1999 (12) TMI 159 - AT - Central Excise

Summary

Issues Involved:
- Whether the refund claim filed by the appellants has been rightly rejected or should have been accepted.

Detailed Analysis:

1. Refund Claim Rejection:
- The appellants filed a refund claim stating that the product, Glass Wool mats, was not dutiable and claimed exemption from Central Excise duty for a specific period.
- However, they were later directed to pay full duty for past clearances and future clearances were allowed only upon duty payment.
- The Assistant Collector rejected the refund claim, arguing that the duty burden was passed on to customers, making the appellants ineligible for a refund.
- The Commissioner (Appeals) upheld the Assistant Collector's decision.

2. Appellant's Argument:
- The appellants' counsel argued that the burden of duty was not passed on to customers as sales realization was significantly lower than the cost of production during panic sales.
- They presented two sets of price lists, Form I and Form II, where Form II was for contract supplies and sometimes required declaration of inclusive excise duty prices.
- Referring to a Chartered Accountant Certificate, they claimed that the cost of production was higher, indicating that duty burden was not transferred to customers.
- Citing a Supreme Court judgment (Mafatlal Industries case), they contended that the refund claim rejection was erroneous.

3. Revenue's Position:
- The Revenue argued that invoices showed composite prices during the relevant period, implying duty inclusion.
- Central Excise duty, being an indirect tax, is typically collected from customers by manufacturers.
- Gate passes issued indicated duty payment, suggesting that duty incidence was passed on to customers, especially for Part II price list items where duty inclusion was declared.

4. Tribunal's Decision:
- The Tribunal found merit in the appellants' argument that sales realization was below production cost during panic sales, indicating non-transfer of duty burden to customers.
- Noting that lower authorities did not adequately consider the evidence and Supreme Court judgment's relevance, the Tribunal remanded the case to the Assistant Commissioner for a comprehensive review.
- The Tribunal directed the Assistant Commissioner to examine all evidence, including the Supreme Court judgment referred to, and make a decision after providing the appellants with a personal hearing.
- Consequently, the appeal was allowed for remand, emphasizing the need for a thorough review and appropriate orders in line with the law.