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2024 (6) TMI 1008 - HC - Central ExciseIssues Involved: 1. Applicability of excise duty on packing material (M.S. Drums). 2. Refund of excise duty paid under protest. 3. Rebuttal of presumption under section 12B of the Central Excise Act, 1944. 4. Crediting refund to Consumer Welfare Fund vs. refund to the appellant. Summary: Issue 1: Applicability of Excise Duty on Packing Material (M.S. Drums) The appellant, engaged in manufacturing PU Foam products, contested the requirement to pay excise duty on the sale of M.S. Drums, arguing that these were not purchased as inputs. Despite several show-cause notices from the Central Excise Department, the appellant paid excise duty under protest from 20/5/2000 to 13/9/2002. The appellant referenced a Supreme Court judgment in West Coast Industrial Gasses Ltd. v. CCE and a CBEC circular dated 6/6/2003, which clarified that excise duty was not applicable on containers/waste packages. Issue 2: Refund of Excise Duty Paid Under Protest On 3/4/2002, the appellant sought a refund of Rs. 4,45,825/- for excise duty paid on M.S. Drums from 2000 to 2004. The Dy. Commissioner adjudicated in favor of the appellant but directed the refund amount to be credited to the Consumer Welfare Fund instead of the appellant's account. Appeals to the Commissioner (Appeals), Customs & Central Excise, Gwalior, and the Customs, Excise and Service Tax Appellate Tribunal, New Delhi, were dismissed, affirming the Dy. Commissioner's order. Issue 3: Rebuttal of Presumption u/s 12B of the Central Excise Act, 1944 The core issue was whether the appellant successfully rebutted the presumption that the incidence of duty was not passed on to the buyer as per section 12B. The adjudicating Authority, Commissioner (Appeals), and Tribunal found that the appellant failed to prove that the excise duty was not passed on to M/s Archana Industries. Despite certificates from M/s Archana Industries and the appellant's Chartered Accountant, the authorities held that the appellant did not discharge the burden of proof, as invoices showed excise duty was charged and collected. Issue 4: Crediting Refund to Consumer Welfare Fund vs. Refund to the Appellant The authorities concluded that the refund amount should be credited to the Consumer Welfare Fund to prevent "unjust enrichment" of the appellant. The court upheld this decision, referencing section 11B of the Central Excise Act, which mandates that refunds should be credited to the Consumer Welfare Fund unless the claimant proves that the duty incidence was not passed on to any other person. The court cited relevant judgments, including Commissioner of Central Excise, Madras Vs. Addison and Company Ltd. and Commissioner of Central Excise Vs. M/s Allied Photographics India Ltd., to support its conclusion. Conclusion: The court dismissed the appeal, affirming that the appellant failed to prove that the incidence of excise duty was not passed on to the buyer. The refund amount was rightly directed to be credited to the Consumer Welfare Fund to avoid unjust enrichment of the appellant. The question of law was answered against the appellant.
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