2011 (5) TMI 787 - AT - Central Excise

Refund claim - contention of the appellants that the controversy in that regard was finally resolved by the order of the Commissioner (Appeals) dated 17-2-1992 in favour of the appellants. It is the further case of the appellants that since at the insistance of the department the appellants had paid under protest the duty in relation to the said scrap, the appellants are entitled for refund Held that - Mere contention that during the period during which the duty element was discharged by the assessee under protest as well as during the subsequent period during which there was authoritative pronouncement about the non-dutiability of the product, the price remained the same for clearance of the goods, that by itself cannot disclose whether the assessee had actually transferred the duty element upon the customer or not, no such evidence was produced by the appellants in the case in hand, appeal fails and is dismissed

Issues:
1. Refund claim related to duty paid on scrap of wires and cables.
2. Dispute over excisability of the scrap.
3. Obligation to transfer duty elements to customers.
4. Evidence required to support refund claim.
5. Applicability of previous Tribunal and Supreme Court decisions.

Analysis:
1. The appellants, engaged in manufacturing electrical wires & cables, filed a refund claim for duty paid on scrap generated during production. The dispute arose from the excisability of the scrap, which the department contested despite a previous favorable order by the Commissioner (Appeals) in favor of the appellants. The appellants claimed entitlement to a refund of Rs. 18,17,133 for duty paid under protest from 1988 to 1992. The claim was rejected by the adjudicating authority and the appeal against it was dismissed, leading to the present appeal.

2. The appellants argued, citing precedents, that the authorities erred in dismissing the refund claim based solely on the non-transfer of duty elements to customers. They contended that the price consistency before and after the excisability order indicated non-transfer of duty elements. However, the lack of evidence beyond invoices to support this claim weakened their position. The issue of whether duty elements were passed on to customers is crucial, requiring the assessee to demonstrate that the duty amount did not contribute to the total price or was not transferred to customers.

3. The appellants relied on a Tribunal decision and a Supreme Court case to support their refund claim. However, the Tribunal's decision in a similar case was based on specific facts showing a reduction in profit margin post non-dutiability pronouncement, which the appellants failed to establish. The Supreme Court case cited was inapplicable as it dealt with provisional assessments, unlike the present case. The absence of provisional assessment here meant that the decisions referenced did not support the appellants' refund claim.

4. The Tribunal concluded that without sufficient evidence to show non-transfer of duty elements to customers, interference with the impugned order was unwarranted. The appeal was dismissed based on the lack of justification for refunding the duty paid on the scrap. The decision was pronounced in court, upholding the rejection of the refund claim.

In summary, the judgment addressed the issues surrounding a refund claim for duty paid on scrap, emphasizing the need for evidence to support non-transfer of duty elements to customers. Precedents were cited but deemed inapplicable due to the lack of factual alignment with the present case. Ultimately, the appeal was dismissed for failing to establish the non-passing of duty elements to customers, leading to the rejection of the refund claim.

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