- (1.) HEARD on question of admission.
(2.) APPEAL has been preferred under Section 35-G of the Central Excise Act, 1944, raising the question that whether findings as to unjust assessment and passing of duty to the buyer have been illegally recorded by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi(hereinafter referred to as 'the Tribunal'), Commissioner(Appeals-II), Customs and Central Excise, Jaipur(hereinafter referred to as 'the Appellate Authority') and Deputy Commissioner. It has been found that the appellant has paid excess duty and raised invoices indicating the higher duty so paid while transferring the materials to the weaving division. However, it was claimed that for the purpose of valuation of yarn, the appellant has not included the duty amount paid to the Central Government, which has not been accepted. It has been further found that when the yarn is used for manufacture of grey fabrics and when grey fabrics were sent to the independent processors, the claim that the appellant has not included the value of excise duty paid for determining the value of fabrics also does not stand to reason. No material was placed on record by the appellant to indicate that duty was not passed on to the buyers. It has also been found by the Appellate Authority that a corrigendum was issued on 02.12.2004, whereby the appellant was asked to show cause as to why the refund claim should not be rejected in case the customers of the goods had taken credit of duty paid by the appellant. Submission raised by the appellant that availment of the deemed credit was never alleged in the Show Cause Notices was found to be incorrect, as corrigendum was issued and opportunity of personal hearing was also granted. No material in defence was submitted by the appellant in view of the corrigendum, which was issued. The appellant failed to produce any document showing that the value of processed fabric, on the basis of which deemed credit was availed, did not comprise of duty paid on yarn. Following is the finding recorded by the Appellate Authority: "6. I have carefully gone through the case records and submissions made by the appellants and find that in the case of refund claim mentioned at S. No. 1 of the Table-1 mentioned above, a corrigendum was issued on 2.12.2004 where under the appellants were asked to show cause as to why the refund claim should not be rejected in case the customers of the goods had taken credit of duty paid by the appellants. Therefore, appellants' argument that the availment of deemed credit was never alleged in the Show Cause Notices and the appellants were prevented from putting up their defense arguments is factually incorrect as far as refund claim at S. No. 1 of the said Table is concerned. As regards preventing the appellants from putting up their defense arguments in respect of other two cases, I find that in the case mentioned at S. No. 1 of the Table-I where corrigendum to the show cause notice issued, the Adjudicating Authority had given the appellants, opportunity of personal hearing where their counsel appeared on behalf of the appellants. He, however, had not put forth any additional submissions and simply reiterated the arguments already given before the issuance of corrigendum, therefore, I find that the appellants had nothing to submit in their defence on the said point. As regards the arguments that the grant of deemed credit is not related to the quantum of duty paid on inputs, I find that the deemed credit was calculated with reference to value of fabric which is comprised of cost of yarn, weaving charges, freight, processing charges etc. The appellants have not produced any documents showing that the value of processed fabric, on the basis of which deemed credit was availed, did not comprise of duty paid on yarn. Therefore, it is not correct that grant of deemed credit is not related to the quantum of duty paid on inputs. Since, the deemed credit taken by the appellants on the basis of value of the fabric, which included the duty paid on yarn was utilized for payment of duty on the clearance of processed fabric; the Government has not retained the excess duty paid. Therefore I find that the Adjudicating Authority was right in rejecting the refund claims on this ground. Further, I find that doctrine of unjust enrichment is applicable to refunds arising out of finalization of provisional assessments under Rule 9B of erstwhile Central Excise Rules 1944 as amended vide notification 45/99-CE(NT) dated 25.6.99 and Rule 7 Of Central Excise Rules 2002. As regards arguments of the appellants regarding filing of cost sheets in the format CAS-4 showing that the element of duty was not included in the assessable value of yarn/fabrics captively consumed, I find that non inclusion of duty element in the cost sheets for the purpose of assessment of central excise duty is not a proof that the duty incidence has not been passed on to buyers as the appellants have not given any evidence that the goods were sold to their customers at the price certified in such cost sheets." The Tribunal has affirmed the order passed by the Appellate Authority. The Tribunal has given following reasons: "6. We have carefully considered the submissions from both sides and perused the records. Undisputedly, assessments were provisional and the appellants have paid excess duty and raised invoices indicating the higher duty so paid while transferring the materials to the weaving division. The claim that for the purpose of valuation of yarn they have not included the duty amount paid to the Central Government, does not sound reasonable. When the yarn is used for manufacture of grey fabrics and when grey fabrics were sent to the independent processors, the claim that they have not included the value of excise duty paid for determining the value of fabrics also does not stand to reason. In the case of captive consumption and transfer of material for job work, the practice adopted by the appellant in not including the duty amount in the cost sheet cannot be the deciding factor to determine whether the appellant has passed on the burden to the customers. Apparently, the first sale by the appellants was that of processed fabrics as yarn and grey fabrics were not sold by them. Duty paid on the yarn naturally has to be included in determining the cost of the yarn irrespective of the fact whether the grey fabrics was subject to excise duty or not. It is also not disputed that the independent processors have taken deemed credit while discharging duty on processed fabrics with effect from 1.3.2001. Therefore, the view taken by the authorities below that deemed credit taken by independent processors related to duty on yarn also and therefore, the excess duty paid is deemed to have been passed on to the job worker cannot be faulted in the absence of evidence to the contrary produced by the appellants. It is not disputed that during the relevant period, the refund arising out of finalisation of provision assessment is also subject to provisions of unjust enrichment and that the burden to prove that they have not passed on the duty incidence is on the claimant." It has been submitted by Mr. Sameer Jain, learned counsel appearing on beahalf of the appellant, while placing reliance upon Section 12A of the Act that orders passed proceed in contravention to the provisions of Section 12A of the Act. He vehemently argued that there was no transfer, as yarn was transferred for the purpose of manufacturing of fabrics to other unit of the appellant. Thus, there was no question of liability to be fastened upon the buyers. After hearing learned counsel for the appellant and going through the material available on record, we find that submissions raised by Mr. Sameer Jain, learned counsel appearing on behalf of the appellant are wholly untenable. Submission raised by learned counsel appearing on behalf of the appellant that there was no transfer is of no value. Question of internal transfer was not relevant. The pertinent question was whether the burden of excise duty was ultimately passed upon the buyers or not, with respect to which the appellant has not adduced any evidence.
(3.) IT has been found on facts that the appellant has raised claim of refund of the excise duty. It was incumbent upon the appellant to prove that said burden of duty was not passed on the buyers. The question involved in the instant matter is of unjust enrichment and whether the liability was passed upon the buyers or not. In this regard, specific notice was issued. Thereafter, no defence was adduced; no material was produced by the appellant to show that the value of processed fabric, on the basis of which deemed credit was availed, did not comprise of duty paid on yarn. With regard to filing of cost sheets in the format CAS-4 to show that the element of duty was not included in the assessable value of yarn/fabric captively consumed, it has been found by the Appellate Authority that non inclusion of duty element in the cost sheets for the purpose of assessment of central excise duty is not a proof that the duty incidence has not been passed on to buyers, as the appellants have not given any evidence that the goods were sold to their customers at the price certified in such cost sheets. What was the value, for which the goods were passed on the buyers, has not been indicated. As such refund claim of the appellant has rightly been rejected. Reliance has been placed by learned counsel appearing on behalf of the appellant on provisions of Section 12A of the Act. Section 12A of the Act is quoted below: "12A. Price of goods to indicate the amount of duty paid thereon.-Notwithstanding anything contained in this Act or any other law for the time being in force, every person who is liable to pay duty of excise on any goods shall, at the time of clearance of the goods, prominently indicate in all the documents relating to assessment, sales invoice, and other like documents, the amount of such duty which will form part of the price at which such goods are to be sold." A bare reading of the aforesaid provision makes it clear that every person, who is liable to pay duty of excise on any goods, shall, at the time of clearance of the goods, prominently indicate in all the documents relating to assessment, sales invoice, and other like documents, the amount of such duty which will form part of the price at which such goods are to be sold. The appellant has not adduced any evidence in terms of provisions of Section 12A of the Act, as found by the Tribunal, Appellate Authority and the Deputy Commissioner. ;