2003 (9) TMI 183 - AT - Central Excise

Summary

Issues Involved:
1. Entitlement to concessional duty rate under Notification No. 123/89-C.E.
2. Refund claim and unjust enrichment.
3. Examination of invoices to determine the passing of duty incidence.

Issue-wise Detailed Analysis:

1. Entitlement to Concessional Duty Rate:
The respondents' claim for payment of duty at the concessional rate of Rs. 115.00 per M.T. under Notification No. 123/89-C.E. was initially rejected by the Assistant Commissioner. Subsequently, the Commissioner (Appeals) allowed the claim, confirming that the respondents were entitled to the benefit of the said notification during the relevant period. This order was accepted by the Revenue, and no appeal was filed against it.

2. Refund Claim and Unjust Enrichment:
Following the favorable order, the respondents filed a refund claim for the excess duty paid. The Assistant Commissioner allowed the refund on merits and limitation but directed that the refund be credited to the Consumers' Welfare Fund, citing that the incidence of duty had been passed on to the buyers. The respondents appealed this decision, and the Commissioner (Appeals) ruled in their favor, stating that the duty incidence was not passed on to the buyers. This ruling was challenged by the Revenue before the Tribunal, which remanded the matter back to the Commissioner (Appeals) for a fresh examination of the invoices.

3. Examination of Invoices:
Upon remand, the Commissioner (Appeals) examined the invoices and concluded that the duty incidence was not passed on to the buyers. The respondents supported their contention with several points:
- The goods were sold at negotiated prices based on market conditions.
- Invoices charged only the agreed prices, with no separate charge for Central Excise duty.
- Prices were firm and not variable based on duty rates.
- The duty was paid by the respondents from their own funds, without passing any part of it to the buyers.
- Certificates from buyers confirmed that they paid only the agreed prices and were not concerned with the duty.

The Commissioner (Appeals) also noted that the average ex-factory price remained consistent before, during, and after the relevant period, indicating that the duty was not passed on to the buyers. Reliance was placed on various judicial decisions, including CCE v. Maruti Udyog Limited, Commissioner of Sales Tax v. Mool Chand Shyam Lal, and others, which supported the view that when the duty is not separately indicated in the invoices and the price remains constant, the duty incidence is not passed on to the buyers.

Conclusion:
The Tribunal upheld the findings of the Commissioner (Appeals), noting that the Revenue failed to provide specific evidence to rebut the factual findings. The Tribunal confirmed that the respondents had successfully demonstrated that the duty incidence was not passed on to their customers, and thus, the refund amount should not be credited to the Consumers' Welfare Fund but rather refunded to the respondents. The appeal filed by the Revenue was rejected.