2009 (12) TMI 598 - AT - Central Excise

Refund - In fact, the refund has been sanctioned and credited to the Consumer Welfare Fund - central excise duty is an indirect tax and the role of the manufacturer and the dealer down the chain of sale is to pass on the burden to the ultimate consumer - Mere submission that in view of stiff competition in the market they were forced to absorb the duty burden is not sufficient proof that the appellant did not pass on the duty burden to the consumers - It is settled that the prices remaining the same prior to or after introduction of duty does not imply that the burden of duty is not passed on to the consumers as held by the Hon ble Supreme Court in the case of C.C.E. v. Allied Photographics India Ltd. as reported in (2004 -TMI - 46926 - SUPREME COURT OF INDIA) which judgment has been relied upon by the Commissioner (Appeals) - Appeal is rejected

Summary

Issues:
Appeal against the order of the Commissioner (Appeals) regarding the refund of central excise duty on ayurvedic medicines and preparations classified under 3003. The main contention is whether the duty burden was passed on to the buyers or absorbed by the manufacturer.

Analysis:
The appellant, a manufacturer of ayurvedic medicines, sought a refund of Rs. 5,51,739 paid between 1-7-03 to 30-4-04, claiming the products were not dutiable under 3003. The original authority found the refund admissible but withheld it due to unjust enrichment, crediting the amount to the Consumer Welfare Fund. The Commissioner (Appeals) upheld this decision.

The appellant argued that the goods were not chargeable to duty as per Supreme Court precedent, and any duty collected unlawfully should not be retained. They claimed they did not pass on the duty burden to buyers, citing letters to dealers about maintaining prices despite duty imposition. The appellant contended that the duty was absorbed through discounts, proving non-passing of the burden.

The Respondent argued that the duty burden was passed on to buyers as prices were adjusted considering central excise duty. The appellant's claim of not passing on the burden was refuted based on the original authority's findings. The appellant clarified that their refund claim chart was for documentation purposes only.

The Tribunal analyzed the submissions and records, noting the eligibility of the appellant for the refund. The letters to dealers, though suggesting duty absorption, lacked evidence of consumer or dealer resistance to duty-inclusive prices. The Tribunal emphasized that maintaining prices pre and post-duty imposition does not prove non-passing of the duty burden, citing relevant Supreme Court judgments.

The Tribunal concluded that the appellant failed to prove non-passing of the duty burden to buyers, as required under the law. Relying on precedent and considering the lack of evidence of duty absorption, the Tribunal upheld the decisions of the lower authorities, rejecting the appeal.

In summary, the Tribunal upheld the decision to credit the refund amount to the Consumer Welfare Fund, as the appellant could not demonstrate the non-passing of the duty burden to buyers, despite claims of absorbing the duty through price adjustments.