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TMI Blog1985 (11) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... red by sub-rule (i) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts Furnace Oil, falling under Item No. 10 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) and intended for use, otherwise than as feedstock in the manufacture of fertilizers, from so much of the duty of excise as is in excess of forty rupees per kilolitre : Provided that- (i) it is proved to the satisfaction of the Assistant Collector of Central Excise that such furnace oil is so used, and (ii) the procedure set out in Chapter X of the Central Excise Rules, 1944 is followed." 3. The appellants purchased furnace oil from the refinery of the Indian Oil Corporation, during the period 10-6-1976 to 9-10-1979. The excise duty at the normal rate was paid by the manufacturers, namely I.O.C. It is not in dispute that the procedure in Chapter X of the Central Excise Rules was not followed. (The appellants have, however, argued that this should not stand in the way of their refund claims being entertained). The following dates are relevant:- 10-6-1976--Notification No. 195/76 issued. 11-2-1977--Application made by the appellants to the Excise authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicants, who were the buyers of the excisable goods from the manufacturers, namely I.O.C., had no locus standi to claim refund of the duty which had been paid by I.O.C. and that accordingly the present appeal was not maintainable. Shri Sil, the learned Advocate for the appellants, thereupon sought time to study the point. Accordingly, the matter was adjourned, and ultimately came up again on 20-11-1985. 9. We first heard Shri Sundar Rajan (now appearing for the Department) on the preliminary objection. He submitted that in this case the claim was for refund of duty paid by I.O.C. It was only the person who paid the duty had the locus standi to claim the refund thereof. Indian Oil Corporation had not made any claim in the matter. Whatever might have been the arrangements between the I.O.C. and the appellants, the latter were not entitled to claim refund of duty from the Department, and therefore they had no locus standi to make a claim or an appeal. 10. In support of his contention Shri Sundar Rajan relied on the following decisions :- (1) 1977 E.L.T. 157 (Gauhati)-Union of India v. Silchar Electric Supply Company Ltd. ; (2) 1977 E.L.T. (J 65) (Cal.)=1977 TLR 1763 (Calcutt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in the case of Mahindra and Mahindra, Shri Sil submitted that he had not an opportunity to study that order, but in any event his case should succeed on the basis of the judgments on which he had relied. 14. In reply, Shri Sundar Rajan submitted that the judgments cited by Shri Sil had reference to the question of unjust enrichment and had no relevance to the present case. He again submitted that the appeal should be dismissed as not maintainable. 15. At this stage the hearing was closed, on the understanding that if the Bench ruled against Shri Sundar Rajan on his preliminary objection, a further hearing would be held on the merits of the appeal. 16. We had given our careful consideration to the submissions made from both sides. As regards the substantive question involved, namely the applicability of the exemption under Notification No. 195/76, we do not propose to comment in detail, since we are concerned with the preliminary issue of locus stand. We merely note the observations of the lower authorities that the condition of that notification, namely following Chapter X procedure, had not been fulfilled, and the contention of the appellants that this wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 36, Central Excises and Salt Act as in force at the material time. The Tribunal made the following observations :- "As M/s. Mahindra and Mahindra Ltd. are only the purchasers of the metal name plates and not being the manufacturers of the said metal name plates and as the excise duty is leviable only on the manufacturer or the producer, the aggrieved person would only be M/s. Excel Process Pvt. Ltd. As has been stated by the advocate of M/s. Mahindra and Mahindra Ltd. excise duty being an indirect tax, the ultimate burden would be on the consumer but that does not mean that every consumer of the goods in issue can be treated as an aggrieved person for filing his claim either before the Central Excise authorities or the Government or, as the case may be, the Tribunal." In this view the Tribunal dismissed the appeal, holding that M/s. Mahindra and Mahindra Ltd. had no locus standi to file a revision application or appeal. 20. The decisions cited above by Shri Sundar Rajan, particularly the two High Court judgments, are very relevant to the matter before us. As against those judgments Shri Sil sought to rely on two other High Court judgments which, according to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is the right of the manufacturer to claim the refund. Answer to the above contention is in the decision of the Supreme Court in M/s. Chotabhai v. Union of India, AIR 1962 S.C. 1006. The Supreme Court observed therein that Section 64A of the Sale of Goods Act refers in express terms to "duties of excise" and has, therefore, to be read as part and parcel of every legislation imposing a duty of excise. Therefore, the provisions of Section 11B of the Excise Act will have to be read subject to the provisions contained in Section 64A of the Sale of Goods Act. If the provisions of Section 11B are so read, it is clear that it would be the ultimate buyer who would be entitled to remission or refund of the excise duty paid on blended yarn." 21. In the case of Godavari Plywoods a similar view was taken by the Andhra Pradesh High Court as would be seen from the following observations in paragraph 18 of the judgment :- "18A. Incidence of Excise duty : A duty of excise is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced as held by Lord Simond in Governor General in Council v. Province of Madras--A.I.R. 1945 P.C. 98. It is an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven more clearly apparent if the terms of those very judgments are closely studied. The observations made in those cases was to the effect that relief, if any, was deserved by the persons who actually bore the incidence of the duty, namely the ultimate consumers. In that view the present appellants are completely out of Court because in no sense can they be considered to be the ultimate consumers of the furnace oil purchased by them. They are a corporation functioning on commercial lines, manufacturing a product for sale to consumers at a price. Whatever are the elements of the cost which go into their products, including the excise duty paid by them, necessarily have to be reflected in the price at which they sell their products to the ultimate consumers who buy the fertilizers from them. It is those ultimate consumers, namely farmers, etc. who have in the last analysis borne the burden of the duty and would in equity be entitled to receive the ultimate benefit of any remission or refund. When it comes to enjoying the benefit of a duty reduction, the present appellants are in the position of an intermediary and cannot seek to benefit from the observations of the Hon'ble Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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