2003 (10) TMI 108 - AT - Central Excise

Summary

Issues:
Refund claim rejection based on burden of duty passed on to buyers.

Analysis:
The appellants, M/s. O.N.G.C., filed a refund claim for excess duty paid on LPG clearance. The claim was rejected as burden of duty passing on to buyers was not proven. The appellants argued that assessable value calculation error led to excess duty payment, later adjusted by the buyer, M/s. IOC. They contended fixed LPG price prevented duty burden transfer. A Chartered Accountant Certificate confirmed excess duty recovery by M/s. IOC from subsequent bills.

The revenue claimed appellants recovered duty from customers, disqualifying refund per Section 11B of the Central Excise Act. The Tribunal noted appellants' initial higher duty payment due to calculation error. M/s. IOC, the buyers, rectified the excess payment in subsequent bills. The revenue did not dispute these facts.

The Commissioner (Appeals) relied on a Tribunal decision later overturned by the Madras High Court. Another Tribunal case cited by the Commissioner involved credit notes issuance after duty recovery, unlike the present case where M/s. IOC promptly rectified the excess duty payment.

Referring to the Supreme Court's ruling in Mafatlal Industries Ltd. v. Union of India, the Tribunal noted the presumption that duty burden passes on to buyers unless proven otherwise. In this case, despite initial higher duty payment by the appellants and customers, the immediate rectification by M/s. IOC demonstrated duty burden non-transfer. Consequently, the Tribunal set aside the order, allowing the appeal.