2000 (11) TMI 1176 - AT - Central Excise

Summary

Issues:
1. Refund claim of excess excise duty paid on LPG cylinders.
2. Dispute regarding passing on the incidence of duty to the buyer.
3. Interpretation of financial arrangement involving sale and lease of cylinders.
4. Applicability of legal precedents in determining assessable value and duty realization.

Analysis:

Issue 1: Refund claim of excess excise duty paid
The appellants manufactured LPG cylinders and filed a refund claim of Rs. 93,307.77 for excess duty paid. They initially cleared the cylinders at Rs. 650 per cylinder pending price list approval, which was later finalized at Rs. 547 per cylinder. The Asstt. Commissioner rejected the refund claim, citing that the duty incidence was passed on to the buyer at Rs. 650, not Rs. 547. The Commissioner (Appeals) upheld this decision, leading to the present appeal.

Issue 2: Passing on the incidence of duty
The key contention was whether the duty incidence was passed on to the buyer. The appellants argued that the cylinders were not meant for sale but for their own use, with a financial arrangement involving a sale and leaseback to a Finance Company. However, the Tribunal found that the excise duty element was indeed passed on to the buyer based on the sales invoice, refuting the appellants' claim.

Issue 3: Interpretation of financial arrangement
The Tribunal analyzed the nature of the financial arrangement where cylinders were sold to a Finance Company but retained by the appellants on lease. Despite physical possession not transferring, the money value, including excise duty, was received by the appellants from the Finance Company. This led to the conclusion that the duty incidence was indeed passed on to the buyer, rejecting the argument that it was not a typical sale transaction.

Issue 4: Applicability of legal precedents
The appellants relied on a previous case involving hire purchase transactions to support their argument. However, the Tribunal distinguished the present case, emphasizing that the excise duty realization from the buyer was evident from the sales invoice. The Tribunal also highlighted the importance of invoice details in determining duty passing, ultimately rejecting the appeal based on the clear evidence of duty realization.

In conclusion, the Tribunal dismissed the appeal, emphasizing that the excise duty element was passed on to the buyer as evidenced by the sales invoice, leading to the rejection of the refund claim for excess duty paid on the LPG cylinders.