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TMI Blog2024 (7) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... s, they had not passed on the burden of duty incidence to their customers. 2. In Appeal No. E/26376/2013, the Department after having examined the refund claim, issued a show cause notice dated 28.09.2012, asking the appellant as to why the refund 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relied upon certain circulars, which requires that provisional assessment is must for refund of duty paid in excess. The Learned Advocate for the appellant have also submitted that in view of various judgments and some of the judgments in their own case 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 determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al No. Amount of Refund (Rs.) Period OIO No. & Date OIA No. & Date 1. E/26376/2013 61,40,933 Oct 2011 to Dec 2011 112/Ref/2012 dt. 25.10.2012 13,16&17/2013 (HIII) CE & 4 to 7/2013(H-III)CE (D), dated 28.02.2013 2. E/26377/2013 74,72,822 Jan 2012 to Mar 2012 113/Ref/2012 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation Ltd., Vs CCE, Lucknow [2017 (358) ELT 443 (Tri-All)] c) Dabur India Ltd., Vs CCE, Patna [2024 (6) TMI 170 - CESTAT-Kolkata] d) M/s Gillette India Ltd., Vs CCE, Chandigarh-I [2023 (11) TMI 154 - CESTAT- Chandigarh] 11. Learned Advocate also submits that since the appellants have paid duty on MRP and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case were considered by the Tribunal and decided in their favour. However, whether said orders would have effects on both the issues or otherwise needs to be further analysed. 13. However, per contra, the Learned AR has mainly relied on one judgment of Hyderabad Bench of the Tribunal in the case of Sirpur Paper 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 ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey 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. 16. We find 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 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 cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ighly difficult for any consumer organisation to get the grant. There is no provision in the Act, Shri Nariman submitted, to locate the person really entitled to refund and to make over the money to him. "We expect a sensitive Government not to bluff but to hand back the amounts to those entitled thereto", intoned Shri Nariman. It 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 upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f credit notes raised by him towards turnover discount. 18. We also observe that the Commissioner (Appeals) has in the impugned order examined the facts of the case to decide whether refund is entitled on merit or otherwise. He has also examined the clarification issued by the Board vide Circular F.No. 354/81/2000-TRU as well as the supplementary 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealt with adequately by the Commissioner (Appeals) who has given reasons for relying on certain judgments for coming to the conclusion that in the facts of the case, the principle of unjust enrichment would be applicable. We also find that the issue of applicability of unjust enrichment in the facts of the case are also covered by the ratio of judgment of Larger Bench of Hon'ble Supreme Court in the case of Commissioner of Central Excise, Madras Vs Addison and Company Ltd. Since the appellants have failed to prove that they had not passed on the excess excise duty to their ultimate customer, they would be hit by the provision of Section 12B. Therefore, while the refund is eligible on merits, the same cannot be disbursed to the appellant and is required to be dealt with in accordance with the provisions under Section 12D. Therefore, part of the observations of the Commissioner (Appeals) as regards non-entitlement of the refund on merit is not sustainable. However, his order is sustainable as regards applicability of unjust enrichment in the facts of the case.
21. Appeals disposed off accordingly.
(Order pronounced in open court on 19.07.2024) X X X X Extracts X X X X X X X X Extracts X X X X
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