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TMI Blog2005 (12) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... continued in relation to the manufactured products after the plant and machinery was put to use and therefore, in absence of any difference in the sale price at different points of time, a presumption should be raised that incidence of duty had not been passed on. The entire premise on which the submission is built is fallacious. In the first instance, it is the case of petitioner itself, that it had imported the plant in question so as to replace and upgrade its existing plant and machinery. This would indicate that the cost of user of the old plant and machinery was such that a particular sale price had to be fixed. As against that, when new plant and machinery are installed and put to use, the manufacturing cost is bound to come down, which would leave enough margin to the manufacturer to retain the sale price at the same level. This could be only one instance why the sale price has remained constant. There could be various other factors, and such factors are within the knowledge of the petitioner. The petitioner is, therefore, duty bound to place on record the relevant material in this regard and discharge the onus which has been cast on the person making a claim to establish t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;ble Court; [B] That Your Lordships may be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate writ, direction or order, directing the respondent Nos. 3 and 4 herein to forthwith pay to the petitioner company the amount of ₹ 41,48,176/-along with interest for the period of three months after 2nd January 2001 till the actual payment of the above amount at the rates that may be deemed fit by this Hon'ble Court; [C] Pending hearing and final disposal of the present petition, Your Lordships may be pleased to direct the respondent Nos. 3 and 4 herein to forthwith pay the amount of ₹ 41,48,176/ - to the petitioner company; [D] Pending hearing and final disposal of the present petition, Your Lordships may be pleased to direct the respondent Nos. 3 and 4 herein to forthwith pay interest at the rates specified under Section 27A of the Customs Act, 1962 during the aforesaid period; [E] An ex-parte ad-interim relief in terms of Paras 9 (C) and (D) above may kindly be granted; [F] That Your Lordships may be pleased to pass appropriate Orders thereby, dispensing with filing of certified copy of OIA No. 9/2004/9 (KDL)/Commr. (A)/Raj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 17,50,000 TOTAL AMOUNT PAID ₹ 1,97,14,176 Amount Excess Paid ₹ 41,48,176 5. The petitioner's refund claim was rejected by the Deputy Commissioner of Customs vide Order dated 17.8.2001. In relation to the amount of ₹ 17,50,000/-, the finding was that The question of sanctioning refund of that amount does not arise because the amount deposited in the High Court of Gujarat, Ahmedabad is not credited under the Customs Head. In respect of the balance claim of ₹ 23,98,178/-, the Deputy Commissioner held that, even if the said amount is sanctionable as refund due to the petitioner, the same is liable to be credited to Consumer Welfare Fund by invoking the principle of unjust enrichment as the petitioner had failed to establish that incidence of duty had not been passed to any other person. 6. The petitioner carried the matter in appeal. Vide Order dated 9.1.2004, the Commissioner (Appeals) held that (a) refund of ₹ 17,50,000/- is to be allowed subject to verification of records of Customs or the records of Gujarat High Court Registry to the effect that the said amount had been transferred under the Head of Customs duty; (b) the rejection of refund cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rle International Ltd. vs. Union of India, 2001 (127) ELT 329 (Gujarat) and Tata SSL Limited vs. Union of India, 2002 (140) ELT 338 (Gujarat), in support of the contention that the petitioner must also be held to be entitled to interest on the refund that may be held to be available to the petitioner. 10. Ms. Avni S. Mehta, the learned counsel appearing on behalf of the respondents relied on the orders of the Deputy Commissioner and the Commissioner (Appeals). She also submitted that necessary directions, in relation to the amount of ₹ 17,50,000/-, may be issued to the authorities for verification as to whether the amount had been credited under the Head of Customs duty or not, because she had no instructions on this count. 11. Insofar as the first amount is concerned, namely, ₹ 17,50,000/-, the case of the Department is limited to the aspect as to whether the same has been credited under the Head Customs duty or not. after the amount was received from the Registry of the High Court. Though in the order in original, at one stage, the adjudicating authority sought to place reliance on the entries made by the petitioner by showing the sum as outstanding deposit in its bal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of India on 18.12.1993. Thus, it is clear that the amount of ₹ 17,50,000/- deposited by the present petitioners in the above referred proceedings of Special C.A. No. 4462 of 1990 has been paid over to the respondents herein and this payment was made by the Registry in pursuance of the Order dated 10.8.1993 passed by this Hon'ble Court in the Civil Application filed by the Union of India. 14. In the aforesaid circumstances, the respondent Department cannot insist and expect the petitioner to show and establish that the amount received by the Additional Standing Counsel of the Department vide cheque issued in favour of the Union of India on 18.12.1993 has been credited under the appropriate head. The record is with the Department. It is for the Department to verify as to under which head it has credited the amount. The petitioner does not have access to the said record and cannot be expected to establish the entries made therein. 15. Even if, for the sake of argument, it could be presumed that the amount has not been credited in the proper head, the petitioner cannot be penalized for the same. The petitioner is not in charge of making the appropriate entries, nor is in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of refund was restricted to the amount which was actually paid with a prayer to release the bank guarantee deposited with the excise authorities. The High Court of Punjab and Haryana issued a direction to dispose of the claim within one month with further direction to the assessee concerned to have the bank guarantee extended till final disposal of the claim of refund. Against the aforesaid direction, the assessee approached the Apex Court and succeeded vide Order dated 26.11.1993. The Excise Department sought review of the same and in review proceedings, the Apex Court took note of the fact that the encashment of bank guarantee on 17th November, 1993 was not warranted in any manner whatsoever in absence of any valid order in favour of the Department and hence, the Apex Court directed the excise authorities to repay the amount so collected by encashment of bank guarantee. The Apex Court also noted that the direction issued by the High Court to extend the bank guarantee could not have been issued by the High Court as the only prayer before the High Court was seeking release of the bank guarantee already furnished. It is in aforesaid backdrop of facts and circumstances that the Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly succeeds, resulting in non-application of doctrine of unjust enrichment, does not merit acceptance. Once the bank guarantee has been invoked and encashed, the amount partakes the character of duty paid and thereafter, even when an assessee succeeds ultimately, the claim of refund will be for refund of duty paid. The claimant has to comply with the conditions of the provisions pertaining to refund, namely, Section 11B of the Central Excise Act, 1944 and Section 27 of the Customs Act, 1962. 21. Alternative claim that in case of capital goods, there could be no requirement of establishing that the incidence of duty has been passed on also proceeds on an erroneous premise. In the first instance, the contention that the user of capital goods for the manufacture of final products cannot be equated with user of inputs is true only to a certain extent. However, when the issue is in relation to whether the duty paid on such capital goods and the duty paid on inputs is required to be refunded, the requirement of the provision, namely, that the incidence of such duty has not been passed on, cannot be read so as to mean it is applicable only to inputs and not to capital goods. It is not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Apex Court in the case of Union of India vs. Solar Pesticides Pvt. Ltd. (supra) does not lay down any contrary proposition. Merely because the Court was called upon to decide the controversy in case of raw material, it cannot be contended therefrom that the principle laid down therein would not be applicable in case of capital goods or plant and machinery. The Apex Court has explained the use of the words incidence of such duty in Section 27 (1) of the Customs Act as under: The use of the words incidence of such duty.... is significant. The words incidence of such duty mean the burden of duty. Section 27 (1) of the Act talks of the incidence of duty being passed on and not the duty as such being passed on to another person. To put it differently, the expression incidence of such duty in relation to its being passed on to another person would take it within its ambit not only the passing of the duty directly to another person but also cases where it is passed on indirectly. (emphasis supplied). 24. Therefore, all cases where the incidence of duty has been passed on indirectly have to be considered within the parameters of Section 27 (1) of the Customs Act. 25. During the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty paid on such crucibles. This Court is in respectful disagreement with the opinion expressed by the High Court of Madras for the reasons already stated hereinbefore. Suffice it to state that the cost of the said crucibles would always be taken into consideration while arriving at the cost of manufactured product, and as a consequence, the sale price. 27. There is one more aspect of the matter. It was submitted that due to various reasons, sale price may be fixed so that sale price might be less than the cost price, resulting in loss. The contention that merely because the sale price might be such that, due to market factors, an assessee may incur losses would not necessarily reflect that the incidence of duty has not been passed on. May be, in a given case, only a proportionate part may be passed on in such circumstance. Ultimately, it would be a question of fact and evidence will have to be led in this context. In the case of the petitioner, both the adjudicating authority and the appellate authority have come to the conclusion that the petitioner has not been able to establish that incidence of duty had not been passed on. This is a finding of fact and it is not possible for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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