2024 (12) TMI 348 - AT - Central Excise

Refund of excess duty paid inadvertently for the months of February and March 2013 at the time of clearance from their factory gate to five institutional buyers - appellant has not produced evidence to prove that the tax element has not been passed on to the buyers - HELD THAT - While it is true that new evidence is normally not allowed at the appeal stage, the C.A. s statement is only a summation of the details in the appellants record already submitted to the department. Its use will only help answer the query s raised. In fact it is a department prescribed document for the sanction of refunds. Further what the appellant is claiming is only a double payment of excise duty which could easily have been verified from the invoices and the price agreed for sale, to the institution buyers. The appellants claim that since the excise duty alone was paid for the second time at the factory gate there was no mention about the exact quantum of other taxes viz., VAT, Additional. Tax, Octroi since no such deduction was being claimed from the cum-duty price and these taxes were being paid only on clearance by their C F agents to the consumers, is also plausible and easily verifiable - The buyers having agreed to a pre-determined cum-duty price the chance of passing on the excise duty to them is remote. Denying substantive benefits on technical grounds needs to be avoided. This being so the impugned order is set aside and the matter is remanded to the Original Authority for a decision afresh on the refund claim after taking into consideration all the documents submitted by the appellant including the CA s statement and reconciliation sheet / statement - appeal disposed off by way of remand.

Summary

Issues:
Refund claim rejection under sec. 11AB of the Central Excise Act, 1944; Evidence submission at appellate stage; Calculation of duty element under section 4(1) of the Central Excise Act, 1944; Passing on duty to consumers; Verification of excess duty payment; Free supplies and duty payment; New evidence at appeal stage; Double payment of excise duty; Consideration of other taxes; Principles of natural justice in refund claim determination.

Detailed Analysis:

1. Refund Claim Rejection under sec. 11AB:
The appellant filed a refund claim for excess duty paid inadvertently for February and March 2013. The claim was rejected by the original authority under sec. 11AB of the Central Excise Act, 1944. The rejection was upheld by the Commissioner (Appeals), leading to the current appeal.

2. Evidence Submission at Appellate Stage:
The appellant submitted a table and a Certificate from their Chartered Accountant at the appellate stage to support their claim. The advocate argued that the evidence provided was a consolidation of existing details and not fresh evidence. The respondent, however, raised objections regarding the submission of evidence at the appellate stage.

3. Calculation of Duty Element and Passing on Duty to Consumers:
The appellate tribunal considered the calculation of duty element under section 4(1) of the Central Excise Act, 1944. The appellant claimed that the duty was paid on the cum-duty value agreed upon with buyers, and no duty other than excise duty was paid at the time of clearance. The tribunal examined whether the duty incidence was passed on to consumers as required by law.

4. Verification of Excess Duty Payment and Free Supplies:
The appellant asserted that the excess duty payment was verified with invoices and found to be in order. They also clarified that free supplies were made from duty-paid stocks held at C&F agents. The tribunal reviewed these claims and the documentation provided to support them.

5. New Evidence at Appeal Stage and Double Payment of Excise Duty:
While new evidence is generally not allowed at the appeal stage, the tribunal considered the CA's statement as a summary of existing records. The appellant argued that they had inadvertently made a double payment of excise duty, which could be verified from invoices. The tribunal examined the possibility of passing on excise duty to buyers and the calculation of other taxes.

6. Principles of Natural Justice in Refund Claim Determination:
The tribunal set aside the impugned order and remanded the matter to the Original Authority for a fresh decision on the refund claim. Emphasis was placed on affording the appellant a fair opportunity to present their case and ensuring a time-bound process in line with principles of natural justice.

In conclusion, the appellate tribunal directed a reevaluation of the refund claim, considering all submitted documents and statements, while ensuring procedural fairness and timely resolution of the matter.