2010 (2) TMI 392 - AT - Central Excise

Refund- The appellant paid excise duty including education cess in respect of the said closing stock and when it was cleared and preferred a refund claim paid on pre-budget stock. The original authority allowed the refund by way of credit in cenvat account. The Commissioner took up the matter on review and directed the Department to file appeal before Commissioner (Appeals). The Commissioner (Appeals) ordered that the refund amount be deposited into the Consumer Welfare Fund on the ground that the appellant has not proved that the burden was not passed on to the consumers. Held that- Merely because the prices prior to levy of education cess and those after levy of education cess remained the same no presumption can be made that the duty burden has not been passed on to the consumers. - non-reliance on the Chartered Accountant s certificate by the Commissioner (Appeals) cannot be faulted. - order rejecting refund upheld.

Summary

Issues: Refund claim for education cess paid on pre-budget stock; Burden of duty passed on to consumers; Interpretation of invoices and pricing strategy; Applicability of legal precedent; Compliance with statutory limits for appeal

Refund Claim for Education Cess:
The appellant had a closing stock of cement on the Budget day, and education cess became payable the next day. The appellant paid excise duty including education cess for the stock and claimed a refund. The original authority allowed the refund as a credit in the cenvat account. However, the Commissioner (Appeals) directed the refund amount to be deposited into the Consumer Welfare Fund, stating that the burden was passed on to consumers. The appellant argued that they did not pass on the burden and relied on a Chartered Accountant Certificate, which the Commissioner did not challenge.

Burden of Duty Passed on to Consumers:
The appellant contended that despite maintaining the same prices before and after the levy of education cess, they did not pass on the duty burden to consumers. The Commissioner (Appeals) found that the duty burden was passed on based on the invoices indicating education cess payable and the basic value inclusive of all excise duties. The Commissioner relied on a Supreme Court decision and concluded that the duty burden was passed on to consumers due to the clear evidence on record.

Interpretation of Invoices and Pricing Strategy:
The Tribunal noted that the invoices clearly showed the education cess payable and the basic value inclusive of excise duties. The appellant's argument that maintaining the same prices indicated no burden passed on was rejected. The Tribunal agreed with the Commissioner (Appeals) that the duty burden was passed on to consumers based on the pricing strategy and invoice details.

Applicability of Legal Precedent:
The Tribunal upheld the Commissioner (Appeals) decision based on the legal precedent set by a Supreme Court case. The Tribunal agreed that despite uniform pricing, the indication of education cess on invoices implied passing on the duty burden to consumers. The reliance on the legal precedent and the evidence on record supported the decision against the appellant.

Compliance with Statutory Limits for Appeal:
The disputed duty amount was below the limit prescribed under the Central Excise Act. The Tribunal considered this statutory limit and found no valid ground to interfere with the Commissioner (Appeals) order. Consequently, the appeal was rejected based on the compliance with the statutory limits for appeal and the lack of grounds for interference.