2019 (11) TMI 1260 - AT - Central Excise

Refund of excess duty paid - price variation clause - HELD THAT - On perusal of the central excise invoices issued by the appellant, I find that it had separately mentioned the central excise duty amount on ad valorem basis therein. I also find that for accounting purpose, the appellant had issued the credit note dated 30.03.2012 to the buyer of goods M/s NDPL, showing the differential amount claimed in the invoices vis- -vis the price indicated in the purchase order. Since, the excess amount claimed in the invoices was inclusive of central excise duty, the excess paid duty amount should be available as refund to the appellant inasmuch as such incidence of duty has been borne by the appellant itself and had not been passed to the buyers or any other person. The impugned order passed by the learned Commissioner (Appeals) in allowing the appeal filed by Revenue cannot be sustained - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the appellant is entitled to a refund of excess central excise duty paid?
2. Whether the impugned order passed by the learned Commissioner (Appeals) in favor of Revenue can be sustained?

Analysis:
1. The appellant, engaged in the manufacture of power cables, had removed excisable goods to a buyer pursuant to a purchase order inclusive of all taxes and duties. However, the appellant separately claimed central excise duty on invoices. The Deputy Commissioner sanctioned a refund of excess duty paid, but the Commissioner (Appeals) set it aside. The appellant argued that the duty was paid inadvertently and not passed on to the buyer. The Tribunal found that the purchase order clearly stated prices were all-inclusive, and the appellant had issued a credit note to the buyer showing the difference in rates. The Tribunal, considering the evidence presented, concluded that the excess duty amount should be refunded as it was borne by the appellant and not passed on.

2. The Revenue contended that the appellant did not submit proper documents, justifying the rejection of the refund application. However, the Tribunal found that the appellant had provided a certificate from Chartered Accountants and a detailed calculation sheet supporting the excess amount claimed in the invoices. The Tribunal held that since the duty incidence was not passed on and was borne by the appellant, the impugned order favoring Revenue was unsustainable. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant, granting the benefit of refund.

This judgment highlights the importance of adhering to purchase order terms, the burden of proof in claiming refunds, and the necessity to demonstrate that duty incidence was not passed on to be eligible for a refund.