2013 (7) TMI 278 - HC - Central Excise

Refund - SSI exemption was withdrawn and restored after some time - unjust enrichment - cum-duty-price - Assessee obtained a supply order for the supply of Carrier Breech Block Assembly. The assessee quoted the price of Rs.621/- per piece inclusive of Excise Duty - During Budget 2001, as the chapter 93.05 was taken out of SSI exemption purview, vide Notification No.8/2001 dated 01.03.2001 - Carrier and Breech Block Assembly falling under Chapter 93.05 was brought into Excise Net. It is not disputed by the Revenue that the exemption withdrawn was restored vide Notification No.47/01 dated 01.10.2001 by incorporating the said chapter under the SSI Exemption. Held that - The price Rs.621/- per piece is inclusive of excise duty, thus, there being no liability, there could be no passing of a liability to the customer - If the assessee had charged Rs.470.46 apart from what has been charged as duty and paid it, the question of refund has to be considered based on the facts as to whether the assessee had passed on the liability to the purchaser. If the amount had been paid by the assessee and not been passed on to the purchaser, then the question of rejection of refund does not arise. - The matter remanded back to the Assessing Officer for working out as to whether the claim can be considered for the period after 01.10.2001. Decided in favor of Revenue.

Summary

Issues:
1. Interpretation of price inclusive of excise duty in purchase order and invoices.
2. Entitlement for refund of excise duty due to exemption restoration.

Analysis:
1. The case involves the interpretation of the price stated as inclusive of excise duty in the purchase order and invoices. The appellant, a Small Scale Industry (SSI) unit, received a supply order for Carrier Breech Block Assembly. The appellant quoted a price of Rs.621 per piece inclusive of excise duty. The dispute arose when the exemption for the relevant chapter was withdrawn and later restored. The appellant filed a refund claim for duty paid, arguing that no duty liability was passed on to the buyer due to specific agreements with the purchaser. However, the Assessing Officer rejected the claim based on the interpretation that the price included excise duty, as shown in the purchase order and invoices.

2. The appellate authorities, including the CESTAT, considered the restoration of the exemption and the specific terms of the agreement between the appellant and the buyer. The CESTAT held that the appellant was entitled to a refund as there was no passing on of the duty liability to the buyer. The Revenue appealed, arguing that the price inclusive of duty indicated the intention to charge duty regardless of the exemption status. The High Court analyzed the facts and legal provisions, noting the importance of determining whether the duty liability was passed on to the purchaser.

3. The High Court observed that the exemption status at different time periods impacted the duty liability and refund eligibility. For the period before the exemption withdrawal, the duty liability was passed on due to the inclusive price. However, for the period after the exemption restoration, the duty liability passing on needed further examination. The Court emphasized the need for clarity on whether the duty amount was paid by the appellant and not transferred to the buyer to determine the refund eligibility accurately.

4. In conclusion, the High Court remanded the matter to the Assessing Officer for a detailed assessment of the refund claim considering the timeline of exemption changes and the duty passing on aspect. The Court directed the Assessing Authority to make a decision based on the facts and legal provisions. The Civil Miscellaneous Appeal was disposed of with no costs, highlighting the importance of a thorough evaluation of duty liability and refund entitlement in excise duty matters.