9911796707
TMI Blog2024 (7) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... passed on the excess excise duty to their ultimate customer. Merely because they were selling on MRP basis, it would not absolve them from the fact that they had not passed on the original duty charged by the appellant to the ultimate customer and therefore even if they are entitled for refund on merit, they would still not be entitled for refund on the grounds of unjust enrichment under Section 11B. It is found that the judgment by Larger Bench of Hon ble Supreme Court in the case of Commissioner of Central Excise, Madras Vs Addison and Co. Ltd., the Addison and Company case law [ 2016 (8) TMI 1071 - SUPREME COURT] is squarely applicable to the facts of the case in as much as while the appellant is entitled for refund on merits but clearly they are not entitled for refund on the grounds of unjust enrichment as they have not been able to clear the bar of unjust enrichment. In so far as applicability of Section 12B is concerned, Commissioner (Appeals) has relied on various judgments including Grasim Industries Vs CCE, Bhopal [ 2003 (2) TMI 89 - CEGAT, NEW DELHI] , Sangam Processors (Bhilwara) Ltd., Vs Collector of Central Excise, Jaipur [ 1993 (2) TMI 211 - CEGAT, NEW DELHI] , Grasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of Rs. 61,40,933/- should not be rejected, in view of the fact that in their case, the incidence of duty has been passed on and the appellants have not given any evidence to the effect that the incidence has not been passed on to the ultimate customers. In other words, on grounds of unjust enrichment under Section 11B read with provisions of Section 12B of Central Excise Act they are not entitled for refund. Additionally, it was also alleged that in the facts of the case, the appellants had not intimated the quantum of discount at the time of clearance and also not opted for provisional assessment, hence, were otherwise also not eligible for deduction of certain discounts from the transaction value and therefore not eligible for refund of duty paid on such discounts passed on at a later date. 3. The Adjudicating Authority, after going through the submissions of the appellant and CBEC s Excise Manual of supplementary instructions and also the judgment in the case of MRF Ltd., Vs CCE, Madras [1997 (92) ELT 309 (SC)], observed that the appellants had neither declared the marketing policy nor produced any evidence with regard to offering the discounts of any nature to the custome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e passed by Hon ble Tribunal, the Commissioner (Appeals) has not considered the case laws cited in this regard and has taken a contrary view. He also points out that in the impugned order Commissioner (Appeals) has taken into account the Department s contention that the refund was not admissible for the reason that the appellant had not informed the nature of discount to the Department, even though the appellant had brought to the notice of the Adjudicating Authority that Department s appeal is beyond the scope of show cause notice in as much as it alleges that the appellant had not informed the quantum of discount to the Department only. The Learned Advocate says that in the impugned order there is reliance on the MRF case, which basically relates to price revision at a later date subsequent to the clearance of goods, whereas, in the present case the issue involved is determining the quantity discount and the same could be determined only after the quantity sold is ascertained and will not be known at the time of clearance of goods. He also relies on the judgments of the Tribunal in the case of Commissioner of Central Excise, Hyderabad Vs TFL Quinn India Private Ltd., reported at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012 dt. 25.10.2012 13,16 17/2013 (HIII) CE 4 to 7/2013(H-III)CE (D), dated 28.02.2013 3. E/26402/2013 57,58,757 July 2011 to Sept 2011 104/Ref/2012 dt. 24.09.2012 13,16 17/2013 (HIII) CE 4 to 7/2013(H-III)CE (D), dated 28.02.2013 9. The brief fact of the case is that the appellants are clearing cement, on which central excise duty is charged on MRP basis, to their dealers, distributors etc., either directly or through its depots. As per their common practise, the appellants were extending quantity discount and prompt payment discounts to their dealers where the quantity discount rates would be intimated to the dealers and known at the time of clearance of goods but the quantum of discount will be known only after certain period depending on quantity lifted by dealer. Similarly, in the case of receipt of cash discount, it depends on payment at the earliest. They have submitted the copies of the policy documents and circulars showing the rate of discount and MRP etc. As per the practise, at the end of each month, basing on the quantity which a dealer has lifted, the appellants are extending the discount by issuing credit notes to the dealers for the amount of discount which is inclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not on transaction value, hence irrespective of whether the duty paid is less or more, the MRP would remain the same and hence, no presumption arises that the appellant had passed on the duty to the ultimate consumer. They have mainly relied on judgments given in identical facts of the case for earlier period by the Hyderabad Bench in their favour and therefore according to them the issue is no longer res-integra. We have perused these orders. In the Final Order No. A/30128/2016 dated 29.01.2016, the Tribunal was dealing with the rejection of the refund claim on identical set of facts for the period June 2011 involving refund of an amount of Rs. 17,98,058/- on account of excess excise duty paid on account of discounts passed on to the dealers and stockists, subsequent to clearance. In para 4 of the order, the Tribunal dealt with the issue of nondisclosure of quantum of discount to the stockists at the time of clearance and non-opting for provisional assessment. It was also observed that the Department had not disputed that the discounts were actually given and that the appellants having paid duty at higher value. Therefore, relying on the case of Balmer Lawrie and Company Ltd., wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Mills Ltd., [2018 (360) ELT 544 (Tri-Hyd)] and also on the judgment of Larger Bench of Hon ble Supreme Court in the case of Addison and Company Ltd., cited supra. According to him, in the case of Sirpur Paper Mills Ltd., there is a clear observation that in view of the ratio laid down by the Apex Court in the Addison judgment, while the trade discount cannot be disallowed merely on the grounds that they were not paid at the time of each invoice or deducted from the invoice price before clearance, it would not be admissible on the grounds of unjust enrichment. In other words, the rejection of refund on grounds of merits was not held to be sustainable, however, the same was not found eligible on the grounds of unjust enrichment. 14. We find that as far as the issue of refund on merit is concerned, apart from the fact that the matter is no longer res-integra, the refund of the nature claimed by way of credit note, post clearance, would be admissible, however, what is important to note is even if when a refund becomes eligible on merit, it has to clear the bar of unjust enrichment. Various judgments have been cited by Revenue in support of their claim that in the facts of the case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Commissioner of Central Excise, Madras Vs Addison and Co. Ltd., the Addison and Company case law is squarely applicable to the facts of the case in as much as while the appellant is entitled for refund on merits but clearly they are not entitled for refund on the grounds of unjust enrichment as they have not been able to clear the bar of unjust enrichment. The relevant para of the judgment is cited below for ease of reference: 19. The sine qua non for a claim for refund as contemplated in Section 11- B of the Act is that the claimant has to establish that the amount of duty of excise in relation to which such refund is claimed was paid by him and that the incidence of such duty has not been passed on by him to any other person. Section 11-B (2) provides that, in case it is found that a part of duty of excise paid is refundable, the amount shall be credited to the fund. Section 2 (ee) defines Fund to mean the Consumer Welfare Fund established under Section 12-C. There is a proviso to Section 11-B (2) which postulates that the amount of excise duty which is refundable may be paid to the applicant instead of being credited to the fund, if such amount is relatable to the dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is a colourable device declaimed Shri Sorabjee a dirty trick and a shabby thing . The reply of Shri Parasaran to this criticism runs thus: It ill- becomes the manufacturers/Assessees to espouse the cause of consumers, when all the while they had been making a killing at their expense. No consumers' organisation had come forward to voice any grievance against the said provisions. Clause (e) of the proviso to sub-section (2) of Section 11- B does provide for the buyer of the goods, to whom the burden of duty has been passed on, to apply for refund of duty to him, provided that he has not in his turn passed on the duty to others. It is, therefore, not correct to suggest that the Act does not provide for refund of duty to the person who has actually borne the burden. There is no vice in the relevant provisions of the Act. Rules cannot be relied upon to impugn the validity of an enactment, which must stand or fall on its own strength. The defect in the Rules, assuming that there is any, can always be corrected if the experience warrants it. The Court too may indicate the modifications needed in the Rules. The Government is always prepared to make the appropriate changes in the Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instruction at para 2.5 (iv) of Para III of Chapter 3. Para 10 of the impugned order is reproduced below: 10. The said Circular dt: 30.06.2000 (supra) and/or para 2.5 (iv) of part II of Chapter 3 of supplementary instructions, clarified the position of the law that the quantity discount could have been an eligible abatement from transaction value, in case: (i) such discount was known prior to the clearances and was offered as a common practice; (ii) it was established that the discount for a given transaction had actually been passed on to the buyer of the goods. (iii) it was extended as per the commercial considerations, irrespective of the fact whether the quantum of such discount of any description for a transaction was known prior to the clearances or not (similar to year-end discount); and (iv) the assessee disclosed the intention of allowing such quantity discounts to the department and necessarily made a request for provisional assessment in terms of Rule 7 of Central Excise Rules, 2002. 19. Further, in para 11, he has observed that the facts on record has revealed that the first 3 parameters were satisfied with regard to quantity discount offered by the appellant but the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
