2008 (5) TMI 250 - AT - Central Excise

Refund - products were cleared on excess payment of excise duty including the quantity which was to be given free to the customers or without excluding the trade discount - held that there is no statutory requirement that commercial invoices should show the break-up of value - appellants have not realized any amount in respect of the Free goods - so they are entitled to refund - In respect of trade discount, once the quantity/trade discount is known and passed on, deduction is admissible

Summary

Issues:
1. Admissibility of discounts in the manufacture of pharmaceutical products for excise duty refund claims.
2. Application of unjust enrichment in excise duty refund claims.
3. Requirement of mentioning excise duty component in commercial invoices.
4. Correlation of excise duty invoices in clearance of goods.
5. Interpretation of statutory requirements for invoices in excise duty matters.

Analysis:
1. The Appellate Tribunal dealt with the issue of admissibility of discounts in excise duty refund claims for pharmaceutical products. The respondents provided trade discounts and a Free Unit Deal Scheme. The Tribunal remanded the matter to examine the correlation of excise duty invoices and the admissibility of discounts, requiring consideration of limitation and unjust enrichment.

2. The Commissioner (Appeals) held that unjust enrichment did not apply in the case but rejected part of the refund claims based on non-correlation or limitation. The Tribunal considered arguments from both parties, with the Revenue contending that the duty component was not mentioned in commercial invoices, invoking Section 12B on the presumption of duty passing on to buyers.

3. The Tribunal analyzed the requirement of mentioning the excise duty component separately in commercial invoices under Section 12A. The respondents were criticized for not showing the duty element in invoices raised from depots, leading to the application of Section 12B and rejection of the refund claim due to lack of evidence on duty passing.

4. The Tribunal considered the correlation of excise duty invoices in the clearance of goods, emphasizing the need for proof that the duty burden on free units had not been passed on. The Commissioner (Appeals) highlighted that the duty had been paid at the factory gate, and the appellants had not realized any amount on the free goods, thus discharging the burden of proving non-passing of duty.

5. Regarding the interpretation of statutory requirements for invoices, the Tribunal upheld the appellants' entitlement to the refund based on legal precedents and the absence of a statutory mandate for showing the value breakup in commercial invoices. The Tribunal modified the order to allow the refund, rejecting the Revenue's appeals and disposing of cross-objections.

In conclusion, the Tribunal's detailed analysis focused on the admissibility of discounts, unjust enrichment, invoicing requirements, correlation of excise duty invoices, and statutory interpretations, resulting in the rejection of Revenue's appeals and the allowance of the refund claims.