2008 (2) TMI 702 - AT - Central Excise

Summary

Issues:
Inclusion of turnover tax in the assessable value of goods cleared; Eligibility for refund of excess duty paid due to inclusion of turnover tax; Unjust enrichment and burden of proof.

Analysis:

Issue 1: Inclusion of turnover tax in the assessable value of goods cleared
The appeal was filed against an order related to the inclusion of turnover tax in the assessable value of goods cleared. The appellant argued that turnover tax should not be included in the assessable value, which was settled law. The Commissioner (A) allowed the claim for refund of excess duty paid due to the inclusion of turnover tax. However, it was ordered that the eligible refund should be transferred to the Consumer Welfare Fund unless the appellant proved that the duty burden had not been passed on to the buyer, indicating the concept of unjust enrichment.

Issue 2: Eligibility for refund of excess duty paid due to inclusion of turnover tax
The appellant sought a refund of the excess duty paid on account of the inclusion of turnover tax. The lower authority rejected the claim, but the Commissioner (A) allowed it under the condition that the duty burden had not been passed on to the buyer. The appellant presented a certificate from a Chartered Accountant certifying the payment of turnover tax, but it did not establish that the duty burden had not been passed on to the buyers. The burden of proof was on the appellant to show that the duty burden had not been passed on, as there is a statutory presumption that it has been passed on. The Tribunal found the certificate insufficient to prove otherwise, leading to the rejection of the appeals.

Issue 3: Unjust enrichment and burden of proof
The Tribunal emphasized that in cases like this, the burden is on the appellant to demonstrate that the duty burden has not been passed on to the buyers. The Chartered Accountant's certificate, while confirming the payment of turnover tax, did not fulfill the requirement of proving that the duty burden had not been passed on. The Tribunal upheld the statutory presumption that the duty burden has been passed on to the buyer and concluded that the appellant had not provided sufficient evidence to the contrary. Therefore, the impugned order was deemed legal and proper, leading to the rejection of the appeals.

In conclusion, the Tribunal rejected the appeals as the appellant failed to establish that the duty burden had not been passed on to the buyers despite the certificate provided, emphasizing the concept of unjust enrichment and the burden of proof in such cases.