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TMI Blog2010 (1) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... ted at the job workers end, filed two refund claims each; that the appellants were issued with SCNs (two SCNs each) with proposal to reject the refund claims on the following grounds - (A) that they have not filed refund claims under prescribed format along with evidences/documents so as to demonstrate that the incidence of duty has not been passed on to the customer; (B) that they neither produced Balance Sheet nor shown evidence that the duty payment shown in their Profit and Loss account or other heads certified by the Chartered Accountants; that on adjudication, all the refund claims were rejected holding that - (a) that the claimants have not filed the refund claims in prescribed format; (b) there appears to be no dispute regarding payment of central excise duty on the scrap irrespective of whether by principal manufacturer or by job workers; (c) that though duty on the scrap has been paid by the assessees under protest, they have not resorted to provisional assessment under Rule 7 of the Central Excise Rules for claiming refund of duty, if any; (d) that as per accounting standards (AS2 and AS10), excise duty paid on the finished goods or other goods is consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and when the refund is going to be sanctioned, they would be accounting it as income and credit to the profit and loss account and finally they will be revenue neutral and hence there will be no scope for unjust enrichment; (v) that the accounting standards never say that the refund receivable must be shown as current assets only and in fact, they mention that it has to be shown as expenses only until and unless accepted by the Government department and therefore, the contentions of the SCNs that the expenses contested required to be reflected in the accounts as per accounting standards approved by ICWAI are not supported by the accounting standards; (vi) that as per column 13 in form 3 CD, to be filed under Income Tax Act, only the refunds admitted by the concerned authorities are to be claimed as due and hence there is no need to show it as refund receivable in the current assets in the balance sheet; (vii) that the purpose of showing the refund receivable on current asset is to confirm of non-passing of duty incidence to the customers and in their case, non-passing of duty incidence to the customers was proved beyond doubt by debiting to profit and loss account and when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CA certificates and also copies of Accounting Standards (AS) for 4 and 5. Finally he has submitted that his clients have correctly followed accounting procedure adopting AS4 and AS5. He has further submitted that in case of the appellant viz. M/s. Rathod Industries, the duty discharged was shown as receivable under Current Assets in the Balance Sheet and not claimed as expenses and to support his above contention, he has agreed to submit a copy of Balance Sheet within a week s time. 3.3 The consultant who appeared on behalf of the appellants, as promised during the course of PH, submitted additional submissions vide letter dated 8-1-2010 wherein, inter alia, submitted copies of balance sheet for the year ending 31-3-2008 for both the appeals. 4. I have gone through the case records including record of PH and additional submissions dated 8-1-2010. The lone issue to be decided in both the appeals is that whether the refund claims filed by the appellants are hit by the principle of unjust enrichment. The Assistant Commissioner in his findings held that the appellants failed to produce the Balance Sheet, financial statements, Trial Balance etc. so as to prove that the duty incid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated at the job workers end is not the subject matter of the SCNs. But the Assistant Commissioner has dealt the above issue in two pages which amounts to travelling beyond the SCNs; that with regard to observation of filing refund claims in non-prescribed format, the appellant replied that the same were filed as per format available in the Manual, but no rebuttal was available which shows that Assistant Commissioner has simply copied the allegations of the SCNs; that the Assistant Commissioner has also held that as per the accounting standards viz. AS2 and AS10, excise duty paid on goods is considered as manufacturing expenses. But the SCNs do not even mention the above standards which also amounts to travelling the issue beyond the scope of the SCNs; that further it was also not disclosed as to how those standards are relevant in the issue on hand; that however, AS2 and AS10 are not relevant, in as much as the AS2 deals with valuation of inventories while AS10 deals with accounting for fixed assets; that the Assistant Commissioner has further held that the appellants by paying duty under protest surrendered their rights of the refund claims by debiting the amounts as an expenses t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty elements and other manufacturing costs are projected in advance and accordingly, the duty elements will form part of the final products which would be ultimately passed on to the customers on sale. But in the instant case, duty was paid, on the scraps generated at the job workers end much after the clearances of the final products. If the contention of the department is acceptable that the duty element has been passed on to the customers, there should be an evidence that during a particular period, the cost of the final products of the appellants or the job workers are relatively high since two duty elements i.e. one normal duty element and another duty element paid at the instance of the department would be forming part of the final products. But in the instant case, no such evidences are forthcoming. By demonstrating that the duty paid under protest was accounted in AS-5 standard as debit to profit or loss account and in case of getting back the refund, it would be shown as credit to the profit or loss account and finally accounting as revenue neutral, and by producing CA certificates, the appellants have discharged their burden. Now the turn is to discharge the burden by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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