M/S. Drytech Processes (I) Pvt. Ltd vs C.C.E. & S.T. Bhopal

[Arising out of Order-In-Appeal No. BPL-EXCUS-000-APP-041-14-15, dated 22.05.2014 passed by Commissioner (Appeals) Bhopal]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

1 Whether Press Reporters may be allowed to see 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 CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

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

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Drytech Processes (I) Pvt. Ltd. ...Appellant

Vs.

C.C.E. & S.T. Bhopal Respondent

Appearance:

Mr. B. L. Narsimhan (Advocate) for the Appellant

Mr. Pramod Kumar, DR for the Respondent

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing.23.06.2015

Final Order No. 54001/2015_

Per S K Mohanty:

Rejection of refund claim on the ground of unjust enrichment is the subject matter of present dispute.

2. The brief facts of the case are that the appellant entered into the Contract Manufacture Agreement with the principal manufacturer M/s Nestle India Ltd., by which goods manufactured by the appellant were to be sent directly to the distribution centers of the principal manufacturer. During the disputed period, the appellant inadvertently calculated excise duty on an incorrect MRP. The duty required to be paid on the price of Rs. 65 per sachet, less abatement of 35%. Whereas, appellant paid duty by considering MRP as Rs. 310 per sachet less abatement. The mistake in wrong invoicing was noticed by the manufacturer, who raised a debit note and debited the appellants account to rectify such error. Upon issuances of the debit note, the appellant had filed the refund application before the Jurisdictional Central Excise authorities, claiming refund of excess excise duty paid. The refund application filed by the appellant was rejected by the Assistant Commissioner vide order dated 29.04.2013. In appeal, the Ld. Commissioner (Appeals) vide the impugned order dated 22/05/2014 has upheld rejection of the refund application by the original authority. Feeling aggrieved with the impugned order, the appellant has filed present appeal before this Tribunal.

3. Sh. B. L. Narsimhan, the Ld. Advocate appearing for the Appellant submitted that the distribution centers of the principal manufacturer charged correct price from the retailers at the rate of Rs. 65 per sachet only and no excess excise duty was recovered from the final customers. The Ld. Advocate further submitted that the debit note furnished before the refund sanctioned authority clearly demonstrate one to one correlation of all invoices and the excise duty paid thereon. It is the submission of the Ld. Advocate that there was no scope on the part of the principal manufacturer to avail cenvat credit of excess duty paid on the ground that the goods, in question, were not used for further manufacturer of final product, and the same were merely sold as such by the principal manufacturer through its distribution centers to the retailers. The Ld. Advocate also placed reliance on the certificate issued by the Chartered Accountant to justify his stand that there was no sale of goods by the appellant to principal manufacturer and the appellant had not received the excess excise duty paid inadvertently. To support his stand that the doctrine of unjust enrichment is not applicable to the fact of the present case, the Ld. Advocate has relied on the following decisions rendered by the Judicial forums:-

(a) CCE, Bangalore-II vs. Mysore Electrical Industries Ltd., 2011 (267) ELT 607 (Kar.);

(b) CCE, Mangalore-III vs Solaris Chemtech Ltd., 2011 (273) ELT 191 (Kar.);

(c) Union of India vs A.K. Spintex Ltd., 2009 (234) ELT 41 (Raj.); and

(d) Sudhir Papers Ltd. vs. CCE, Bangalore, 2012 (276) ELT 304.

4. On the other hand, Sh. Pramod Kumar, the Ld. DR appearing for the respondent reiterated the findings recorded in the impugned order and further submitted that non-passing of the duty incidence has not been satisfactorily discharged by the appellant, thus, rejection of refund claim on the ground of unjust enrichment is justified.

5. I have heard the Ld. Counsel for both sides and perused the records.

6. It is an admitted fact on record that distribution centers of the Principal Manufacture charged correct price from the retailers at the rate of Rs. 65 per sachet only and no excess Central Excise duty was recovered from the final customers. This is evident from the invoices enclosed to the appeal paper book. Furthermore, I find that the appellants have also submitted along with the refund claim, a detailed chart showing comparison of invoices raised by the Appellants and distribution centers of the Principal Manufacture. The Chart clearly shows details such as invoice number, invoice date, quantity, MRP etc. Further, the debit notes enclosed in the appeal paper book also show the detailed one-to-one co-relation of all invoices, duty payable, duty paid and duty paid in excess. Similarly, the observations in the impugned order that no evidence of stock transfer invoices have been provided by the Appellants is not appreciated, in view of stock transfer invoices enclosed to the appeal paper book and also placed along with the refund claim. Further, on perusal of the appeal papers, I find that upon examination of records of the Appellant, the Chartered Accountant firm M/s Anay Gogte & Co. vide their Certificate dated 01.02.2014 have certified that there were no sale of goods by the Appellants to the Principal Manufacturer and the Appellants have not received the excess excise duty paid inadvertently. Therefore, I am of the view that the authorities below have not properly scrutinized the records, in arriving at the conclusion that the incidence of Central Excise duty has been passed on by the appellant.

7. In view of the foregoing discussions, I am of the considered opinion that the refund claim filed by the appellant is not hit by the doctrine of unjust enrichment, as the excess amount of duty has not been passed on by the appellant to any other person. Therefore, the impugned order is set aside and the appeal is allowed in favour of the appellant with consequential benefit of refund.

(Operative part of the order pronounced in open court)

(S. K. Mohanty)

Member(Judicial)

Neha

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