9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2003 (7) TMI 144 - AT - Central ExciseRefund claim - Unjust enrichment - interpretation of Section 11B, and whether the incidence of duty had been passed on - HELD THAT - Refund arose in pursuance of finalisation of provisional assessment and has been held in paragraph 95 of the judgment of the Constitution Bench of the Supreme Court in Mafatlal Inds. v. UOI 1996 (12) TMI 50 - SUPREME COURT , the requirement contained in Section 11B(2) will not apply to arising out of finalisation of provisional assessment. The Commissioner (Appeals) has thus refused to accept this point holding that by addition to a proviso under the rule on 25-6-99, applying the provisions of Section 11B(2) to refund which fall due under this rule refund arising as a result of assessment cannot be paid to an assessee unless he discharges the burden u/s 11B(2). It is contended by the appellant that it has a vested right to the refund which arose when it paid the duty in excess and that any amendment to the statute cannot operate so as to deprive a person of his vested right. The judgment of the Supreme Court in Govinddas v. Income Tax Officer, 1975 (12) TMI 144 - SUPREME COURT and of the Bombay High Court in Universal Drinks Pvt. Ltd. v. UOI, 1984 (4) TMI 59 - BOMBAY HIGH COURT are relied upon in support. We had noted that the price charged to buyers composite of many elements which duty was only one. It is perfectly possible for the price charged to the buyer to remand the same to number of factories. The manufacturer for example, may reduce the manufacturing cost, and by using cheaper raw material or by streamlining the operation reduced the price. It is also possible he may sacrifice all or part of his profit. This last aspect has been examined in detail in Mafatlal Industries in paragraph 91 of the reported order. The Court had noted that ordinarily no manufacturer will sell his product at cost plus duty since he cannot survive in business if he does so. The manufacturer would not dip into profit but into excise duty components. As we have noted in Christine Hoden the possibility that incidence of duty has been passed and price remain the same. Section 11B(2) does not require us to deal with possibility. It requires the claimant of refund to duty that the incidence of duty that has not been passed on. We cannot, as we are asked, to convert a possible presumption into a real fact. We do not find the Madras High Court's judgment an authority for the proposition canvassed by the assessee. It was concerned exemption excise duty with an interpretation of the Notification 162/66 and not whether that incidence of duty had been passed on or not. The Hindustan Metal, 2003 (2) TMI 67 - SUPREME COURT in support of the contention in order to say that the assessee could have taken refund of the suo motu of the excess. In this paragraph of the judgment, the Supreme Court cited paragraph 16 in Serai Kella Glass Works Pvt. Ltd. v. CCE 1997 (4) TMI 74 - SUPREME COURT . We are not concerned with this aspect. The question arises why the assessee found it necessary to file claim for refund. It is thus claimed for refund that is under consideration by us. Accordingly, the department's appeal is allowed and the order of the Commissioner (Appeals) set aside and the adjudicating authority's appeal allowed. The assessee's appeal is dismissed.
Issues:
- Disallowance of deduction by Asstt. Commissioner - Refund claim by the assessee - Interpretation of Section 11B regarding passing on the duty incidence - Vested right to refund and applicability of Section 11B(2) - Retrospective effect of Section 11B - Impact of price changes on duty incidence passing - Claim for refund and applicability of judicial precedents - Applicability of judgments in similar cases - Dismissal of the assessee's appeal and allowance of the department's appeal Analysis: 1. The case involves the disallowance of deductions by the Asstt. Commissioner, leading to a refund claim by the assessee. The dispute arose from the duty paid by the assessee between 1992 and 1997, which was paid provisionally pending determination of eligibility for deduction from the sales price. The Asstt. Commissioner disallowed certain deduction items, leading to appeals and subsequent orders by the Commissioner and Jurisdictional Superintendent. 2. The main contention revolved around the interpretation of Section 11B concerning the passing on of duty incidence. The Commissioner (Appeals) allowed part of the refund, stating that the requirement under Section 11B was specified for duty paid on goods cleared from the depot but not from the factory. Both the assessee and the department challenged this decision. 3. The Tribunal analyzed the arguments presented by the department and the appellant's counsel. The Commissioner's reliance on a previous Tribunal decision was scrutinized, highlighting discrepancies in the interpretation of the passing on of duty incidence based on invoice details and composite pricing. 4. The appellant contended that the refund arose from finalization of provisional assessment and cited legal precedents to support the claim of a vested right to the refund. The Tribunal discussed the applicability of Section 11B(2) to refunds arising from assessments and the impact of subsequent rule amendments on vested rights. 5. The Tribunal referenced the Supreme Court's judgment in Mafatlal Industries to address the retrospective effect of Section 11B and the absence of vested rights to refunds. The court emphasized the obligation to prove non-passing on of duty incidence as a pre-condition for refund claims. 6. The Tribunal rejected arguments based on judgments from other courts and emphasized the need to establish the non-passing on of duty incidence to claim a refund. The discussion highlighted the complexities of pricing structures and the necessity to differentiate between price changes and duty incidence passing. 7. The Tribunal dismissed arguments relying on previous judgments and reiterated the importance of proving non-passing on of duty incidence for refund claims. The court emphasized the need to adhere to Section 11B(2) requirements and not rely on presumptions or possibilities. 8. The Tribunal addressed the appellant's reliance on specific judgments and clarified the focus of the current case on the refund claim. The court highlighted the necessity for the assessee to file a claim for refund, leading to the consideration of the refund claim in question. 9. Ultimately, the Tribunal allowed the department's appeal, setting aside the Commissioner (Appeals) order and allowing the adjudicating authority's appeal. The assessee's appeal was dismissed, concluding the legal proceedings in favor of the department.
|
