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2022 (1) TMI 906 - AT - Central ExciseRefund of CENVAT credit reversed - Commissioner (Appeals) disregarded the Charted Accountant s Certificates and observed that once amount is shown in the books of account as expenditure, the same is deemed to have been passed to the customers for which no refund can be granted to the appellant - HELD THAT - The facts covering the accounting rules are mis-represented by the parties during submissions, for which observations that unless the amount is shown as receivable and shown in the books of account as expenditure, the incidence of duty is said to have been passed on to the consumers/customers are accepted as the true rule of accounting procedure and those cannot be treated as ratio discindendi to be followed as judicial precedent and not even an obiter dictum in view of misrepresentation of facts and rules of accounting. It is not understood as to why such Chartered Accountant certificates, which is considered as a certificate of Statutory Auditor, had been thrown out by the Commissioner (Appeals) as unbelievable and not accepted as a piece of documentary evidence though it is in the footing of an Expert Opinion under Section 45 of the Indian Evidence Act so as to outweigh the perception that all expenditure of a company are recovered from the customers, in which event no loss making company would ever exist on earth, though he trusted the unconfirmed data of the internet available in different websites like Wikipedia.org, investopedia.com etc to analyse and elaborate the concept of tax incidence . Appeal allowed.
Issues:
Refusal to credit refund amount to appellant's account, unjust enrichment, acceptance of Chartered Accountant certificate as evidence. Analysis: 1. Refusal to Credit Refund Amount: The judgment revolves around the refusal to credit the refund amount to the appellant's account and instead crediting it to the consumer welfare fund under Section 11B of the Central Excise Act, 1944. The dispute arose when the refund sanctioning authority and the Commissioner of CGST (Appeals) rejected the appeal by the appellant. The background of the case involves CENVAT credit taken against the manufacture of bagasse and press mud during sugar manufacturing, which was reversed by the Department but later held admissible by the Commissioner (Appeals). Subsequently, a refund application was filed, leading to the current issue. 2. Unjust Enrichment: The appellant argued that the refusal to credit the amount was based on a misunderstanding by the refund sanctioning authority and the Commissioner (Appeals) regarding the Chartered Accountant's Certificates. The appellant contended that once an amount is shown in the books of account as expenditure, it does not necessarily mean that it has been passed on to customers. The appellant supported their case with various judgments and case laws highlighting the importance of the Chartered Accountant certificate as evidence and the concept of unjust enrichment. 3. Acceptance of Chartered Accountant Certificate: The appellant relied on several judgments and case laws to support their claim that the Chartered Accountant certificate should be considered a valid piece of evidence. They argued that the certificates provided clear evidence that the duty incidence was not passed on to customers and that the appellant had borne the burden themselves. The Commissioner (Appeals), however, disregarded these certificates, relying on other judicial decisions and accounting principles to support their decision. 4. Judicial Analysis: The Tribunal analyzed the facts and arguments presented by both parties. It noted discrepancies in the accounting rules presented by the parties and emphasized that the mere posting of an amount as expenditure in the books of account does not automatically pass on the burden to customers. The Tribunal referenced previous cases to highlight that there are various ways for a company to absorb costs without affecting product pricing, such as adjusting profit margins or overhead expenditures. 5. Final Decision: Ultimately, the Tribunal allowed the appeal and set aside the order of the Commissioner of Central Excise & GST (Appeals). The appellant was granted the refund of the reversible CENVAT credit amount, which had been credited to the consumer welfare fund. The respondent-department was directed to refund the amount along with applicable interest to the appellant within three months from the date of the order. This detailed analysis of the judgment highlights the key issues, arguments, and the final decision rendered by the Tribunal in the case.
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