2005 (1) TMI 278 - AT - Central Excise

Summary

Issues:
1. Interpretation of duty element on Central Excise invoices
2. Dispute regarding payment of duty by customer
3. Role of Chartered Accountant in certification
4. Reliability of audited Balance Sheets and Chartered Accountant certificates
5. Passing on the incidence of duty to the buyer
6. Application of principle of unjust enrichment for refund

Analysis:

1. Interpretation of duty element on Central Excise invoices:
The Revenue appealed against the duty element indicated on Central Excise invoices, arguing that duty should only be charged and paid when necessary. The appellate tribunal noted that duty should not be indicated on invoices if not charged from the customer. The manufacturer should debit differential duty through Modvat/PLA accounts if paying under protest. The tribunal upheld the adjudicator's decision in this regard.

2. Dispute regarding payment of duty by customer:
The tribunal observed discrepancies in invoicewise entries for payment by the customer to the manufacturer. The party claimed that the customer refused to pay enhanced duty, but the amount shown in the invoices was not disputed. The tribunal found the party's claim suspect based on the evidence presented.

3. Role of Chartered Accountant in certification:
The party argued that the Chartered Accountant's role was limited to certifying actual payments made, not explaining non-recovery of duty elements. The tribunal disagreed with the Appellate Commissioner's view that the CA's certificate should distinguish transactions, emphasizing that the certificate reflected only past transactions.

4. Reliability of audited Balance Sheets and Chartered Accountant certificates:
The Commissioner (Appeals) found the manufacturer had borne the differential duty, supported by valid evidence like CA's certificate and balance sheet. The tribunal noted that the CA's certificate was crucial in establishing the non-recovery of duty from the customer. The audited balance sheets and CA certificates were considered reliable documents in the absence of other explanations.

5. Passing on the incidence of duty to the buyer:
The tribunal emphasized that the incidence of duty had not been passed on to the buyer, indicating no refund was due to the buyer or the ultimate consumer. The tribunal highlighted the importance of distinguishing transactions between the parties using documents like CA certificates and balance sheets.

6. Application of principle of unjust enrichment for refund:
The tribunal referred to case laws supporting the manufacturer's right to refund when duty is paid under protest. The tribunal found that the adjudicating authority's refusal to accept CA certificates without sufficient reasons was unjustified, and the manufacturer deserved a refund. The tribunal dismissed the Revenue's appeal, confirming the findings of the Commissioner (Appeals).