2010 (10) TMI 933 - HC - Central Excise

Refund claim - unjust enrichment - Section 11-B of the Act - case of appellant is that mere fact that in gate passes/invoices, duty payable was mentioned which was never factually received, it could not be held that the assessee had passed on burden to the consumers and thus the finding of unjust enrichment was erroneous - Held that - once the gate passes/invoices showed that that duty was part of the invoices issued, in such a situation presumption is that the duty has been passed on to the consumers and the said presumption is not rebutted merely by the fact that the assessee did not actually realize the amount - Once the duty is added in the invoices, the purchaser gets benefit of MODVAT credit. Learned counsel for the assessee has not been able to show any law that in such a case, the burden on the assessee will stand discharged - appeal dismissed - decided against assessee.

Summary

Issues:
1. Claim for refund of duty not passed on to customers.
2. Applicability of Section 11-B of the Act when duty paid under protest.
3. Compliance with judgments of the Hon'ble Apex Court.

Analysis:
1. The appellant, a manufacturer of cold rolled strips, filed a refund application stating duty paid between 1-4-1992 to 31-3-1998 was not payable. The matter was remanded by the Hon'ble Supreme Court to examine unjust enrichment. The adjudicating authority, upheld by the Tribunal, found the duty burden passed on to consumers based on duty mentioned in gate passes/invoices. The Tribunal emphasized that duty indication in invoices is crucial for buyers to know payable duty, and absence of such indication shifts burden to prove non-passing of duty to the assessee. The appellant's argument of not receiving the duty amount mentioned in invoices was rejected as the duty inclusion in invoices creates a presumption of passing on the burden to consumers, benefiting them with MODVAT credit. Without legal support for discharging this burden, the finding against the appellant was upheld, and no substantial legal question arose.

2. The appellant contended that mentioning duty in gate passes/invoices, not actually received, does not prove passing on the duty burden to consumers. However, the authorities held that once duty is part of invoices, it is presumed to be passed on, benefiting consumers with MODVAT credit. The absence of legal support for discharging this burden led to the dismissal of the appeal.

3. The Tribunal's decision was based on established legal principles and judgments, emphasizing the significance of duty indication in invoices and the burden on the assessee to prove non-passing of duty. The appellant's failure to provide legal grounds for discharging this burden resulted in the dismissal of the appeal.

This judgment highlights the importance of duty indication in invoices, the presumption of duty passing on to consumers, and the burden on the assessee to prove otherwise. The decision underscores the need for legal support to rebut such presumptions and the implications of failing to do so in refund claims under the Central Excise Act, 1944.