Commissioner Of Central Excise vs Crystal Granite & Marble (P) Ltd

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI

COURT No. I

APPEAL No.E/3284 & 3950/05

(Arising out of Order-in-Appeal No.PII/BKS/259/2005 dated 30/05/2005 & PII/BKS/344/2005 dated 13/09/2005 passed by Commissioner of Central Excise (Appeals), Pune)

For approval and signature:

Honble Mr.M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew,, Member (Technical)

1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy :Seen of the Order?

4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================

Commissioner of Central Excise, Mumbai Appellant Vs. Crystal Granite & Marble (P) Ltd., Respondent

Appearance:

Shri.S.V.Nair, Asst. Comm. (AR) for appellant Shri.Rajesh Ostwal, Advocate for respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

Date of Hearing : 13/10/2015 Date of Decision : 13/10/2015

ORDER NO

Per: M.V. Ravindran

1. These two appeals are filed by the Revenue against Order-in-Appeal No.PII/BKS/259/2005 dated 30/05/2005 & PII/BKS/344/2005 dated 13/09/2005 passed by Commissioner of Central Excise (Appeals), Pune. Since both the appeals are interconnected, they are being disposed of by a common order.

2. Heard both sides and perused the records.

3. The appeal No.E/3284/05 is filed by the Revenue against the impugned order on the ground that the first appellate authority has upheld the order-in-original, which held that the respondent herein is eligible for the benefit of Notification No.6/2003-CE dated 01/03/2003 and Appeal No.E/3950/05 is on the ground that the respondent had claimed the refund of amount of duty paid by them at the adjudication stage. The issue involved in this case is regarding the Central Excise duty payable by the respondent, who is a 100% EOU while making clearance to DTA. The respondent is a manufacturer of granite and marble slabs and cleared the same to DTA as per the provisions and discharged CVD @ Rs.30/- per Sq. Mtr., which was the effective rate under Notification No.6/2003-CE dated 01/03/2003 while it is the case of the Revenue that being an EOU the respondent is required to discharge the CVD at tariff rate, i.e. 16% advalorem. The adjudicating authority dropped the proceedings initiated by show-cause notice by relying upon the various case laws. Aggrieved by such an order the Revenue preferred an appeal to the first appellate authority, who concurred with views of the adjudicating authority and upheld the same.

4. In our considered view, on going through the case records of Appeal No.E/3284/05, we find that the ratio of the various case laws as has been relied upon by the lower authorities is correct. We also find that the issue is no more res integra. The findings of the first appellate authority are very precise and on the point, which needs to be reproduced which we do so.

I have carefully gone through the case records and the various submissions made by the appellants. The issue in the present appeal is whether the refund claim is hit by the doctrine of unjust enrichment or not. In the instant case department contended that duty paid can very well be recovered subsequently by issuing supplementary invoices and/or debit notes and hence took the stand that unjust enrichment is applicable even if the duty is not shown on th invoices at the time of clearance. In this regard, I find that Tribunal in the case of Indian Metals & Ferro Alloys Ltd. (2000 (125) ELt 943) which was also affirmed by Supreme Court vide order dated 17/07/1997 (2001 (127) ELT A 162 (SC) has allowed the partys appeal on the ground that invoices are the best evidence to see whether or not burden of duty has been passed on by the manufacturer. The appellants have produced the copy of invoices along with PLA which clearly indicates that they have not passed on the differential CVD calculated @16%. Departments contention that appellant might have issued subsequent invoices or debit notes and hence the bar of unjust enrichment is applicable cannot be a ground without any evidence.

Further I find that the appellants have produced a CA certificate stating that they have not recovered/claimed the amount of Rs.36,00.934/- from the customers. The appellants have also produced letters from their customers who have certified that they have paid the CVD amount calculated @ Rs.30 per Sq. meter and not @ 16% adv. In this situation the Tribunal decision relied upon by the appellants in the case of Alstom Ltd. Vs. CCE, Allahabad (2004 (168) ELT 511) against which the Civil Appeal was dismissed by the Supreme Court (2004 (173) ELT A 235 (SC) is relevant. In the said decision the Tribunal held that bar of unjust enrichment is not applicable when buyers never paid the duty amount. I therefore, find that the appellants have produced sufficient documentary evidence to show that the incidence of duty has not been passed on to the customers. Also the adjudicating authority has mentioned about the accounting treatment given to duty paid as expenditure and not as receivable and observed that hence there is chance of it being passed on indirectly. In this regard, I find that Tribunal in the case of Sunbeam Auto Ltd. Vs. CCE (2005 (67) RLT 291) has held that principles of unjust enrichment is not applicable since the amount was kept in account as sale expenses and was deducted out of profit.

There is therefore, no merit in the stand of department. The bar of unjust enrichment is therefore not applicable. The refund of Rs.36,00,934/- is therefore admissible to the appellants.

5. It can be seen from the above reproduced findings recorded by the first appellate authority, he has followed the law as laid down by the various courts and more precisely by the Honble High Court of Gujarat and Honble High Court of Delhi. It is also to be noted that the Apex Court has maintained the judgement of the Gujarat High Court and the Delhi High Court, hence nothing survives in this matter, the same has been taken by the Tribunal in the case of CCE Hyderabad Vs. Shanta Biotechnics Ltd.  2010 (259) ELT 447 (Tri-Bang).

6. In view of the factual findings as recorded by both the lower authorities and the authoritative to judicial pronouncements, we find that the impugned order in this appeal is correct and legal and does not suffer from any infirmity.

7. As regards the Appeal No.E/3950/05, we find that consequent to the order-in-appeal in their favour (in appeal No.E/3284/05), the respondent failed refund claim with the lower authorities for sanctioning the refund of the amount which was paid during the proceedings. The adjudicating authority rejected the refund claim on the ground that the documents which were furnished are not sufficient and they have not passed on the incidence of duty to any other person. On appeal, the first appellate authority reversed the order-in-original and held that the appellant has produced various documents before him and that he has not passed on the incidence of duty to their clients. Holding so he allowed the appeal filed by the respondent with direction to the lower authorities to refund the amount to the respondent. The Revenues case is that the appellant had not passed the hurdle of unjust enrichment and has not provided any documents as also that the CVD payable is as per tariff rate. We find that as regards the discharge of CVD, we held that CVD has been correctly discharged @ Rs.30/- per Sq. Mtr. Hence, on this point, there cannot be any dispute.

8. As regards the question of unjust enrichment, the first appellate authority has categorically recorded that invoices raised by the respondent indicate only discharge of Central Excise duty as per Notification No.6/2003-CE and the amount deposited were subsequent to the clearances made by them. On perusal of the records, we find it so. We perused the invoices and also copies of the certificate issued by the various buyers to the respondent herein. We find that the certificates clearly indicate that the purchasers have not paid any excess amount to the appellant as Central Excise duty/CVD.

9. We also note that the appellant had produced a CA certificate before the lower authorities which indicates that the amounts which have been discharged, for which refund is claimed, were the amounts paid under protest from the respondents own pocket and did not pass on the same to their customers. This categorical assertion by the CA in his certificate is not controverted by the Revenue in their appeals. In the absence of any contrary evidence, we have to hold that the first appellate authority was correct in upholding the claim of the respondent that the question of unjust enrichment does not arise. We find no reason to interfere in such a reasoned order passed by the first appellate authority.

10. Accordingly, in view of the foregoing, we hold that both the impugned orders-in-appeals before us, are correct, legal and does not require any interference.

11. The appeals are rejected.

(Pronounced in Court)

(C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial)

pj 1 6

Appeal NoE/3284 & 3950/05