2016 (3) TMI 97 - AT - Central Excise

Refund claim - non collection of amount of duty from the buyer - whether once duty is shown in invoice, it is deemed to be passed on? - Held that - There is no dispute about the fact that the appellant have not collected the amount of duty from their buyer, which they are seeking as refund in the facts and circumstances. Accordingly, I hold that the appellant have discharged the presumption of unjust enrichment as required for the purpose of getting refund. The appellant have produced a copy of their Ledger account as well as certificate of C.A. and the same have not been disputed by the Revenue. Thus, hold that the learned Commissioner (Appeals) is in error in rejecting the refund, holding that once duty is shown in invoice, it is deemed to be passed on, as the presumption is rebuttable. Thus, the appeal is allowed. The assessee, is held, entitled to refund. - Decided in favour of assessee

Summary

Issues:
Refusal of refund claim by Commissioner of Central Excise (Appeals) based on the presumption of duty being passed on once shown in invoice.

Analysis:
The appellant, M/s. Larsen & Toubro Ltd., filed a refund claim for excess excise duty paid due to an error in the assessable value mentioned in the invoices. The appellant issued a credit note to the buyer, reversing the excess duty amount, and filed for a refund. The Assistant Commissioner rejected the claim citing Section 12B of the Central Excise Act, stating that once duty is shown in the invoice, it is deemed to be passed on. The Commissioner (Appeals) upheld the rejection, relying on Section 11B of the Act, which deals with refund claims.

The appellant argued that the burden of proof for passing on the duty is on the claimant and presented evidence to show that they had not passed on the duty to the buyer. They relied on a certificate from a Chartered Accountant confirming the excess duty paid and not received from the buyer. Additionally, they cited legal precedents, including the Madras High Court's ruling in Addison & Co. case, emphasizing that unjust enrichment should be prevented, but refund should be allowed if the burden of duty has not been passed on.

The Tribunal, after considering the arguments, held that the appellant had not collected the duty amount from the buyer and had provided sufficient evidence to rebut the presumption of passing on the duty. The Tribunal found the Commissioner (Appeals) erred in rejecting the refund claim solely based on the duty being shown in the invoice. The Tribunal allowed the appeal, declaring the appellant entitled to the refund and directed the authority to disburse the refund with interest within 45 days.

In conclusion, the judgment highlights the importance of proving non-passing on of duty to claim a refund, emphasizing the need to rebut the presumption of passing on. Legal precedents and statutory provisions were crucial in establishing the appellant's right to the refund, ultimately leading to a favorable decision by the Tribunal.