K.K. Agarwal, Member (T) - (1.)THE brief facts of the case are that the appellant had contract with Indian Railways for supply of brake blocks, brake shoes and anti-creep bearing plates. THEse were manufactured by them and classified by them under Chapter heading 7307.00 and 7307.10 and the appellants have claimed full exemption under notification 208/83-CE dated 1.8.83 for these products. Under the laid contract the excise duty was shown as nil but it was mentioned that if and when it becomes applicable during the currency of the contract the same will be charged. This contract was entered into in the year 1986. THEy were, however, issued a show cause notice stating that the goods were classifiable under Chapter heading 8602.00 and accordingly they were liable to pay duty. On receipt of the show cause notice they deposited a sum of Rs. 10,03,348.24 under protest on 19.9.88 and also addressed a letter to the Railways for payment of excise duty at the rate of 15% ad valorem against their purchase order dated 20.2.86. However, the Railways vide their letter dated 12.5.89 replied that their request for payment of excise duty is not agreed to as, such a duty was payable from 1.8.83 but the appellants have clearly quoted in their letter that there is no excise duty at present. THE matter of correct classification was agitated by them and the same was decided by the Collector, Nagpur vide OIO No. 30/88 where he confirmed the demand of duty of Rs. 10,49,630/- and imposed a penalty of Rs. 20,000/-. Aggrieved by the order, they filed an appeal before the Tribunal and the Tribunal vide 31.7.1997 allowed their appeal. THE appellants thereafter filed a refund claim in pursuance of the Tribunal order in September 1997. However, they were issued a show cause notice on 8.2.99 stating that why the claim after sanction be not transferred to Government Welfare Fund on the ground that they have not submitted any documentary evidence that the central excise duty paid by them has not been recovered from the customer. On 26.2.1999 the Asst. Commissioner wrote to Indian Railways regarding payment of excise duty by them but the Indian Railways vide their letter dated 26.5.1999 informed the Asst. Commissioner that since the matter has become 12-13 years old they are unable to furnish the required documents as they preserve the purchase order for a period of 6 years only. THE matter was thereafter adjudicated by the Asst. Commissioner who vide order dated 27.1.00 transferred the refund amount to the Consumer Welfare Fund on the ground that there is no confirmation from the Railway authorities regarding payment. This order has been upheld by the order in appeal by 31.8.2001 against which the appellants have come up in appeal before us.
(2.)The learned advocate for the appellants submit that in this case the duty has been paid after clearance of the goods and the contract order specifically slated there is no duty for present and after issue of show cause notice to them they have asked Railways to pay the duty which was denied by them and therefore the question of recovery of duty does not arise. The matter has been badly delayed by the department and on account of inability of the railways to furnish information regarding payment of duty in respect of purchase order which was 13 years old the refund cannot be denied to them as there is no evidence available with the revenue to establish that the duty has been recovered. In view of this, the Commissioner (Appeals)'s order needs to be set aside and the refund should be granted to them.
2.1 The learned DR reiterates the finding of the Commissioner that since there is no confirmation from the railways authorities about payment/non-payment of central excise duty it cannot be held that the appellants have not recovered duty from the customers.

We have considered the submissions. We find that in this case the duty has been deposited after clearance of the goods under protest and therefore there was no way the appellant could have recovered the duty at the initial stage when the goods were cleared. On issue of a show cause notice they have sought to recover duty from the railways but they have vide letter dated 12.5.89 refused to make payment of any duty. The appellants have therefore discharged their burden to prove that the duty has not been recovered from the customer. If the revenue still entertains a doubt that duty may have been subsequently recovered, then it has to come up with a evidence to show that duty was so recovered. In the absence of the same, it has to be held that the appellants have not passed on the incidence of duty to the customers. In view of this, we set aside the order of the Commissioner (Appeals) and allow the appeal with consequential relief.

(Dictated in Court)