2010 (6) TMI 689 - HC - Central Excise

Whether the Tribunal was right in presuming that the cash discount was made known to the customers of the respondent prior to the clearance of the said goods from the factory in the absence of any proof in that regard? Whether the Tribunal and the authorities were right in granting the refund in the absence of proof of nexus between the goods sold and the goods cleared from the factory of the respondent? Whether the Tribunal was right in holding that the claim for refund was within time inspite of the department raising a ground that the refund claim was not submitted within the stipulated tie of 6 months as per Section 11(b) of the Central Excise Act? Whether the relevant date for submission of refund claim was the date of the clearance of the goods and payment of the excise duty or the date of sale of the goods? Held that - Tribunal on perusal of the entire records pertaining to the sixteen orders in original as well as the sixteen appellate orders which were filed before it has confirmed the orders passed by the authorities by holding that there was nexus between the payment of duty and the clearance of the goods at the depots and that in respect of trade discount given to the customers there was a circular issued and that the customers were made known about the trade discount. It has also recorded that there was no unjust enrichment and that the Commissioner had examined the records to arrive at the conclusion that the refund claimed were within the prescribed time and therefore the sanction accorded for refund of the said claims were in order. On perusal of the very same material which was filed before the Tribunal by the assessee which has been filed before this Court we find that in respect of each of the applications the contentions raised by the revenue have been considered and the concurrent finding of facts have been given by all the three authorities. Under the circumstances we are of the view that the order passed by the said authorities do not call for any interference and accordingly all the appeals are dismissed.

Summary

Issues:
1. Whether Tribunal was right in presuming cash discount was known to customers prior to goods clearance?
2. Whether refund was rightly granted without proof of nexus between goods sold and cleared?
3. Whether refund claim was within time as per Central Excise Act?

Analysis:

Issue 1:
The appeals were filed challenging the order passed by CESTAT regarding cash discount known to customers before goods clearance. The appellant contended that the respondent did not inform customers about the cash discount before clearance. The authorities held in favor of the assessee, stating that the discount information was provided before clearance. The Tribunal confirmed this finding, emphasizing the nexus between duty payment and goods clearance at depots. The judgment dismissed the appeals, upholding the decision that customers were informed about the trade discount.

Issue 2:
Regarding the nexus between goods sold and cleared, the appellant argued that there was no connection. However, the Appellate Commissioner found that the goods were segregated, and separate stock registers were maintained, establishing the correlation between goods sold from branches and those cleared from the factory. The Tribunal affirmed this decision, stating there was no unjust enrichment and that the refund claims were within the prescribed time.

Issue 3:
The appellant raised concerns about the refund applications being beyond the limitation period. However, the authorities held that the applications were filed within the stipulated time. The Appellate Commissioner upheld the lower authority's decision, confirming that the refund claims were timely. The Tribunal also agreed, stating that all necessary formalities were met, leading to the sanction of refund amounts paid during the disputed period.

In conclusion, the High Court dismissed all appeals after considering the contentions raised by both parties and finding that the orders passed by the authorities did not warrant interference. The judgment emphasized the importance of timely refund claims, the nexus between duty payment and goods clearance, and the communication of trade discounts to customers before clearance.