2018 (5) TMI 2047 - AT - Central Excise

Rejection of refund claim consequent to finalizing of assessment - passing of incidence of duty under dispute - applicability of rule 7(6) of Central Excise Rules, 2002 - appellant seeks support of the decision of the Hon'ble Supreme Court in MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA 1996 (12) TMI 50 - SUPREME COURT - HELD THAT - In the case of MAFATLAL INDUSTRIES LTD. it was held that Refunds ordered by the statutory authority concerned which have become final. It need hardly be stated, that Section 11B(1), the proviso(I) thereto, Section 11B(2) and Section 11B(3) read together will apply, only to (1) refund applications made under the statute and filed before the Amendment of the Act and still pending on the date of commencement of Amendment Act, 1991 and (2) applications contemplated under law to obtain refund and filed after the commencement of the Amendment Act, 1991. It was also informed that order-in-original no. 17/20-18 dated 31st May 2017, arising from remand order no. A/86084/17/SMB dated 13th February 2017 in disposing off appeal no. E/1328/2009 challenging order-in-appeal no. YDB/75/M-III/2009 dated 17th September 2009 of Commissioner of Central Excise (Appeals), Mumbai -III, had accepted the very same documents for the years 1999-2000 to sanction the refund claim. Considering the decision of the Hon'ble Supreme Court as well as the submissions pertaining to the disposal of the refund claim for the earlier periods, the impugned order is set aside and matter remanded back to the original authority for fresh determination of the dispute in accordance with the law - appeal allowed by way of remand.

Summary

Issues:
Refund claim under rule 7(6) of Central Excise Rules, 2002 - Burden of proof regarding passing on of duty - Weightage to Chartered Accountant certificate and books of account - Applicability of earlier tribunal orders and Supreme Court judgments.

Analysis:
The appeal by M/s CEAT Limited challenges the rejection of a refund claim amounting to &8377;21,39,201/- following the finalization of assessment for 2006-07. The appellant argues that the refund should be guided by rule 7(6) of Central Excise Rules, 2002, citing the decision in Mafatlal Industries Ltd v. Union of India. The appellant emphasizes the importance of the Chartered Accountant certificate and books of account in establishing that the duty burden was not passed on, referring to the judgment of the Hon'ble High Court of Madras. The tribunal's previous order in a similar case for 2002-03 is also highlighted, where the tribunal emphasized the significance of entries in books of account related to the refund amount.

The appellant further mentions an order-in-original from 2017 accepting similar documents for the years 1999-2000 to sanction a refund claim. However, the Authorized Representative relies on the Supreme Court decision in Commissioner of Central Excise, Madras v. Addison & Co Ltd, emphasizing that if the duty burden has been passed on, the claimant is not entitled to a refund to prevent unjust enrichment. The judgment clarifies the conditions under which a refund claim can succeed, stressing that the burden of proof lies with the claimant to demonstrate that the duty burden was not transferred to another party.

In light of these arguments and the conflicting decisions, the tribunal sets aside the impugned order and remands the matter to the original authority for a fresh determination in accordance with the law. The decision underscores the importance of establishing the non-passing on of duty burden for a refund claim to be successful, as outlined in relevant legal precedents and statutory provisions.

Conclusion:
The judgment addresses the complexities involved in refund claims under Central Excise Rules, emphasizing the burden of proof regarding the passing on of duty. It underscores the significance of documentary evidence, such as Chartered Accountant certificates and books of account, in establishing the non-transfer of duty burden. The decision highlights the need for a thorough examination of facts and adherence to legal principles in determining the validity of refund claims, as guided by relevant judicial precedents and statutory provisions.