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TMI Blog2004 (7) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... TO), unknowingly during the period 2-6-1998 to 30-9-1998, whereas the levy of service tax on GTO was exempted vide Notification No. 49/98-S.T., dated 2-6-1998. On adjudication, the lower adjudicating authority passed the impugned order-in-original against which the appellants preferred appeal to the Commissioner (Appeals), Central Excise, Allahabad who vide Order-in-Appeal No. 237-CE/APPL/2003, dated 28-4-2003 rejected the appeal. Feeling aggrieved with this order-in-appeal, the appellants preferred appeal to CESTAT who vide its Final Order No. A/940/04/NB(SM) remanded the matter for deciding the case afresh after affording an opportunity to the appellants. The Hon'ble CESTAT held that while rejecting the appeal, the order of the adjudicating authority whereby the sanctioned refund was ordered to be credited to the consumer welfare fund, was also set aside without any appeal having been filed by the Revenue. In the absence of appeal filed by the Revenue, the order is not sustainable. The Commissioner (Appeals) was supposed to decide the issue before him, i.e., whether unjust enrichment is applicable to the refund filed by the appellants. 3. In the case, personal hearing was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants) on the transportation charges must have been included in the value of final product manufactured by them and ultimately it must have been realised by the party from their ultimate customers. Nothing has been placed by the party on record to show that they have not included service tax paid by them in the value of their final product and ultimately relied by them from their customers." 6. The appellants on the other hand have contended as under :- (i) That the appellants was only a godown owner and not the manufacturer of cement at Allahabad. (ii) That the appellant charges freight on actuals from its customers depending upon the amount paid to the goods transport operators, such freight is a part of distribution expenses of the appellants and does not form part of the price charged to the customers. These charges are in fact post removal expenses. (iii) That under Act 265 of the Constitution of India, tax can be collected only by authority of law. Thus, service tax unknowingly paid after 1-6-1998, and illegally collected by the Revenue cannot be retained and must be refunded, simply because it was not legally due. (iv) That the transportation expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 30-9-1998. Section 11B of the Central Excise Act, 1944 was made applicable during the material period to the refund of service tax, vide Rules 7(4) of the Service Tax Rules, 1994. However sub-rules (3) and (4) of Rule 7 were omitted with effect from 16-7-2001 vide Notification No. 5/2001-S.T., dated 9-7-2001. The concept of economic justice demands that in the case of indirect taxes, Central Excise duties and Customs duties, the tax collected without authority of law shall not be refunded to the claimant, unless he alleges and establishes that he has not passed on the burden of duty to a third party and that he has himself has borne the burden of the said duty. In the case of Mafatlal Industries Ltd. v. Union of India - 1997 (89) E.L.T. 247 (S.C.) the Hon'ble Supreme Court has observed as under :- "Ordinarily, no manufacturer will sell his products at less than the cost price plus duty. He cannot survive in business if he does so. Only in case of distress sales, such a thing is understandable but distress sales are not a normal feature and cannot, therefore, constitute a basis for judging the validity or reasonableness of a provision. Similarly, no one will ordinarily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve that fact and if it is found that duty was not leviable on the transactions, he will get back the duty paid. Ordinarily speaking, no manufacturer would take the risk of not passing on the burden of duty. It would not be an exaggeration to say that whenever a manufacturer entertains a doubt, he would pass on the duty rather than not passing it on. It must be remembered that manufacturers as a class are knowledgeable persons and more often than not have the benefit of legal advice. And until about 1992, at any rate, Indian market was by and large a seller's market." 8. Respectfully following the judgment of the Hon'ble Supreme Court, it is observed that in the instant case the appellants are not the manufacturer, rather the manufacturer's Depot undisputedly the service tax collected without jurisdiction cannot be retained by the Department. To rebut the presumption as laid down under Sections 11B and 12B of the Act, the appellants have produced Central Excise invoices, bills raised to dealers, copies of general ledgers and Chartered Accountant (N.M. Raiji Company, New Delhi) to this effect. On perusal of the bills raised to the dealers/cement agency, it is observed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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