2007 (11) TMI 117 - AT - Central Excise

Duty was paid on the free samples which were cleared as a combination pack which was assessed under the provisions of Section 4A of the CEA - they had not charged any amount from the customers for the free sample - evidence shown regarding non-passing of amount of refund to their buyers - In the cases of assessment done u/s 4A the evidence is only the invoice document which would indicate whether the refund claim is passed on to the customer or not refund allowed

Summary

Issues involved:
Refund of duty paid on free samples under Section 4A of the Central Excise Act, 1944.

Analysis:
The appeal was against the order-in-appeal regarding the refund of duty on free samples cleared as a combination pack under Section 4A of the Central Excise Act, 1944. The adjudicating authority ruled in favor of the respondent, stating that they did not charge customers for the free samples in the combination pack. The Revenue appealed to the Commissioner (Appeals), who rejected the appeal. The Commissioner emphasized that the key issue was whether the burden of duty on free samples was passed on by the respondent and if they actually passed it on. It was noted that since the free samples were part of the combination pack, the respondent could not have realized more than the Maximum Retail Price (MRP) and, therefore, did not pass on the duty burden. The Commissioner held that the principle of unjust enrichment did not apply in this case, as there was no scope for the respondent to pass on the duty burden. The Commissioner also highlighted that the appeal was limited to a specific point within the competence of the Commissioner, and the respondent could not raise additional points at that stage. The Commissioner found that the evidence presented by the respondent indicated that the refund amount was not passed on to buyers, as evidenced by the invoices. Therefore, the Commissioner upheld the decision to dismiss the Revenue's appeal.

In conclusion, the Member (J) found that the Commissioner's decision to dismiss the Revenue's appeal was correct and did not require any interference. The appeal was rejected, and the cross-objection supporting the impugned order was also disposed of. The judgment emphasized the importance of evidence in cases of assessment under Section 4A, specifically the invoices, as crucial indicators of whether the refund claim had been passed on to customers. The decision highlighted the specific legal course for challenging refund claims and the limited scope of departmental appeals in such matters.