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TMI Blog2013 (10) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... incidence of duty has been fully passed on by the assesse to the customer, this was a rebuttable presumption and if the assesse produced evidence showing that by the issue of credit note to the customer subsequently or by charging lesser price in respect of subsequent clearances, the incidence of higher duty earlier charged had been neutralized, burden would then shifted to the Revenue to prove that the claim of the assesse was not correct and if the assesse’s claim was found to be correct, the refund claim would be admissible. - E/998-1001/2006 - A/1341-1344/2012-EX(BR)(PB) - Dated:- 29-11-2012 - Ajit Bharihoke and Shri Rakesh Kumar, JJ. Shri Udit Jain, Advocate, for the Appellant. Shri R.K. Verma, AR, for the Respondent. ORDER The fact leading to this appeal by the department are, in brief, as under :- 1.1 The respondents are engaged in the manufacture of explosives chargeable to Central Excise Duty. During the period of dispute they supplied explosive to Coal India Limited and its subsidiaries. The price of the explosives was on provisional base and accordingly the order for the provisional assessment has been issued by the Assistant Commissioner and the dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in the case of Universal Cylinder Limited has been dismissed by the Apex Court vide order reported in 2005 (179) E.L.T. A41. Against the above order of the Commissioner (Appeals), these four appeals have been filed. 2. Heard both the sides. 3. Sh. R.K. Verma, the learned departmental representative, assailed the impugned order by reiterating the grounds of appeal in the Revenue s appeal and pleaded that the order of the Commissioner (Appeals) is contrary to judgment of the Tribunal in the case of Sangam Processors (Bhilwara) Ltd. v. Collector of Central Excise, Jaipur, reported in 1994 (71) E.L.T. 989 (Tri.), wherein it was held that when at the time of clearances of goods, the incidence of duty had been passed on to the customers, refund u/s 11B will not be admissible even if the assessee has subsequently issue credit notes to the customers to neutralize the incidence of the duty earlier passed on, that this judgment of the Tribunal has been upheld by the Apex Court as civil appeal filed against the same had been dismissed vide order reported in 1999 (112) E.L.T. A115 (S.C.), that in view of the above judgment of Tribunal, as affirmed by the Apex Court and judgment of Larg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases the respondent had supplied explosives to Coal India Limited and its subsidiaries against the contracts at provisional prices and accordingly the duty has been paid on such provisional prices. There is no dispute that the assessment of duty was also on provisional basis. The refund claims have arisen subsequently, when the prices were finalized and in some cases the final prices were lower then the provisional price. However, there is no dispute at that stage, the respondent have issued credit notes the customers which, if acted upon, would have the effect of neutralizing the higher price along with higher duty charged earlier. The point of dispute is as to whether in view of subsequent issue of credit notes neutralising the higher price along with higher duty earlier charged, the respondent would be eligible for refund. The Department pleads that in view of the judgment of the Tribunal in the case of Sangam Processors (Bhilwara) Ltd., the civil appeal against which has been dismissed by the Apex Court, subsequent issue of credit notes would not make any difference and the respondent would still not be eligible for refund. 6. We find that on this issue Hon ble Rajasthan Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary credit was not given by the assessee. Obviously, if it is to be assumed, that though debit notes were issued by the customers, but, the assessee did not credited to them, then, obviously, the assessee would not be entitled to claim for any refund, while, herein positive case of the assessee is, that it also issued corresponding credit notes, which fact has also not been disputed any where, before the authorities below. 8. Therefore, the question required to be examined is, as to whether despite exchanges of debit notes and credit notes respectively, between the assessee and its immediate purchaser, the assessee is not entitled to claim refund, so as to find, that the Tribunal was wrong in allowing the refund. 9. On the face of the things itself, it is clear that once the goods are supplied, the property in the goods passes to the purchaser, and seller becomes entitled to the price, and once the debit note is issued by the purchaser, and corresponding credit note is issued by the seller, the price of the goods stand reduced to the extent of debit note and credit note, meaning thereby, that after issuance of debit note and credit note, the price of goods charged by the seller ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note or credit note, cannot have the effect of reversal of passing of the burden, as it is only a paper transaction, to get undue benefit by the assessee. 14. In our view, the stand cannot be accepted. Passing on the burden of excise duty to the next purchaser, cannot be left in the realm of presumption. In cases, where the assessee is able to show, that the burden is not passed on, or it has been reversed, the claim of refund cannot be denied. 15. It is then, contended by the learned counsel for the revenue, that mechanism of issuance of debit note and credit note, if countenanced, it will open flood gates for pilferage of revenue. Firstly, we do not agree with the preposition, that it can open flood gates, inasmuch as, where false, fictitious or shame Debit note and credit note are issued for adjustment, the revenue can very well lead evidence, or can lead evidence in rebuttal. Simply because the revenue fails, and is not able to rebut evidence, it cannot be assumed, that it will open flood gates for pilferage of the revenue. Difficulties may be on either side, but then, that cannot be considered as a ground for interpreting Sec. 12B, in the manner the revenue wants us to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee to the customer, this is a rebuttable presumption and if the assessee produces evidence showing that by the issue of credit note to the customer subsequently or by charging lesser price in respect of subsequent clearances, the incidence of higher duty earlier charged have been neutralized, burden would then shifted to the Revenue to prove that the claim of the assessee is not correct and if the assessee s claim is found to be correct, the refund claim would be admissible. In the impugned order the Commissioner (Appeals), while relying upon the Tribunal s judgments in the case of Bharat Box Factory Limited (supra) and Universal Cylinders Ltd. (supra), has not discussed the factual aspect as to whether the credit notes issued by the respondent were genuine and had been acted upon or not. If the credit notes are genuine and had been acted upon, resulting in neutralising the higher incidence of duty earlier passed on, the refund claim would no longer be hit by the principle of unjust enrichment. The impugned order is, therefore, set aside and the matter is remanded to the original adjudicating authority for de novo adjudication, keeping in view above mentioned observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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