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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2003 (12) TMI AT This

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2003 (12) TMI 386 - AT - Central Excise

Issues Involved:
1. Whether the appellants have proved that the incidence of duty has not been passed on to their customers.
2. Whether the refund claim is hit by time-bar.
3. Whether the appellants are eligible for the refund claim.

Issue-wise Detailed Analysis:

1. Proof of Incidence of Duty Not Passed on to Customers:
The Commissioner of Central Excise (Appeals), Trichy, held that the appellants did not prove that the incidence of duty was not passed on to their customers. The appellants argued that the evidence required was available on record and that the claim should not be rejected on the grounds of non-submission of evidence to rule out unjust enrichment. They contended that the pricing of spare parts remained constant irrespective of the variation in the rate or quantum of excise duty, which should negate the question of passing on the duty incidence. The Tribunal examined the requirement under Section 11B(1) of the Central Excise Act, which mandates that the refund application must be accompanied by documentary or other evidence to prove that the incidence of duty has not been passed on to the customers. The Tribunal found that no such evidence was submitted by the appellants, and mere assertions were insufficient. The Tribunal referred to the Supreme Court's judgment in Mafatlal Industries v. U.O.I., which emphasized that the burden of proving that the duty incidence was not passed on lies with the claimant. Consequently, the Tribunal upheld the finding that the appellants did not meet the requirement of proving that the incidence of duty was not passed on to their customers.

2. Time-bar on Refund Claim:
The Assistant Commissioner rejected the refund claim on the grounds of limitation, stating that the refund application was not submitted within the prescribed time frame. The lower appellate authority modified this decision, stating that the claim should have been sanctioned but credited to the Consumer Welfare Fund. The Tribunal noted that the refund claim for the period from 1-7-95 to 31-7-95 was submitted on 31-10-95, which was within the six-month period stipulated under Section 11B. The Tribunal referred to precedents such as KLRF Textile Unit v. CCE and Wood Working Centre v. CCE, which held that initial claims within the limitation period should not be barred by time even if formal claims were filed later. Therefore, the Tribunal concluded that the refund claim was not hit by time-bar.

3. Eligibility for Refund Claim:
The appellants argued that they continued to pay duty as per the un-amended provisions of Rule 57F(ii) even after the amendment and claimed a refund due to excess payment. The Tribunal observed that the refund claim must be accompanied by evidence to establish that the incidence of duty was not passed on to any other person, as required under Section 11B(1). The Tribunal found that the appellants did not provide such evidence and merely stated that the duty paid on occasional and unpredictable removals did not determine the price. The Tribunal reiterated the Supreme Court's stance in Mafatlal Industries that the presumption under Section 12B, which deems that the duty incidence is passed on to the buyer unless proven otherwise, is consistent with the nature of indirect taxes. The Tribunal concluded that the appellants failed to prove that the incidence of duty was not passed on to their customers and upheld the lower appellate authority's decision to credit the refund amount to the Consumer Welfare Fund.

Conclusion:
The Tribunal dismissed the appeals, finding no merit in the appellants' arguments. The Tribunal upheld the lower appellate authority's decision to sanction the refund but credit the amount to the Consumer Welfare Fund due to the appellants' failure to prove that the incidence of duty was not passed on to their customers. The Tribunal also clarified that the refund claim was not time-barred, but the appellants did not meet the evidentiary requirements under Section 11B.

 

 

 

 

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