2017 (5) TMI 1331 - AT - Central Excise

Valuation - erection charges - includibility - Held that - since no excise duty is payable on the installation cost as has already been settled, it cannot be presumed that the disputed duty has been recovered from M/s. IOCL - From the evidence on record, it cannot be construed that the duty burden has been passed on - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Whether erection charges should be a part of transaction value for excise duty calculation.
2. Whether the refund amount should be paid in cash or credited to the Consumer Welfare Fund.
3. Burden of proof regarding passing on the duty incidence to the customer.

Analysis:
1. The appeal concerned the inclusion of erection charges in the transaction value for excise duty calculation. The original authority held that the erection charges should be part of the transaction value, leading to a demand for duty. However, the Commissioner(Appeals) took a contrary view, resulting in the refund of duty paid by the respondent. The dispute arose from the nature of the contract with M/s. IOCL, where the respondent supplied signage boards and undertook their installation at IOCL retail outlets.

2. The issue of whether the refund amount should be paid in cash or credited to the Consumer Welfare Fund was a point of contention. The Deputy Commissioner initially ordered the refund to be credited to the fund, but the Commissioner(Appeals) directed the refund to be paid in cash. The Revenue challenged this decision, arguing that the burden of duty passing on to the customer was not disproved by the respondent.

3. The burden of proof regarding passing on the duty incidence to the customer was a crucial aspect of the case. The Revenue contended that the duty burden is presumed to be passed on to the customer unless proven otherwise, citing Section 12B of the Central Excise Act. They relied on case laws to support their argument that duty refund can only be claimed by the entity bearing the duty incidence ultimately. However, the respondent argued that the duty liability was clearly indicated in the invoices for goods supplied, and the installation payments received separately did not include any taxes.

Judgment:
The Tribunal analyzed the evidence, including invoices and bills, to determine the passing on of duty burden. They found that the installation cost did not attract excise duty, as previously settled. The Tribunal noted that the invoices from the factory indicated excise duty separately, while the bills from IOCL showed a consolidated amount without any tax on installation. Relying on precedent and contract provisions, the Tribunal concluded that the duty burden was not passed on to IOCL. Therefore, they upheld the Commissioner(Appeals) decision to refund the amount in cash, rejecting the Revenue's appeal.