes during transportation to another location, despite the appellant paying duty and subsequently being allowed provisional clearance pending adjudication.

2. Subsequently, the appellant sought a refund of duty paid twice on the same goods, initially in 1986 and then under protest in 1992. The Assistant Collector rejected the refund claim citing limitation under Section 11B and the transfer of duty incidence to the buyer. The rejection was upheld by the Commissioner (Appeals), leading the appellant to appeal to the Tribunal.

3. The crucial issue revolved around determining which payment the refund claim was related to, as the limitation period varied depending on whether it was the first or second payment. The Assistant Collector acknowledged the second payment was made under protest, but argued that the duty had been recovered from the buyer, justifying the rejection of the refund claim.

4. The Tribunal analyzed the concept of the incidence of duty passed on to the buyer, emphasizing that the buyer should not bear the duty burden twice if the manufacturer paid it twice. It clarified that the duty incidence passed on would be half of the total duty paid by the manufacturer, typically reimbursed by the buyer when paying for the goods purchased.

5. The Tribunal disagreed with the Assistant Commissioner's view that the duty transferred to the buyer was from the second payment. Instead, it reasoned that the duty passed on would likely be from the invoice issued during the initial clearance of goods from the factory. As a result, the Tribunal found in favor of the appellant, allowing the appeal and setting aside the order denying the refund claim.