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TMI Blog2018 (10) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... while deciding on the refund claim. Therefore, the appellant is entitled to the benefit of exemption notification. Since the appellant is entitled to the full exemption under the notification they are required to reverse the CENVAT credit in terms of Rule 11 (3) of CCR, 2004 from the date on which they have started claiming the exemption notification. In other words, they are supposed to reverse the CENVAT credit of the inputs lying in stock and the inputs which have been gone into the goods lying in stock on that date. In this case, the date is 01.03.2007. The lower authority has erroneously shifted this date to 21.04.2007 without any legal basis. Unjust enrichment - Held that:- The appellant has entered into a composite contract which included supply of pipes as well as laying, commissioning, etc. The bill of materials as per the contract indicates the cost of the pipes plus the applicable excise duty and determines the amount payable for the pipes after deducting the duty element. The client has also given a Certificate to the effect that they have not reimbursed any excise duty to the appellant. Further, the CA’s Certificate produced by the appellant also indicated that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided by the first appellate authority vide Order-in- Appeal No. 06/2009 (H-III) CE dated 27.02.2009 in which he modified Orderin- Original passed by the Asst. Commissioner by holding that the cut off date for the purpose of reversal of CENVAT credit under Rule 11 (3) of CCR, 2004 should be 28.02.2007 only. Based on this Order-in-Appeal, the appellant submitted a letter to the Asst. Commissioner seeking refund of the differential amount. The department s appeal against the Order-in-Original was on the ground that the Asst. Commissioner has not correctly considered the question of unjust enrichment before deciding the matter and sanctioning the refund. This appeal was decided by the first appellate authority vide Order-in-Appeal No. 26/2009 dated 16.12.2009 directing the Asst. Commissioner to examine the matter on the question of unjust enrichment and decide. Against this Orderin- Appeal No.26/2009, assessee has filed an appeal ST/1017/2010. Meanwhile, the Asst. Commissioner had, in response to the letter submitted by the assessee seeking refund consequent upon the changing of the cut off date under Rule 11 (3) of CCR, 2004 by the first appellate authority vide Order-in- Appeal No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon ble Apex Court in the case of Solar Pesticides Ltd [2000 (116) ELT 401 (SC)] but the ratio of that judgment does not apply to their case. In the case of Solar Pesticides it was held that even if the duty paid on the raw materials used in the manufacture of final goods is taken into costing of price of final goods it would amount to passing the incidence of the duty within the meaning of Central Excise Act. (f) If the order of the first appellate authority is accepted it would lead to anomalous results as in every case where the balance sheet of the assessee shows the duty as an expense, the principle of unjust enrichment would apply whether or not the burden to that cost has been passed on to the customers. (g) The first appellate authority has traversed beyond the scope of the appeal filed by them and decided on matters extraneous to the issue to deny them the benefit of refund to which they are legally entitled. 3. Appeal No. ST/1017/2010 has challenged the Order-in-Appeal No. 26/2009 on the following grounds: i. Order-in-Appeal is bad in law, lacks jurisdiction and the first appellate authority should not have remanded the matter back to the original auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LA without any legal basis. This defect was rectified by the first appellate authority vide Order-in-Appeal No. 06/2009 dated 27.02.2009. Thus, on merits they are entitled to the benefit of the exemption notification and this is not in dispute. However, when they approached the Asst. Commissioner with a letter seeking refund of the differential amount in consequence of Order-in-Appeal No. 06/2009, he did not sanction the sum stating the claim to be premature on the grounds that another appeal ST/1017/2010 filed by them is pending with the CESTAT. Aggrieved by this rejection as premature they filed an appeal before the first appellate authority who vide Order-in-Appeal No. 112/2011 went beyond the scope of their appeal and held that the entire refund claim including what was already sanctioned and paid to them was hit by the grounds of unjust enrichment. Thus, in both these appeals the following three issues need to be decided. 1) Whether they are entitled to the benefit of the exemption notification. 2) If they are entitled to the benefit of notification, what is the cut off date to be taken for calculating the amount of CENVAT credit to be reversed? 3) Whether the ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment made is for ₹ 22,150/- as mentioned above and we have not reimbursed the ED component of pipe . He further produced before us a Certificate from M/s PRSP Associates, Chartered Accountants dated 24.05.2011 certifying that they are absorbing the excise duty as part of their cost in the books of accounts without the same being passed on to their customers. He, therefore, submits that they may be sanctioned refund of the excise duty which they are entitled to. 8. Learned departmental representative reiterates the arguments made in the Order-in-Appeal No. 112/2011 and asserts that as per the decision of the Hon ble Supreme Court in the case of Solar Pesticides Ltd (supra) the assessee is not entitled to the refund and the same has to be credited to the consumer welfare fund unless it is shown that they have not passed on the burden of the excise duty directly or indirectly to their customers. The Hon ble Supreme Court has held that for the unjust enrichment clause to be attracted not only can the cost be passed on directly but it can also be passed on indirectly. He, therefore, submits that both the appeals are liable to be rejected. 9. We have considered the argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 112/2011, the learned first appellate authority has relied on the judgment of the Hon ble Apex Court in the case of Solar Pesticides Ltd (supra) and held that unless it is proved that the appellant has not passed on the burden of the excise duty either directly or indirectly the amount should be credited to the consumer welfare fund and not given to the appellant. He, further, argues that in their books of accounts the excise duty element has been shown as a cost and therefore, he concludes that this cost must have been passed on to their client and indirectly recovered from them. However, as discussed above, in this case, the bill of materials in the contract shows that the amount to be paid per pipe includes only the basic cost of the pipe (not the excise duty) plus cost of laying the pipes, etc. This is further strengthened by the CA s Certificate produced by the appellant. In view of the above, we find that the appellant has not passed on the burden of the excise duty either directly or indirectly to their clients and satisfies the requirement to claim refund without being hit by the clause of unjust enrichment in terms of the law laid down by the Apex Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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