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2021 (4) TMI 35 - HC - Central ExciseRefund of Additional duty of excise - rubberised textile fabrics - incidence of duty - rebuttal of presumption under Section 12B regarding the incidence of duty - reliable evidence of the incidence not having been passed on to the purchaser or any other person - Revenue had failed to rebut the evidence produced by the petitioner that the presumption enacted by Section 12B sufficiently stands rebutted - under Section 11BB of CEA - Relevant time is 3 months from the date of filing the refund application (i.e. 21.07.1990) till the date of payment. HELD THAT - The closest decision to the facts of the case on hand is the decision in M/S. CHENNAI PETROLEUM CORPORATION LTD., MANALI, CHENNAI VERSUS COMMISSIONER OF GST CENTRAL EXCISE 2020 (11) TMI 352 - MADRAS HIGH COURT wherein the appellant assessee raised an invoice for supply of Raw Naptha which is a dutiable product and the invoice was raised by the said appellant assessee on its marketing company M/s.IOCL who in turn raised invoice on the purchaser, M/s.PPN who in turn manufactured power by use of Raw Naptha and other raw materials. It was held that if at all duty can be said to have been collected in excess on account of over valuation of the supplies, it is the consumer of the said raw materials/Raw Naptha, namely, M/s.PPN who could have been claimed refund of excise duty as per settled legal position and merely because M/s.IOCL issued credit note to the buyer, namely, M/s.PPN, it cannot be said that the incidence of excise duty was not passed on to the purchaser, M/s.PPN. It was further held that once the incidence of excise duty has been passed on, whether it further passed on to the ultimate buyer or consumer or not is not a relevant question and the appellant assessee therein cannot be said to have borne any incidence of excise duty illegally levied and therefore they have no right to claim any refund. Admittedly the assessee at the time of issuance of invoices/gate passes have collected the additional duty of excise from its customers/buyers. Much after that they filed a refund claim and produced the copies of credit notes stating that the duty collected from the buyers had been refunded to the assessee and hence they are entitled for claiming refund under Section 11B of the Act. Thus, it is not disputed by the assessee that the amount of duty of excise had been passed on to its customers - the word buyer in clause (e) to proviso to Section 11B(2) of the Act cannot be restricted to the first buyer from the manufacturer. The basis for the claim of refund was on account of the fact that on or after 31.05.1990 the rate of duty was NIL. For the period between 31.05.1990 and 06.07.1990 the assessee paid additional duty of excise and had passed on the incidence of duty to its customers at the time of issue invoices/gate passes. Therefore, the subsequent issuance of credit note is of little avail as the incidence for the excise duty is deemed to have been passed on by the assessee to its buyer and therefore not entitled for filing an application for refund under Section 11B of the Act merely because they subsequently came to know that the rate of duty was NIL and credit notes are said to have been issued to the buyer. The Tribunal was right in affirming the order passed by the First Appellate Authority who confirmed the order passed by the adjudicating authority - Petition dismissed.
Issues Involved:
1. Determination of the factual position regarding the person who bore the incidence of duty. 2. Consideration of the evidence and findings by the Original Authority and the First Appellate Authority. 3. Rebuttability of the presumption under Section 12B regarding the incidence of duty. 4. Reliability of the evidence provided by the petitioner regarding the incidence of duty not being passed on. 5. Revenue's failure to rebut the evidence produced by the petitioner. 6. Entitlement to interest under Section 11BB from the date of filing the refund application. Issue-wise Detailed Analysis: I. Determination of the Factual Position Regarding the Person Who Bore the Incidence of Duty: The Tribunal did not determine the factual position as to who bore the incidence of duty. The petitioner argued that they had refunded the excise duty to their customers via credit notes, thus bearing the duty themselves. However, the Tribunal relied on the larger bench decision in S.Kumar's Ltd vs. CCE, Indore, which held that provisions of unjust enrichment apply even if the collected amount of excise duty was refunded to the buyer subsequently. II. Consideration of the Evidence and Findings by the Original Authority and the First Appellate Authority: The Original Authority and the First Appellate Authority did not accept the petitioner's claim that they bore the incidence of duty. The authorities held that the petitioner had collected the duty from customers at the time of clearance and that the subsequent issuance of credit notes did not alter this position. The Tribunal affirmed this view, referencing the decision in CCE vs. Addison Company, which held that refunds are not admissible if credit notes are issued post-clearance. III. Rebuttability of the Presumption Under Section 12B Regarding the Incidence of Duty: The presumption under Section 12B that the incidence of duty has been passed on is rebuttable. The petitioner argued that they had provided sufficient evidence to rebut this presumption. However, the Tribunal and the authorities did not find this evidence convincing, as the duty was initially passed on to the customers. IV. Reliability of the Evidence Provided by the Petitioner Regarding the Incidence of Duty Not Being Passed On: The petitioner provided credit notes and other documents to show that they had refunded the duty to their customers. However, the authorities and the Tribunal did not find this evidence sufficient to establish that the incidence of duty was not passed on. The issuance of credit notes after the clearance of goods was not considered adequate to negate the initial passing on of the duty. V. Revenue's Failure to Rebut the Evidence Produced by the Petitioner: The petitioner argued that the Revenue did not rebut the evidence they produced. However, the authorities and the Tribunal held that the initial passing on of the duty to the customers was sufficient to deny the refund, and the subsequent issuance of credit notes did not change this fact. VI. Entitlement to Interest Under Section 11BB: The petitioner claimed interest under Section 11BB from three months after the date of filing the refund application. However, since the refund claim itself was denied, the question of interest did not arise. Conclusion: The Tribunal and the authorities consistently held that the petitioner was not entitled to the refund as the incidence of duty had been passed on to the customers at the time of clearance. The subsequent issuance of credit notes was not sufficient to establish that the petitioner bore the duty. The writ petition was dismissed, and the substantial questions of law were answered against the petitioner.
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