2018 (9) TMI 568 - HC - Central Excise

Refund claim - transfer of refund amount to the Consumer Welfare Fund in terms of Section 12C of the Central Excise Act - Section 11B of the Central Excise Act - issuance of two parallel show cause notices one for refund and other for recovery of demand on the buyer for availment of credit - unjust enrichment. Held that - The Tribunal has seriously committed an error in following the Division Bench judgment of the Tribunal in spite of the fact that Single Bench decision of the Tribunal was confirmed by the Jurisdictional High Court in A.K. Spintex Ltd. 2008 (11) TMI 89 - RAJASTHAN HIGH COURT - The matter is required to be remitted back to the Original Authority and Original Authority will examine the matter and decide the same in accordance with law. Appeal allowed by way of remand.

Summary

Issues:
Challenge to Tribunal's judgment allowing department's appeal - Transfer of refund amount to Consumer Welfare Fund - Issuing parallel show cause notices - Proof of no unjust enrichment - Interpretation of Section 12B - Error in Tribunal's decision - Remand to Original Authority.

Analysis:
The Appellant challenged the Tribunal's judgment allowing the department's appeal. The High Court framed questions of law regarding the transfer of refund amount to the Consumer Welfare Fund and the issuance of parallel show cause notices. The Court referred to a previous decision emphasizing that the burden of excise duty is not passed on to the purchaser if debit and credit notes are issued. Section 12B places the burden of proof on the assessee, which can be rebutted by evidence showing no passing of burden. The Court rejected the revenue's argument that this mechanism could lead to revenue pilferage. The judgment favored the Assessee, dismissing the appeal against the revenue.

The High Court noted that the Tribunal erred in following a Division Bench judgment instead of a Single Bench decision confirmed by the Jurisdictional High Court. Consequently, the matter was remitted back to the Original Authority for re-examination based on the law declared by the Jurisdictional High Court. The appeal was disposed of accordingly, highlighting the importance of following the correct legal precedents and decisions in such matters.