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2014 (3) TMI 922 - HC - Central ExciseDenial of refund claim - Unjust enrichment - Classification of goods Gulabari - Classification under sub heading 3003.30 or under sub heading 3303.00 - Whether, under the facts and circumstances of the case the respondents have rebutted the statutory presumption under Section 12-B of the Act so as to be entitled for refund under Section 11-B of the Act - Held that - differential excise duty paid by the appellant after the order dated 11.12.1997 related to the period 1st March, 1990 to 30 September, 1997. The classification of the product by the department, which imposed 18% excise duty, was challenged by the respondent and in pursuance to the demand as made by order dated 11.12.1997, the deposits were made by the respondent under protest after writing letter dated 18.12.1997 which has been brought on the record as Annexure-C.A.-3. In the letter dated 18.12.1997, it was clearly mentioned that the respondent does not agree with the classification of the product. It was further mentioned that the respondent is not changing the maximum retail price or wholesale price of the product. When the payment of differential excise duty was made by the respondent under protest and the M.R.P. has not been raised by the respondent, we fail to see that how the incidence of such duty shall be treated to have been passed on the buyer of such goods. The Assistant Commissioner Central Excise had referred to the letter dated 18.12.1997 sent by the respondent by which it was mentioned that respondent has not change maximum retail price or wholesale price and is paying the duty under protest. Amount of ₹ 10,94,263/- was deposited by the party on their own has not been shown in the balance sheet of relevant year 1997-98 in the schedule of loans and advances to be recovered for the department is not sustainable as the party had deposited this amount under protest as an advance payment of central excise duty pending enquiry and investigation and intimated this fact to the Additional Director General of DGAE, Central Excise New Delhi vide their letter dated 06.12.1997 and has also shown in their Balance Sheet of the company for whole of the group in the relevant year 1997-98 in the schedule of OTHER CURRENT ASSETS . - Revenue had not disputed the facts of examination of balance sheet in their Grounds of Appeal. So, it is evident from the record that the Commissioner (Appeals) allowed the refund claim after examining the unjust enrichment. Hence, I do not find any reason to interfere the order of the Commissioner (Appeals) - Decided against Revenue.
Issues Involved:
1. Whether the Tribunal's finding that the refund claim amount is shown in the balance sheet as Excise duty recoverable is perverse and contrary to evidence. 2. Whether the respondents have rebutted the statutory presumption under Section 12-B of the Central Excise Act to be entitled for a refund under Section 11-B of the Act. Detailed Analysis: Issue 1: Tribunal's Finding on Refund Claim Amount in Balance Sheet - Facts and Arguments: The respondent claimed that their product "Gulabari" was classified under subheading 3003.30 as an Ayurvedic Medicament, but the department classified it under subheading 3303.00, imposing an 18% excise duty. The respondent paid the differential duty under protest and later sought a refund after the Tribunal set aside the demand. The Assistant Commissioner allowed the refund but credited it to the "Consumer Welfare Fund" citing unjust enrichment. The Tribunal allowed the respondent's appeal, noting the amount was shown as excise duty recoverable in the balance sheet. - Judgment: The Tribunal relied on the balance sheet entries showing the amount as recoverable excise duty. The High Court upheld this finding, noting that the balance sheet supported the respondent's claim that the duty was not passed on to the buyer. The Tribunal's decision was not perverse or contrary to evidence. Issue 2: Rebuttal of Statutory Presumption under Section 12-B - Facts and Arguments: The appellant argued that under Section 12-B, there is a presumption that the duty incidence is passed to the buyer unless proven otherwise. The respondent contended that they paid the duty under protest without increasing the M.R.P., and thus did not pass the duty to the buyer. The Tribunal accepted this argument, noting the balance sheet entries and the protest letter. - Judgment: The High Court agreed with the Tribunal, noting that the respondent paid the duty under protest and did not increase the M.R.P., thereby rebutting the presumption under Section 12-B. The Tribunal's reliance on the balance sheet and other evidence was appropriate, and the respondent successfully proved that the incidence of duty was not passed to the buyer. Conclusion: The High Court dismissed the appeal, affirming the Tribunal's decision. Both issues were resolved in favor of the respondent, confirming that the refund claim amount shown in the balance sheet was not contrary to evidence and that the statutory presumption under Section 12-B was satisfactorily rebutted.
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