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TMI Blog2023 (6) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... system and exempt from payment of duty. However revenue was of the view that the same were classified under heading 3917 and were liable to pay duty as the exemption claimed was not admissible to the appellant. Appellant were paying duty under protest on the intermediate goods which came into existence during the course of manufacture of sprinkler irrigation systems. The appellant challenged the demands made and tribunal vide its order reported in [2002 (139) ELT 184 (T-Mum)] decided the issue in the favor of appellant. The order of tribunal was upheld by the Hon'ble Apex Court dismissing the appeal filed by revenue by its order dated 08.07.2002. 2.2 Appellant filed the applications claiming the refund of duty paid by them in interregnum under protest. The issue of refund was agitated upto tribunal on the ground of unjust enrichment. CESTAT remanded the matter back vide Final Order No. A/833-846/11/EB/C-II dated August 24, 2011 for reconsideration of the issue of unjust enrichment after taking into account the cost accountant certificate submitted by the appellant. The relevant para of the tribunal decision are reproduced below: "6. After hearing both the sides, we find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of the refund claims filed by the appellant is that appellant has not been able to establish that they have not passed on the burden of duty claimed as refund on the consumer of goods, hence the refund is hit by the unjust enrichment. The relevant paras of the impugned order are reproduced below: "6. Before passing the OIO for rejection of the appellant's refund claims, a show cause notice was issued by the Assistant Commissioner of the Division recording comprehensive detailed background of the entire case and the reasons for which the refund claims were not perceived to be maintainable. The appellant has raised an objection with regard to the issue of the show cause notice and stated that by issuing the notice the adjudicating authority traveled beyond the directions given by Hon'ble CESTAT. However, the appellant has not elaborated any reason as to how the show cause notice issued by the adjudicating authority to them harmed their interests. Instead, it is apparent from the detailed show cause notice that a full picture of the background of the whole matter of their refund claims, the stages of various litigations relating to number of refund claims and disagreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EA, 1944, the onus of proving that there is no unjust enrichment lies on the applicant. But the claimant has not produced evidence which can show that they have not passed on duty burden to the buyer. ii) From the balance-sheet of the respective years 1994-95 to 1999-2000, it has been observed that the central excise duty paid by them has been charged to profit and loss account as an expense and some part of central excise duty as other income was credited in the balance sheet of 2003-04 only. iii) There was a net increase in the appellant's cost of production of HDPE and LDPE products by Rs.2/- per kg due to payment of duty by them after adjustment of modvat credit availed on inputs. The central excise duty so paid under protest was charged to profit and loss account as expenditure and thereby it became part of material cost for the two final products which was indirectly recovered from the buyers of the final product. There was also no reduction in the price of their final products inspite of substantial reduction in cost of main raw material during the period of dispute. 8.2 The appellant has contested the finding of the Assistant Commissioner as given in para 8.1 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not mention any duty element and to that extent the sample invoices submitted by the appellant are of no use to find whether the appellant passed on the duty burden to its customers or not. However, it can be easily found out from the accountal treatment given by the appellant to the amount of duty paid on the intermediate HDPE and LDPE products in their books of accounts. The appellant had only two options in the event of spending its amount towards payment of duty under protest on the intermediary goods. One was if they did not want to pass on the burden of duty element to the customers in the hope of getting refund from the department, they could account it as their capital / asset expenditure as they subsequently did in the profit and loss account of 2003-04 after getting a favourable OIA in 2002 for refund of duty. The second option was they would account for the amount of duty in their manufacturing revenue expenditure and recover from the end users in the form of sale price. It is evident from the records that they opted for the second option and accounted for the amount of duty paid under protest during the entire disputed period in the manufacturing expenditure in their p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the goods fixed by the Maharashtra Govt. remained the same throughout is also not found tenable in absence of any relevant circulars / orders/ notifications of the Maharashtra Government with regard to fixation of price of DIS and SIS and their parts relating to the disputed period i.e. 1994- 95 to 1999-2000. This point could be verified only if the Government's Circular etc, and the invoices of the relevant period were provided by the appellant. But the appellant has not produced any such circulars relating to the above period. The appellant has submitted the Maharashtra Government's Circular relating to the year 2011-12 and 2012-13 and even if it is presumed that the pattern of pricing of the DIS and SIS was the same during the relevant period, the claim of the appellant regarding unchanged price cannot be accepted as the above circulars only provide for maximum retail price of the listed goods and not the fixed price. In this kind of pricing system, the bar on the appellant was only not to sell the goods beyond the Maximum Retail Price (hereinafter called as 'MRP') but there was no bar to sell the goods below the MRP. The appellant was having full liberty to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not acceptable even otherwise. By considering all above facts and circumstances of the case I agree with the Assistant Commissioner's findings that the appellant has not discharged its onus by adducing any kind of evidence that they have not passed on the burden of their payment of central excise duty to the customers for which the refund claims were filed by them with the Assistant Commissioner, Division. 10. The appellant in this appeal has also alleged that Assistant Commissioner indulged in judicial indiscipline by not following the direction of Hon'ble CESTAT which was to decide the case afresh in the light of the decision of Hon'ble High Court of Madras in the case of CCE, Coimbatore Vs Flow Tech Power [2006(202)ELT404(Mad.)]. However, the said accusation is found baseless as there is no direction of the Hon'ble CESTAT to decide the appellant's case mechanically by following the decision in the case of Flow Tech Power. The Tribunal has only observed that the said decision in the case of Flow Tech Power, relied on by the appellant, was not produced before the lower authority while considering the refund claim and, therefore, the matter needs examinat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Cenvat credit relating to such inputs. The answer to this question could be found only after scrutiny of voluminous records of the appellant by a knowledgeable officer and the AD(Cost), being a qualified Cost Accountant at Pune, was the most appropriate person for the job. He examined the appellant's record and found various deficiencies with regard to calculation of the modvat credit amount which was adjusted by them in their refund claims. He mainly pointed out undercalculation of the modvat credit by Rs.31,38,252/- by the appellant for the following reasons:- i) the appellant did not adjust the modvat credit of Rs.9,31,817/- in respect of 15 cases. ii) The input output ratio taken by the assessee for adjustment of modvat is incorrect and the same should be 110: 100 instead of 100.5:100. iii) The appellant had erred by taking monthly modvat figures to arrive at average raw material cost and modvat credit per kg. and difference was found by taking annual modvat credit. The appellant has been silent about the non-reversal / adjustment of modvat credit of Rs.9,31,817/- relating to the 15 listed cases in the report of AD(Cost) but has questioned the other fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... independent and impartial than Shri A.B.Nawal who has given his report as a Cost Accountant in this case challenging the AD(Cost)'s findings despite he is the consultant also of the appellant right from the beginning. Moreover, no such comprehensive report by the appellant covering all the relevant areas as discussed in the Ad (Cost) report, is ever submitted by the appellant alongwith supportive records and evidences. Hence taking of help from the report of the AD(Cost) by the Assistant Commissioner, for taking a decision in this case was unavoidable and is not violative of the CESTAT's directions in its order dtd. 24.08.2011 as it has not been followed blindly." 4.4 We find that the issue involved in matter is no longer res-integra. Tribunal has in case of Flowtech Power [2006 (202) ELT 404 (Mad)] held as follows: "This Civil Miscellaneous Appeal is filed under Section 35G of the Central Excise Act, 1944 by the Revenue against the order dated 03.03.2 005 made in Final Order No.302 / 2005 on the file of the Customs, Excise and Service Tax Appellate Tribunal, Chennai, raising the following substantial questions of law. "1. Whether the Commissioner (Appeals) and the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chennai contending that the items in question manufactured were also classifiable under 84.24 and they had rightly granted exemption under the said notification and the said items were not Tubes and Pipes and other plastics for classification under Heading 391 7.00. The Tribunal in its Order No.1262/2K dated 5.9.2000, allowed the appeal filed by the assessee. Consequent to the said order, the assessee filed a refund claim on 02.03.2001 for Rs.24,47,444/- by way of cash and Rs.71,70,360/- by way of credit in RG 23 A Part II Account on the ground that the CEGAT order held that the pipes used with other components in Drip / Sprinkler Irrigation System should be classified under 84.24 only and the parts of the system also under 84.24 and that they are paying duty under protest vide their letter No.1768/94-95 dated 14.3.95 which was duly acknowledged by the Department. Since there was difference in the working of duty amount claimed, the respondent vide their letter No.141 dated 05.12.2001, filed a Revised Refund Claim for an amount of Rs.25,58,795/- as PLA payment and Rs.64,72,809/- as RE 23 A part II payment. The respondent was issued with a Show Cause Notice dated 26.04.2002 asking t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the respondent had not followed the procedure contemplated under Section 233 B of the erstwhile Central Excise Rules, 1944 and hence, the assessee did not pay the duty under protest. Hence the claim by the assessee respondent for refund was clearly barred by limitation. Further it was submitted that the authorities below had merely relied upon the Certificate issued by the Chartered Accountant and the Profit and Loss Account filed by the assessee and they have not conducted any independent verification. 3. We heard the learned counsel in length. There was a factual finding by the authorities below that the duty had been paid under protest and the question of time bar would not arise. Hence, the argument that the petitioner paid the duty without protest is rejected. In respect of unjust enrichment, the facts reveal that the price was a composite one fixed by the Ministry of Agriculture. The factual position is that the duty had been absorbed by the assessee and it was submitted that the Chartered Accountant's Certificate dated 08.07.2002 and the profit and loss account, also confirm that the duty paid on the impugned goods had been absorbed by the assessee and had been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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