1997 (2) TMI 327 - AT - Central Excise

Summary

Issues:
Refund claim rejection based on passing on the burden of duty to customers.

Analysis:
The appellant, a manufacturer of Ice-cream, purchased duty-paid Soft Ice-cream for further processing. The Central Excise duty was paid again on the hardened Ice-cream, leading to a refund claim of excess duty paid. The claim was rejected by lower authorities citing passing on the duty burden to customers. The appellant argued that they had not passed on the duty burden as they used the Soft Ice-cream for captive consumption. They referred to High Court judgments supporting their stance. The Revenue contended that the Soft Ice-cream was purchased from outside and not captively consumed. The judge disagreed with the Revenue, stating that the appellant had indeed captively consumed the duty-paid Soft Ice-cream for making hardened Ice-cream, making the refund claim valid. The judge held that the concept of passing on the duty burden did not apply in this case, and the refund should have been allowed by the Assistant Commissioner.

The judge did not address the Revenue's argument regarding filing the Refund Application with the Assistant Commissioner, as the issue was not raised before the lower authority. Since the main issue was the passing on of duty burden, and the judge found that it did not apply in this case, the appeal was allowed, granting consequential reliefs to the appellants.