Miscellaneous Appeal No. 1111 of 2007 · High Court · 2007

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 08.06.2007CORAMTHE HON'BLE MR.JUSTICE P.D.DINAKARANANDTHE HON'BLE MR.JUSTICE P.P.S.JANARTHANA RAJACivil Miscellaneous Appeal No.1111 of 2007Commissioner of Central Excise,Chennai III Commissionerate,Chennai-600 034...Appellant Vs.1. M/s.Saralee Household & Bodycare India (P) Ltd., Unit I, E.S. Industrial Estate, Maraimalai Nagar, Chennai-603 209.2. Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Shastri Bhawan Annexe, I Floor, 26, Haddows Road, Chennai-600 006...RespondentsAppeal under Section 35G of the Central Excise Act, 1944against the Final Order No.899 of 2006 dated 21.09.2006 on thefile of the Customs, Excise & Service Tax Appellate Tribunal,South Zone Bench, Chennai.For Appellant : Mr.K.Ravichandrabaabu, SCCGJUDGMENT(Judgment of the court was delivered byP.P.S.Janarthana Raja, J.)This appeal is filed by the Revenue against the Final OrderNo.899 of 2006 dated 21.09.2006 on the file of the Customs, Excise& Service Tax Appellate Tribunal, South Zone Bench, Chennai,raising the following substantial questions of law:- https://hcservices.ecourts.gov.in/hcservices/

1. Whether the Hon'ble Tribunal is right inholding that the assessee had successfullyrebutted the presumption of unjust enrichmentcontained in Section 12B of Central ExciseAct, 1944, relying on the case of PrideForamer Vs. Commissioner of Customs (2006(200) ELT 259 (Tri-Mumbai), wherein thecertificate of Chartered Accountant wasaccepted as rebuttal of the presumption, whenthe issue in that case was refund of Securitydeposit whereas the question in the instantcase is that of refund of Excise duty?2. Whether the Hon'ble Tribunal was right inholding that ratio of the Apex Court'sdecision in the case of Commissioner Vs.M/s.Allied Photographics India Ltd. (2004(166) ELT (SC) had not been correctly appliedto the facts of this case by the department,when it is an admitted position of increase inprices during the disputed period and when ithad been held by the Hon'ble Supreme Courtthat even uniformity in price before and afterthe assessment did not lead to the inevitableconclusion that incidence of duty had not beenpassed on to the buyer?2.The brief facts arising out of this Appeal are as under:The assessee company is engaged in the manufacture of Dranex50g, Dranex 400g and Flush Kleen Powder 500g among other products.The assessee had classified the above products under CentralExcise Tariff Sub Heading 3402.90 and paid the duty @ 30% uptoFebruary 1992. Subsequently, the assessee company felt that theirproducts were classifiable under Ch.3405.40 (Duty payable @ 20%).Since the classification filed by the assessee company earlierunder 3402.90 was not approved, they resorted to pay the duty (asapplicable to 3402.90) under protest and filed their letter ofprotest on 09.03.1992 with the Assistant Commissioner of CentralExcise, Madras VIII Division. The said Assistant Commissioner ofCentral Excise confirmed the classification of the disputedproducts under Ch.3402.90. Aggrieved by the order, the assesseefiled an appeal to the Commissioner (Appeals). The saidCommissioner (Appeals), allowed the appeal with a consequentialbenefit thereby revising the classification of the products from3402.90 to 3405.40. In consequence of the same, the assesseefiled a refund claim for Rs.17,94,892/- being the differentialduty paid by them under protest. Later, the AssistantCommissioner of Central Excise, issued a Show Cause Notice as towhy their refund claim should not be restricted to Rs.17,69,141/-and why the reduced amount should not be sanctioned and creditedin the Consumer Welfare Fund. The assessee replied to the above https://hcservices.ecourts.gov.in/hcservices/ Show Cause Notice and the Assistant Commissioner of Central Excisepassed an order dated 22.06.1998 rejecting the refund claim filedby the assessee. Aggrieved by the order, the assessee filed anappeal to the Commissioner of Central Excise (Appeals). TheCommissioner of Central Excise (Appeals) rejected the appeal andconfirmed the order of the Assistant Commissioner of CentralExcise. Aggrieved, the assessee filed an appeal to the Customs,Excise & Service Tax Appellate Tribunal ("Tribunal" in short).The Tribunal allowed the appeal and revised the order of theCommissioner of Central Excise (Appeals). Hence the presentappeal by the Revenue.3.Learned counsel appearing for the Revenue submitted thatthe assessee failed to prove to the satisfaction of theauthorities that the assessee had not passed on the excess burdenand unless it is proved, the assessee is not entitled to therefund. Hence the orders passed by the lower authorities are inconfirmity with law. 4.Heard the counsel. It is seen from the records thatwhat was collected by the assessee from the buyers was only theprice of the goods plus duty @ 20%, though duty at higher rate wasindicated in the statutory invoices. The assessee produced booksof account along with certificates issued by their CharteredAccountant. These documents clearly indicated that the ExciseDuty (10%) paid by the assessee was kept as "Receivable fromGovernment" or "Current Assets" in the books of account. Thefactual position was clear from the contemporary accounts and thecertificates issued by the Chartered Accountant. Hence, therefund claim ought not to have been rejected on the ground ofunjust enrichment. The Tribunal considered the materials andevidence and held as follows:-"4. We have considered these submissions also.It is true that, in the present case, therehas been some price increase during the courseof the above period as evidenced by therelevant commercial invoices. The Revenue hasnot shown that such price increase was notreflected in the statutory invoices. Hencethe ratio of the apex court's decision has notbeen correctly applied to the facts of thiscase by the ld. SDR. In the case of PrideForamer (supra) cited by learned counsel,Balance Sheets and Chartered Accountants'certificates were considered by the Tribunaland it was held that the assessee hadsucceeded in establishing that the burden ofduty had not been passed on to their buyers.In the present case, it is not in dispute thatthe Chartered Accountant's certificates and https://hcservices.ecourts.gov.in/hcservices/ books of accounts for the period of disputewere produced by the assessee to show that theExcise Duty paid in excess was retained as"receivables from Govt.". The lowerauthorities have not rebutted the authenticityof the documentary evidence adduced by theassessee. In the circumstances, as in thecase of Pride Foramer (supra), we must holdthat presumption of unjust enrichment underSection 12B of the Central Excise Act wassuccessfully rebutted by the assessee. 5. In the result, the claim for cash refund ofthe excess Excise Duty requires to be allowed.It is ordered accordingly. The appeal standsallowed."From a reading of the above, it is clear that the Tribunal hadgiven a factual finding that only 20% of duty alone was collectedfrom the customer and the balance of 10% is not collected or notpassed on to the customers. The above fact was also amply provedby the certificates of the Chartered Accountant as well as booksof account for the period in dispute. Hence, the reasons given bythe Tribunal are based on valid materials and evidence and we donot find any error or legal infirmity in the order of the Tribunalso as to warrant interference.5.Under the circumstances, no substantial questions of lawarise for consideration of this Court and accordingly the CivilMiscellaneous Appeal is dismissed. Consequently, M.P.No.1 of 2007is closed. No costs. kmSd/Asst.Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To1. The Assistant Registrar, Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Shastri Bhawan Annexe, I Floor, 26, Haddows Road, Chennai-600 006.2. The Commissioner (Appeals), Office of the Commissioner of Central Excise (Appeals), Chennai-600 034.3. The Assistant Commissioner, Office of the Assistant Commissioner of Central Excise, Chenglepet Division, Tambaram, Chennai-45.4. The Commissioner of Central Excise, Chennai IIICommissionerate,Chennai 34+ one cc to Mr. K. Ravichandrababu, Advocate sr no. 32798ssv(co)nm(20.07.07) C.M.A.No.1111 of 2007