2019 (12) TMI 1063 - HC - Central Excise

Refund of excise duty - unjust enrichment - allegation that the appellant has not passed on the duty to the buyers, as such is entitled to refund - rejection on the ground that the invoices issued by the appellant between 11.09.2003 to 30.01.2004 clearly show that the Central Excise Duty @ 16% separately was charged from the customers/buyers - Presumption of incidence of duty. Whether the Tribunal was under obligation to consider all the material evidence available before it and while discarding the same, it was incumbent upon the Tribunal to record reasons? HELD THAT - From the bare perusal of Section 12 (B) of the Act, 1944, the intention of the legislature is crystal clear that it is the duty of the concerned to prove that he has not passed on the excise duty to the buyer. From the material placed, particularly two sets of invoices and letters written by the appellant to the buyers and the relevant portion of the order dated 10.12.2009, the position which emerges out is to the effect that the Tribunal has not considered the invoices placed by the appellant before it along with the letters of appellant written to the buyers and after considering both the material evidence viz. invoices and letters written by the appellant to the buyers, the Tribunal has not recorded reasons for coming to the conclusion that the appellant is not entitled for refund of the amount in issue. A judgment is the expression of the opinion of the Court arrived at after due consideration of the evidence and the arguments, it means a judicial determination. Thus, the law can by summarised that the 'judgment' means a decision adjudicating upon the legal rights and liabilities of the parties after appreciating the evidence on record in a particular fact-situation, and that has to be duly supported by reasons - the Tribunal was under obligation to consider all the material evidence available before it and while discarding the same, it was incumbent upon the Tribunal to record reasons and in not doing so, the Tribunal erred in law and fact both. Considering the undisputed submissions made by the learned counsel for the appellant that certain documents were filed by the appellant before the Tribunal through supplementary affidavit and the Tribunal failed to consider the same, we are of the view that the matter may be remanded back to the Tribunal to decide the same afresh - appeal allowed by way of remand.

Summary

Issues Involved:
1. Unjust enrichment.
2. Consideration of evidence by the Tribunal.
3. Application of legal principles from previous judgments.
4. Recording of reasons for decisions by judicial bodies.

Detailed Analysis:

1. Unjust Enrichment:
The appellant challenged the orders on the ground that there was no unjust enrichment, asserting that the Central Excise Duty @ 16% was not passed on to the buyers. The appellant argued that the findings of unjust enrichment by the Authorities were perverse and contrary to the evidence, including invoices and correspondence. The respondent countered by citing Section 12(B) of the Central Excise Act, 1944, which presumes that the incidence of duty has been passed on to the buyer unless proven otherwise. The Tribunal, however, concluded that the appellant failed to provide sufficient proof that the duty burden was absorbed and not passed on to the consumers.

2. Consideration of Evidence by the Tribunal:
The Tribunal was criticized for not considering all the material evidence, specifically the invoices and letters addressed to the buyers, which were claimed to prove that the duty was not passed on. The Tribunal’s decision was based on the presumption rather than a thorough examination of the evidence. The High Court noted that the Tribunal did not record reasons for rejecting the evidence submitted by the appellant, which is a legal requirement for a judicial or quasi-judicial order.

3. Application of Legal Principles from Previous Judgments:
The appellant argued that the Tribunal ignored the principles laid down in previous judgments such as C.C.E. v. Panihati Rubber Ltd. and Auro Lab v. C.C.E. Madurai, which were relevant to their case. Instead, the Tribunal relied on the case of C.C.E. v. Allied Photographics India Ltd., which the appellant contended was not applicable to the facts of their case. The High Court observed that the Tribunal should have considered the relevant legal principles from all cited cases before reaching its conclusion.

4. Recording of Reasons for Decisions by Judicial Bodies:
The High Court emphasized that any judgment must be based on reason and should clearly state the grounds on which the decision is based. This requirement ensures that the decision is intelligible and meaningful, allowing appellate or revisional courts to assess its correctness. The Tribunal’s failure to provide reasons for discarding the appellant’s evidence was a significant error. The High Court cited several precedents underscoring the necessity of reasoned judgments, including Surendra Singh v. State of Uttar Pradesh and Kushuma Devi v. Sheopati Devi.

Conclusion:
The High Court set aside the Tribunal’s order dated 10.12.2009 and remanded the matter back to the Tribunal for fresh consideration. The Tribunal was directed to evaluate all the material evidence and provide reasons for its conclusions. The appeal was allowed with no order as to costs.