2007 (1) TMI 432 - AT - Central Excise

Summary

Issues: Appeal against OIA No. 37/04-C.E. regarding excisability of goods, refund claim, unjust enrichment.

Excisability of Goods:
The appeal was filed against OIA No. 37/04-C.E. passed by the Commissioner of Customs and Central Excise (Appeals) Visak, concerning the excisability of goods. The appellant, a manufacturer of VP Sugar, cleared scrap for a contract price inclusive of duty payable. Initially, the excisability of the goods was disputed, but later settled in favor of the appellants. Subsequently, a refund claim was filed, which the lower authority deemed admissible but credited to the consumer welfare fund due to unjust enrichment concerns. The appellants challenged this decision before the Commissioner (Appeals) and subsequently before the Tribunal seeking relief.

Arguments Presented:
The learned consultant for the appellants argued that every purchase order received by the appellant included excise duty, and the invoicing method was structured to comply with statutory requirements under Section 12A of the Central Excise Act, 1944. The consultant also cited relevant decisions to support their case. On the other hand, the learned JDR relied on specific decisions to counter the appellant's claims.

Tribunal's Decision:
Upon careful review of the case records, the Tribunal found the issue straightforward. The contract between the appellants and the buyer clearly stated that the price for the goods included the duty payable. Even though duty was initially paid and reflected in the invoice, upon later determination that the goods were not dutiable, the Tribunal concluded that there was no passing on of the duty burden to the buyer. The Tribunal emphasized that in cases where the contract price is inclusive of duty payable, unjust enrichment does not occur even if the duty amount is reduced or eliminated. The Tribunal distinguished the relevance of case laws cited by the JCDR and allowed the appeal with consequential relief.

Operative Portion of the Order:
The Tribunal pronounced the operative portion of the order in open court upon the conclusion of the hearing, granting relief to the appellants based on the findings and reasoning provided in the judgment.