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TMI Blog2023 (11) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The Hon ble Supreme Court rendered the above judgment in a different context. However, the observations of the Apex Court throw light on the fact that the presumption vis- -vis doctrine of unjust enrichment is a rebuttable presumption. The appellants have submitted the evidence and argument in their favour. To that extent, it is found that the presumption has been rebutted by the appellants. As a result, it is for the Department to negate the evidence submitted by the appellants. It is found that once the presumption under the doctrine of unjust enrichment is rebutted with documentary evidence, it cannot be negated by another presumption. It can only be negated by producing evidence contrary to the rebuttal of the appellant. Mere stating that the fact of price remaining same will not be an inevitable conclusion to establish that incidence of duty has not been passed on, is not enough. Looking into the facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge blades and razor blades (double edge); the appellants were supplying goods from his factory to the various depots availing exemption under Notification No. 50/2003-CE dated 10.06.2003 having filed a declaration dated 21.11.2006; the goods are sold to the customers from the said depots; meanwhile Notification No.50/2003 was amended by Notification No.01/2008-CE dated 18.01.2008 to provide that the exemption contained shall not apply to such goods which have been subjected to only one or more of the processes viz., preservation during storage, cleaning operations, packing or re-packing of such goods in unit container or labelling/ re-labelling of container, sorting, declaration or alteration of RSP and have not been subjected to any other process or processes; pursuant to the amendment, the appellants have registered themselves on 08.02.2008 and cleared the goods, on payment of duty under Section 4A of the Central Excise Act, 1944, under Protest, to their depots; the appellant issued commercial invoices to customers on further clearance from depots; there was no change in the MRP after or prior to January 2008 to March 2008 or after that. 2.1. Meanwhile, the appellants vide Wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss account; under these circumstances, the Tribunal held that the case was hit by bar of unjust enrichment. He submits that the facts of the case before us are different from the above case; in the instant case, the appellants were all along contending that exemption under Notification No.50/2003 was admissible to them; only on the insistence by the Department, duty was paid during the impugned period i.e. January to March 2008 under Protest; Hon ble High Court of Himachal Pradesh upheld the contention of the appellants; it is pertinent to note that appellants have been discharging duty on MRP basis which was not changed during the impugned period. 5. Learned Counsel further submits that the Cost Accountant Certificate cannot be brushed aside lightly; it was held in Automotive Marketing Private Limited- 2021 (53) GSTL 393 (Tri. Bang.) that CA Certificate needs to be given due credence. He further submits that the appellants are exempted in terms of Notification No.50/2003 and as such, no Excise duty is payable; as the goods were exempted, they have not issued any tax invoice in respect of clearances from the factory to the depots. Learned Counsel for the appellant demonstrates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. He relies on the following cases: Shree Baidyanath Ayurved Bhawan Ltd.- 2009 (238) ELT 680 (Tri. Mumbai). Interach Building Products (P) Ltd.- 2005 (184) ELT 154 (Tri. Del.). SRF Ltd.- 2006 (193) ELT 186 (Tri. LB). Cement Corpn. Of India Ltd.- 2007 (219) ELT 329 (Tri. Del.) Cement Corpn. Of India Ltd.- 2008 (232) ELT A107 (party s appeal dismissed by the Hon ble Supreme Court). Philips Electronics India Ltd.- 2010 (257) ELT 257 (Tri. Mumbai). Sahakari Khand Udyog Mandal Ltd.- 2005 (181) ELT 328(SC). 8. Heard both sides and perused the records of the case. The brief issue for consideration in the instant case is whether the refund claim filed by the appellants is hit by the bar of unjust enrichment. The appellants have succeeded before the Hon ble High Court of Himachal Pradesh, in Writ Petition No.589 of 2008, regarding the applicability of amendment to the Notification No.50/2003-CE dated 10.06.2003, by virtue of Notification No.01/2008-CE dated 18.01.2008. Hon ble High Court held that the amending Notification is prospective and affects those industrial units involved in the manufacturing process of packing, re-packing, labelling, re-labelling etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority relies on the invoices issued by the appellants from the factory to their depot and finds that the appellant had paid the duty and also collected the same from the buyers and therefore, the claim is hit by unjust enrichment. He relies on the Hon ble Apex Court s decision in the case of Sahakari Khand Udyog Mandal Ltd. (supra) and Philips Electronics (India) Ltd. (supra) and holds that the uniformity of the prices is not evidence itself to prove that the incidence of duty has not been passed on. Learned Commissioner (Appeals) relies on the same and upholds the OIO. We find that the OIO and OIA considered only the invoices raised by the appellants from their factory to their depot to conclude that the incidence of duty has been passed on to the ultimate buyers. The appellants claim that they have not passed on the incidence of duty on further sale from their depots. The impugned order finds that it goes without saying that the MRP of any manufactured goods is the aggregate of various costs, expenses, duties and taxes borne by the manufacturer as also the freight, buyer s margin and selling expenses incurred downstream; the amount of such costs, expenses, duties/ taxes and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owledgeable 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 sellers market. 12. The Hon ble Supreme Court rendered the above judgment in a different context. However, the observations of the Apex Court throw light on the fact that the presumption vis- -vis doctrine of unjust enrichment is a rebuttable presumption. The appellants have submitted the evidence and argument in their favour. To that extent, we find that the presumption has been rebutted by the appellants. As a result, it is for the Department to negate the evidence submitted by the appellants. We find that while doing so, the Revenue has relied on the presumption that MRP value though it is not changed before and after the incidence of duty, all the elements like cost, labour, taxes, duties, expenses, margin etc. are built into the fixing of MRP and therefore, the appellant s contention is not acceptable. We find that once the presumption under the doctrine of unjust enrichment is rebutted with documentary evidence, it cannot be negated by another presumption. It can only be negated by producing evidence contrary to the rebuttal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not free to challenge or alter the MRP so fixed. MRP of the product during the period when normal rate of duty was paid and after 24-8-04 remained the same. It has also been noticed by the appellate authority that some of the other franchisee also availed exemption under Notification No. 9/02 dt. 1-3-2002 but the MRP of all of them remained unchanged during the entire period. This clearly indicate that duty burden has not been passed on to their customers. Commissioner (Appeals) has relied upon the Trbunal s decision in the case of Swarup Fibre v. CCE,2000 (120) E.L.T. 510 (T) and ITC Bhadrachalam Paper v. CCE,2002 (146) E.L.T. 582 (T). He also referred to a copy of the affidavit dated 2nd September, 2005 duly notarized and solemnly affirming that they have not passed on the burden of duty involved to another person and have also submitted documentary evidence to show that MRP of goods remained constant before and after payment of excess duty. 15. Tribunal in the case of Swarup Fibre Industries Ltd. - 2000 (120) E.L.T. 510 (Tribunal) held that: 4 . We have carefully considered the submissions of both the sides. We fully agree with ld. Advocate that as no change has taken p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usion that the assessee had not passed on the burden of the customs duty to its customers. This finding is a finding of fact based on evidence which does not call for any interference. Accordingly, this appeal is dismissed. No costs. 17. It was held in Infar (India) Ltd.- 2002 (150) E.L.T. 411 (Tri. Del.) that: 9 . Now let us examine the facts of the present case in the light of the above proposition laid by the Apex Court. The appellants apart from pleading that they have not increased the sale price of their product even after increase in the rate of duty, have also pleaded that their sale invoices clearly mentioned that the price does not include customs duty. They pleaded that when the same invoice bears the endorsement that the sale price does not include customs duty, it is evident that no customer would have paid the duty to them. It is difficult to figure out as to what more a seller could do to make his intention clear to the buyer that he is not passing the duty element in the sale price of the goods to him than to make a mention of this in the invoice for the sale of the goods? The Tribunal in its decision in J.C.L. International Ltd. v. C.C.E., Ghaziabad, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng recoverable from customs on account of excess duty as they were contesting the same with the department and therefore it can safely be concluded that they have included the said excess duty amount in their costing and passed on the burden of said duty to third party is subjective, arbitrary and unreasonable. At that time, the company was still contesting the levy of customs duty on the product imported by them in an appeal before the CEGAT. They therefore would not have known whether they would succeed in their appeal and if successful, consequently how much amount they would get from the department as refund. It, therefore, would have been highly presumtuous on their part to reflect an amount in their books of account as due from the customs department, the receipt and the quantum of which was still in limbo. 10 . In view of the above analysis, I am of the view that the appellants - on the given evidence - have successfully rebutted statutory presumption held against them under Sec. 28D of the Customs Act, 1962. I, therefore, hold that the incidence of duty has not been passed on to the customers and the appeal is to be allowed as held by the ld. Member (T). 18. Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment that all taxes and duties would have been considered while fixing the MRP. In the instant case, Revenue has lost sight of the fact that the said MRP was fixed by the appellants during the no-duty regime. Therefore, the very fact of non-upgrading the MRP when the taxes were paid would in itself constitute evidence that the incidence of duty has not been passed on. This being so, Department cannot come to the conclusion on the basis of the invoices issued from factory to their own depot. It cannot be said that they have recovered duty from themselves. The ultimate test of passing on the incidence of duty lies in the transaction of the appellants with the ultimate customers i.e. in the transaction between their depot and the customers. The MRP being constant as discussed above, the test of presumption, that duty must have been inbuilt in MRP and must have been passed on, fails the test of reasonable fairness. 20. In addition to the appellant s claim that their prices were constant, they have submitted that the said duty paid by them has been accounted as receivables in their records. The Cost Accountant in his certificate dated 13.08.2009 has been categorical in his assertion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said decision, we hold that the Appellants are entitled to get the amount of refund sanctioned to them by the Adjudicating Authority. 21. It was also held in the case of Elgi Tyres Tubes Pvt. Ltd. 2009 (248) ELT 574 (Tri. Bang.) that: 8 . Learned Commissioner (Appeals) while arriving at the above reproduced conclusion has relied upon the decision of this bench in the case of ATS India [(2006 (199) E.L.T. 123)] Sipani Automobiles [(2004 (176) E.L.T. 807)] and ITC Bhadrachalam Paper Boards [(2002 (146) E.L.T. 582)]. We find that the leaned Commissioner (Appeals) findings in paragraphs 7 are very clear. We also concur with the view expressed by the learned Commissioner (appeals) that if the adjudicating Authority is not able to arrive at conclusion based upon the Cost Accountant s Certificate, he could have ordered the inspection of the records, by resorting the provisions in the CEA 1944. Having not done so, plainly inferring that the Cost Accountant s certificate is not backed with corroborative evidences is not sufficient reason for rejecting the refund claim. On perusal of the cost Accountant s certificate, we find that the Cost Accountant has clearly indicated in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf-handed manner. We find that there is merit in the argument of the appellants that the impugned order has not given any specific findings regarding the correctness and genuineness of the Cost Accountant Certificate; it is trite in law that the Cost Accountant Certificate is one of the sufficient conditions to substantiate that the incidence of duty has not been passed on to the customers; the onus to disprove the Cost Accountant Certificate is with the Department and the same has not been discharged. The impugned order having been issued despite the evidence in the form of the certificate and without giving reasons as to why the same has not been taken into account cannot be held to be legally sustainable. 24. Revenue relies on the cases of Shree Baidyanath Ayurved Bhawan Ltd., Interach Building Products Pvt. Ltd., SRG Ltd., Cement Corporation of India Ltd. Philips Electronics (India) Ltd., Sahakari Khand Udyog Mandal Ltd., Makson Healthcare Pvt. Ltd. and Allied Photographics India Ltd. (all supra). We find that, though, it was held that goods being sold at MRP does not lead to an inevitable conclusion that incidence of duty has not passed on, in that case the invoices issued ..... X X X X Extracts X X X X X X X X Extracts X X X X
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