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TMI Blog2021 (4) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ce was raised by the said appellant assessee on its marketing company M/s.IOCL who in turn raised invoice on the purchaser, M/s.PPN who in turn manufactured power by use of Raw Naptha and other raw materials. It was held that if at all duty can be said to have been collected in excess on account of over valuation of the supplies, it is the consumer of the said raw materials/Raw Naptha, namely, M/s.PPN who could have been claimed refund of excise duty as per settled legal position and merely because M/s.IOCL issued credit note to the buyer, namely, M/s.PPN, it cannot be said that the incidence of excise duty was not passed on to the purchaser, M/s.PPN. It was further held that once the incidence of excise duty has been passed on, whether it further passed on to the ultimate buyer or consumer or not is not a relevant question and the appellant assessee therein cannot be said to have borne any incidence of excise duty illegally levied and therefore they have no right to claim any refund. Admittedly the assessee at the time of issuance of invoices/gate passes have collected the additional duty of excise from its customers/buyers. Much after that they filed a refund claim and produced t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re paying additional duty of excise at the rate of 10% advalorem on the rubberised textile fabrics upto 06.07.1990. As per the Finance Act which came into effect on 31.05.1990, the petitioner was eligible to claim NIL rate of additional duty of excise on the said product. Hence, on 21.07.1990 they filed a refund claim for the additional duty of excise paid by them on rubberised textile fabrics during the period from 31.05.1990 to 06.07.1990. Subsequently, the petitioner had raised credit notes to its customers who have received the goods, for the amount of additional duty of excise collected from them during the period for which refund was claimed by the petitioner. The original authority, namely, the second respondent herein issued a show cause notice to the petitioner calling upon them to state as to why the refund claimed by them should not be credited to the Consumer Welfare Fund in terms of Section 11B(2) r/w. Section 12C of the Central Excise and Salt Act, 1944 [hereinafter referred to as the Act ]. The second respondent proposed that since the incidence of duty had been passed on to the buyers by the petitioner on the date of clearance of goods, the petitioner ceases to be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence, there was no justification for denying the refund. The assessee referred to the correspondences exchanged in this regard to establish that they had actually suffered the duty and the credit note had been issued prior to the date of payment to the customers who enjoyed 90 days credit from the date of issue of invoice/gate pass. The First Appellate Authority rejected the appeal by order dated 09.10.1997 and while doing so referred to the decision of the Madras Bench of CEGAT in the case of CCE vs. Addison Company [1997 (93) ELT 429] , wherein it was held that refund is not admissible if credit notes have been issued not at the time of clearance of the goods but subsequently. 2.4.Aggrieved by such order, the petitioner preferred appeal to the Tribunal reiterating the grounds which were raised before the Commissioner and it is submitted that it is the petitioner/assessee who has actually suffered the duty liability by refunding the excise duty collected from the customers and the Department cannot close their eyes to this fact and cannot do away with reality and the assessee was entitled for the refund. Further it was contended that the claim for refund cannot be rejected e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner that the presumption enacted by Section 12B sufficiently stands rebutted? VI.Whether the Petitioner is entitled to interest under Section 11BB, 3 months from the date of filing the refund application (i.e. 21.07.1990) till the date of payment? 4.We have elaborately heard M/s.L.Maithili, learned counsel appearing for the petitioner/assessee and Mr.A.P.Srinivas, learned Senior Standing Counsel appearing for the revenue. 5.The facts which we have set out in the preceding paragraphs are not in dispute. The assessee's case largely rests upon the decision of the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Madras vs. Addison Co. Ltd. [2016 (339) ELT 177(SC)] . The learned counsel for the petitioner referred to paragraph 2 of the judgment to show to us that the judgment dealt with an appeal arising out of a judgment of this Court in 2001 (129) ELT 44 (Mad.) and appeal against the judgment of the Bombay High Court in Central Excise Appeal No.100 of 2008 and other decisions of the other High Courts as well. Paragraph 8 of the judgment was referred to show as to what was the questions referred to the larger bench for decision. The learned counsel refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of issuance of the credit notes it is the assessee who has borne the burden of the duty and it has not been passed on and the refund claim is tenable. Reliance was placed on the decision of the Division Bench in the case of TVS Electronics Ltd. vs. Assistant Commissioner of Central Excise, Chennai [2017 (348) ELT 630 (Mad)] , wherein the Division Bench following the decision in Addison Company Limited remanded the matter to the Assessing Officer to examine the issue of unjust enrichment. Reliance was also placed on the decision in the case of Commissioner of Central Excise, Pune-II vs. Daimler Chrysler India Pvt. Ltd. [2016 (342) ELT 28 (Bom)] . 8.Mr.A.P.Srinivas, learned Senior Standing Counsel submitted that the judgment in Addison and Company Ltd would have no application to the assessee's case and identical issue as in the case on hand was decided by the Division Bench of this Court in favour of the Revenue in the case of Chennai Petroleum Corporation Limited vs. Commissioner of GST and Central Excise, Chennai North [2021 (375) ELT 129(Mad)] . Further, it is submitted that it is an admitted case that the duty had been passed on and the plea raised by the assessee th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn would be entitled to refund only if he has not passed on the incidence of duty to any other person. Further the Tribunal held that the event which gives rise to cause of action for refund is payment of duty made in respect of goods cleared from the factory and once the duty burden had been passed on to the buyer at the time of clearance, issuance of credit note at a later point of time would not entitle the assessee to claim any refund. The Tribunal also held that burden of duty is normally passed by the manufacturer to the dealer and to the ultimate consumer. 11.The said assessee filed an application for reference to this Court, Madras and one of the questions was whether the Tribunal after finding the duty element on the discount to its dealers, the applicant had satisfied the requirements of proviso (d) to section 11B(2) of the Act was entitled to be paid the amount claimed as refund. The second question being whether the Tribunal after finding that the burden of duty was passed on by the applicant to its various dealers by issue of credit notes was right in concluding that the ingredients of Section 11B were not satisfied. This Court by judgment dated 23.11.2000 [2001 (29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed post clearance will not be taken into account for the purpose of refund by the Department. This submission was not accepted by the Hon'ble Supreme Court by referring to the decision in Union of India vs. Bombay Tyre International Private Limited [1984 (17) ELT 329 (SC)] , wherein it was held that trade discounts shall not be allowed only because they are not payable at the time of each invoice or deducted from the invoice price. Thus it was held that the assessee is entitled for filing a claim for refund on the basis of the credit notes raised by him towards trade discounts. Thus the issue in Addison and Co. Limited was as to whether the claim for refund on the basis of credit notes raised by the assessee towards trade discounts was admissible or not. The factual position was entirely different to that of the case on hand. The Hon'ble Supreme Court then proceeded to consider the case of the assessee therein who had admitted that the incidence of duty was originally passed on to the buyer and there is no material on record to show that the buyer to whom the incidence of duty was passed on by the assessee did not pass it on to any other person and that there is a statutor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turer. The buyer mentioned in the above Clause can be a buyer downstream as well. While dealing with the absence of a provision for refund to the consumer in the rules this Court in Mafatlal Industries Vs. Union of India (supra) held as follows:- 98.A major attack is mounted by the learned counsel for petitioners- appellants on Section 11-B and its allied provisions on the ground that real purpose behind them was not to benefit the consumers by refusing refund to manufacturers (on the ground of passing on the burden) but only to enable the Government to retain the illegally collected taxes. It is suggested that the creation of the Consumer Welfare Fund is a mere pretence and not an honest exercise. By reading the Rules framed under Section 12-D, it is pointed out, even a consumer, who has really borne the burden of tax and is in a position to establish that fact, is yet not entitled to apply for refund of the duty since the Rules do not provide for such a situation. The Rules contemplate only grants being made to Consumer Welfare Societies. Even in the matter of making grants, it is submitted, the Rules are so framed as to make it highly difficult for any consumer organisation to g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut, this is perhaps for the reason that clause (e) of the proviso to sub-section (2) of Section 11-B does provide for the purchaser of goods applying for and obtaining the refund where he can satisfy that the burden of the duty has been borne by him alone. Such a person can apply within six months of his purchase as provided in clause (e) of Explanation B appended to Section 11-B. It is, therefore, not correct to contend that the impugned provisions do not provide for refunding the tax collected contrary to law to the person really entitled thereto. A practical difficulty is pointed out in this behalf by the learned counsel for appellants-petitioners: It is pointed out that the manufacturer would have paid the duty at the place of removal or clearance of the said goods but the sale may have taken place elsewhere; if the purchaser wants to apply for refund - it is submitted - he has to go to the place where the duty has been paid by the manufacturer and apply there. It is also pointed out that purchasers may be spread all over India and it is not convenient or practicable for all of them to go to the place of removal of goods and apply for refund. True it is that there is this pract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was entirely different. Similarly, the case in TVS Electronics Limited also pertain to the discounts offered by the assessee which is passed on to the distributors [buyers] by virtue of post sales credit notes. The Division Bench by referring to paragraph 14 of the judgment in Addison Co. Ltd. , wherein it was held that the assessee is entitled for filing a claim for refund on the basis of credit notes raised by them towards discounts, remanded the matter to decide the aspect of unjust enrichment. On facts, the said decision cannot be applied to the assessee's case. 16.In Daimler Chrysler India Pvt. Ltd. , the Court found that apart from noting the decisions of this Court and the High Court of Andhra Pradesh remanded the matter to verify the documents. We find in the said decision that the appeal was restored to the file of the Tribunal for examining the issues highlighted in the judgment, one of which was whether the dealer has been found to be recovering the amounts or having given credit to the buyer, then whether raising of credit notes would negate the presumption raised in Section 12B of the Act or not. It was made clear that the Court was not expressing any opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d only to a person who has paid the duty and not to anyone else and if the ultimate consumer cannot be identified, the amount would be retained in the fund. This is more so because the word buyer in clause (e) to proviso to Section 11B(2) of the Act cannot be restricted to the first buyer from the manufacturer. The basis for the claim of refund was on account of the fact that on or after 31.05.1990 the rate of duty was NIL. For the period between 31.05.1990 and 06.07.1990 the assessee paid additional duty of excise and had passed on the incidence of duty to its customers at the time of issue invoices/gate passes. Therefore, the subsequent issuance of credit note is of little avail as the incidence for the excise duty is deemed to have been passed on by the assessee to its buyer and therefore not entitled for filing an application for refund under Section 11B of the Act merely because they subsequently came to know that the rate of duty was NIL and credit notes are said to have been issued to the buyer. Thus, we find that the Tribunal was right in affirming the order passed by the First Appellate Authority who confirmed the order passed by the adjudicating authority. 19.In the resul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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