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TMI Blog2014 (6) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that principle of "unjust enrichment" is not applicable to the facts of the case because the respondent had filed an affidavit stating that burden of duty had not been passed on to its dealers/customers by maintaining uniformity of price ?" (C) Whether, on the facts and in the circumstances of the case, the Tribunal has substantially erred in law in ignoring the ratio laid down by the Supreme Court in CCE v. Allied Photographic India Ltd. 2004 (166) ELT 3, wherein it has been held that uniformity of price before and after assessment does not lead to an inevitable conclusion that duty has not been passed on to the buyers ?' 2. Briefly stated, the facts are as under :- 2.1 The respondent, a company registered under the Companies Act, is engaged in manufacture and sale of Pan-masala/Ghutka. They had been clearing such goods under heading 2106.00 by paying excise duty accordingly. The Central Excise authorities at Vadodara, however, disputed the said classification and vide communication dated 12th December 2000, directed the respondent to pay duty under the heading 2404.90. It is not disputed that under the said heading 2404.90, the basic excise duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ately and duty was charged accordingly, which inter alia makes well evident that the incident of duty paid as excise duty has been passed on to the customer and it is not refundable to the assessee. The concept of passing on of the incidence of duty squarely arise in this case as burden of duty paid on final products were directly passed on to the buyer which gives ample space for application of the bar of unjust enrichment. The relied upon case laws are also not relevant in the present case. This is a fact that the assessee recovered the Central Excise duties as mentioned in the invoices raised by the assessee from their respective customers and they have failed to produce the evidences that if the refund claim is to be sanctioned then it will not enrich them unjustly as required to be satisfied under section 11B of the Central Excise Act, 1944 under clause of unjust enrichment. For the above reasons, the refund claim requires to be credited to the Consumer Welfare Fund established under Section 12C of the Central Excise Act, 1944 even if considerable." 3. The assessee approached the Commissioner [Appeals] by filing Departmental appeal. Before the Appellate Commissioner, assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it margin or modification of cost structure. This does not establish that the burden of excess differential duty paid to the department was absorbed by them. The ratio of the case laws relied upon by the appellant is not applicable to the appellant's case. Since the facts of the case referred to in the aforesaid judgment/decision are different than the appellant's pertaining to the material period do not show composite price and the duty has been shown separately. In view of above, the amount of refund claim in respect of differential duty is hit by principle of unjust enrichment and has rightly been held so by the original authority." 4. Assessee carried the matter in further appeal before the Tribunal. The Tribunal by the impugned judgment allowed the appeal. Tribunal compared the invoices of the disputed period as well as the period immediately preceding such period and came to the conclusion that the price had remained exactly the same. The Tribunal referred to various decisions of the Apex Court; including in case of Mafatlal Industries Ltd. v. Union of India [1997] 5 SCC 536. The Tribunal also referred to a decision of the Supreme Court in case of Asstt. Collector of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8. The issues before us are not very complex. A short question is did the Tribunal commit an error in law in allowing assessee's refund claim holding that the principle of unjust enrichment would not apply ? In order to decide such question, we may recall that the principal objections of the Department were that the sale invoice indicate higher rate of duty which in turn would imply that the assessee charged such duty to its consumers. The second ground for rejecting the refund claim was that mere constant sale value of the goods would not establish non passing of the duty burden to the consumers. 9. In our opinion, both the objections are unsustainable. Admittedly, till January 2001, the assessee was paying excise duty at a lower rate. For the months of January and February 2001, the assessee was forced to clear the goods under heading 2404.90 at a higher rate. This was done under protest. The assessee also established that the sale price of the goods, despite this change in the duty rate that the assessee charged from the consumers, remained the same. This aspect has been gone into by the Tribunal at a considerable length. In the impugned judgment, the Tribunal compared t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01, the price of goods remained the same as was charged during the period immediately preceding the said months, despite the Department insisting on collecting higher rate of duties, the assessee had also filed affidavit of the responsible officer of the company that the burden of duty was not passed on to the consumers. It was also pointed out that the issue of higher rate of tax had cropped up only in Vadodara Commissionerate. The same was sorted out very shortly by the legislative changes. The assessee was confident that the objection of the Department was simply not sustainable and that the assessee would surely succeed. It was because of this that the duty was paid under protest but not collected from the consumers. Most significantly, as correctly pointed out by the learned counsel for the respondent, if such issue was peculiar only to Vadodara Commissionerate, the existing distributors of the assessee would not continue to lift the goods from the assessee if sold at a considerably higher price than available from other manufacturers or even other units of the assessee situated outside the jurisdiction of the Vadodara commissionerate. This was a strong indication that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in rate of Excise duty, he had to declare such clearance and rate of duty in the invoices failing which, there would be a mis-match between what the assessee was depositing with the Department by way of Excise duty and additional duties and what would be indicated in the invoices. If that be so, simply because the invoice of the period in question indicated excise duty at the rate of 16% would not in any manner mean that the assessee passed on such duty in its entirety to the consumer. Answer to this crucial question had to be found from other sources and evidence. 12.3 In view of over-whelming evidence on record suggesting that the assessee had not passed burden of additional duty to the consumers, the Tribunal correctly reversed the decision of the Central Excise authorities. 13. Before closing, two issues remain to be tackled. Firstly, counsel for the Revenue was correct in pointing out that the Tribunal in the impugned judgment has referred to a portion of the decision rendered by the Supreme Court in case of Mafatlal Industries Ltd. (supra), which was a minority view. Despite such inadvertent error on the part of the Tribunal, in our opinion in the ultimate analysis, the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bearing on the issue, the said authorities could not have rejected the refund claim. The assessee having discharged the burden of establishing the necessary requirement, if the Departmental authorities desired to examine the issue from any other angle or required additional material to satisfy whether the uniformity in the price structure is attributable solely to the assessee absorbing the additional burden of duty or on some other fortuitous circumstances independent of the question of the assessee absorbing such burden, the authority could and ought to have made further inquiries with the assessee. 15. In the result, Questions (A) & (B) are answered in the negative i.e., in favour of the respondent-assessee. Question (C) is answered in a manner that the decision of the Supreme Court in case of Allied Photographics India Ltd. (supra) does have application to the case on hand, in view of other additional facts and circumstances, the Tribunal committed no error in allowing the assessee's appeal. 16. Revenue's appeal is therefore dismissed. At this stage, learned counsel for the Revenue prayed that this judgment be stayed for a reasonable period with a view to file a furt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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