2012 (10) TMI 642 - AT - Central Excise

Refund claim - Appellant had paid the duty under protest Held that - Chartered accountant s certificate shows that the realization to the appellant had reduced on account of the levy of education cess and no change in prices to the dealers - appellant had not passed on the incidence of the new levy to any other person and refund if paid would not cause any unjust enrichment to the appellant refund allowed

Summary

Issues:
1. Whether the appellants are entitled to a refund of Education Cess paid on goods manufactured before the imposition of the levy but cleared after.
2. Whether the burden of proof lies with the appellants to show that the incidence of duty has not been passed on to consumers.
3. Whether the refund granted can be recovered without issuing a demand notice under Section 11A in the context of an appeal against the refund order.

Analysis:
1. The issue revolved around the entitlement of the appellants to a refund of Education Cess paid on goods manufactured before the imposition of the levy but cleared after. The Department clarified that the new Cess need not be paid on goods manufactured before the levy date. The Assistant Commissioner initially granted the refund, but the Commissioner (Appeal) reversed the decision citing unjust enrichment concerns. The Tribunal remanded the matter to the Commissioner (Appeal) for lack of opportunity to prove non-passing of incidence. The Commissioner (Appeal) again denied the refund, leading to the current appeal.

2. The burden of proof regarding passing on the duty incidence to consumers was a crucial aspect. The appellants argued that the M.R.P. and rebate remained unchanged, they paid the Cess under protest, did not collect it from buyers, and presented a Chartered Accountant's certificate showing reduced realization post-Cess payment. They distinguished their case from precedent where duty was admitted to be passed on. The Department contended that mere payment under protest and a certificate were insufficient to prove non-passing of incidence, citing precedents and lack of specific evidence in the current case.

3. The issue of recovering the granted refund without issuing a demand notice under Section 11A during an appeal was raised. The appellants relied on precedents to argue against recovery without a notice, while the Department emphasized the burden of proof on the appellants and the changed time limits for issuing demands and filing appeals. The judgment did not delve deeply into this issue due to its non-critical nature for the case's decision.

In conclusion, the Tribunal found in favor of the appellants, stating that they had not passed on the duty incidence and were entitled to the refund. The judgment highlighted the specific evidence presented, lack of passing on the incidence, and the Chartered Accountant's certificate as supporting factors. The issue of recovery without a demand notice was briefly touched upon but not extensively analyzed due to its non-determinative nature in this case.