2013 (4) TMI 129 - AT - Central Excise

Rejection of refund claim of SED (Notification No. 6/2000-C.E) - unjust enrichment - Special Excise Duty (SED) paid on tyres and tubes. - manufacture of MUV - Held that - As per Section 12B of the Central Excise Act the incidence of duty paid on the tyres and tubes (inputs) received by the assessee from SATL during the period of dispute shall be deemed to have been passed on to the buyers of the motor vehicles (final products) unless the contrary is proved by the assessee. The Hon ble Supreme Court has remanded the matter to this Tribunal 2011 (3) TMI 1362 - SUPREME COURT OF INDIA to examine the evidence adduced by the assessee and to ascertain whether such evidence is adequate to establish that the incidence of SED paid on the inputs had not been passed on to the buyers of the final products. In terms of the Supreme Court s remand order, we have stepped into the shoes of adjudicating authority and hence can call upon the assessee to adduce primary evidence to support their claim that the incidence of duty paid on tyres and tubes had not been passed on to the buyers of motor vehicles. It is pertinent to note that the Cost Accountant s certificates do not specify any records or books of account which were claimed to have been verified at his end. Even the certificate issued on 17-6-2002 is silent about specific records or other books of account. No records or books of account, nor any invoices, were produced by the assessee The appellant failed to rebut the presumption created in favour of the Revenue under Section 12B of the Act. Consequently, we hold that the incidence of SED paid on tyres and tubes which were used in the manufacture of motor vehicles by the assessee was passed on to the buyers of the motor vehicles. Consequently, the refund claim is barred by unjust enrichment. The impugned order is sustained and this appeal is dismissed.

Issues Involved:
1. Rejection of refund claim for Special Excise Duty (SED) paid on tyres and tubes.
2. Non-production of end-use certificate.
3. Absence of evidence of the incidence of duty not being passed on to any other person.
4. Compliance with Notification No. 6/2000-C.E. and Chapter X procedure.
5. Applicability of the principle of unjust enrichment under Section 12B of the Central Excise Act.

Detailed Analysis:

1. Rejection of Refund Claim for SED:
The assessee, engaged in manufacturing multi-utility passenger vehicles (MUVs), claimed a refund of Rs. 60,77,117/- for SED paid on tyres and tubes purchased from M/s. South Asia Tyres Ltd. (SATL) during the period from 1-3-2000 to 31-1-2001. The refund claim was rejected by the Deputy Commissioner on grounds of non-production of end-use certificate and failure to prove that the incidence of duty was not passed on to any other person.

2. Non-Production of End-Use Certificate:
The Deputy Commissioner issued a show-cause notice proposing rejection of the refund claim due to the non-production of an end-use certificate. The assessee contested this, but the Deputy Commissioner upheld the rejection on the basis that the Chapter X procedure was not followed and the end-use certificate was not provided.

3. Absence of Evidence of Incidence of Duty Not Being Passed On:
The assessee argued that the selling price of the motor vehicles remained the same before and after 1-3-2000, supported by a Cost Accountant's certificate. However, the Revenue contended that this was not conclusive evidence. The Tribunal initially accepted the Cost Accountant's certificate, but the High Court remanded the case for fresh consideration of all evidence, including the certificate.

4. Compliance with Notification No. 6/2000-C.E. and Chapter X Procedure:
Notification No. 6/2000-C.E. prescribed a 'nil' rate of duty for tyres and tubes used in the manufacture of motor vehicles, subject to compliance with the Chapter X procedure. The assessee applied for CT-2 certificates and registration under Rule 192, but these were issued late, preventing the assessee from availing the exemption during the disputed period.

5. Applicability of the Principle of Unjust Enrichment:
The principle of unjust enrichment under Section 12B of the Central Excise Act presumes that the incidence of duty has been passed on to the buyer unless proven otherwise. The High Court and Supreme Court directed the Tribunal to reassess the evidence, including the Cost Accountant's certificates, to determine if the incidence of duty was passed on.

Tribunal's Findings:
- The Tribunal noted that the assessee failed to provide primary evidence such as invoices and books of account to support the Cost Accountant's certificates.
- The certificates alone were deemed insufficient to rebut the presumption of passing on the duty incidence.
- The Tribunal concluded that the refund claim was barred by unjust enrichment as the assessee did not meet the burden of proof under Section 12B.

Conclusion:
The Tribunal dismissed the appeal, sustaining the rejection of the refund claim on the ground of unjust enrichment. The decision emphasized the need for primary evidence to support claims against the presumption of duty incidence being passed on to buyers.

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