Sahyandri Industries Ltd vs Commissioner Of Central Excise, Pune
- CitationAPPEAL NO. E/263/10
Ratio decidendi
The rule this decision rests on
Where an assessee has booked excess duty paid as an expense in its profit and loss account, the incidence of that duty is treated as having been passed on to the buyers, so that the refund claim is prima facie hit by the bar of unjust enrichment. Where the assessee has subsequently revised its balance sheet to show the refund amount as receivable under loans and advances, the bar of unjust enrichment may be displaced, provided the revised balance sheet is found genuine and correct, having been audited or acknowledged before the income tax authority. Such revised accounts, not having been placed before the original or appellate authority, cannot be relied upon at the appellate stage without verification by the original adjudicating authority, and the matter is therefore remanded for de novo adjudication to verify the revised balance sheet and decide the refund accordingly.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in- Appeal No. PIII/VM/253/2009 dtd. 26/11/2009 passed by the Commissioner (Appeals), of Central Excise, Pune-III]
For approval and signature:
Honble Mr Ramesh Nair, Member(Judicial)
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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 : 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? =======================================================
Sahyandri Industries Ltd. : Appellants
VS
Commissioner of Central Excise, Pune. : Respondent
Appearance
Shri. Bharat Raichandani, Advocate for the Appellants Shri. Sanjay Hasija, Superintendent (A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 11/5/2015 Date of decision: 11/5/2015
ORDER NO.
Per : Ramesh Nair
This appeal is directed against Order-in- Appeal No. PIII/VM/253/2009 dtd. 26/11/2009 passed by the Commissioner (Appeals), of Central Excise, Pune-III, wherein the Order-in-Original dated 1/6/2009, rejecting refund claim on the ground of unjust enrichment, was upheld and the appeal of the appellant was rejected. The issue involved in the present case is refund claim of appellant was rejected by the adjudicating authority on the ground of unjust enrichment inasmuch as appellant have booked excess duty paid under the head of expenditure in the profit and loss account and same was not mentioned in as receivable in the balance sheet. Aggrieved by order -in-original dated 1/6/2009 the appellant filed appeal before the Commissioner (Appeals), who maintained order of the original authority and rejected the appeal of the appellant, hence appellant is before me.
2. Shri. Bharat Raichandani, Ld Counsel for the appellant submits that even though amount of duty paid in excess, in respect of which refund is sought for, is accounted as expenditure, even then refund shall not be hit by mischief unjust enrichment. He submits that excess duty paid was not passed on to the customer, the duty was paid in the transaction of goods from factory to the depot. However correct value was charged from the depot sale to the customer therefore incidence of excess paid duty was not passed on to the customer. He submits that appellant has produced Chartered Accountant Certificate to this effect and therefore it has been proved that the appellant has not passed on incidence of duty, for which refund is sought for, to any other person. He further submits that subsequent to the passing of order by the original authority as well as the Commissioner(Appeals) the appellant have revised their return/balance sheet for all the financial years and accordingly the amount of refund has been shown as receivable under the head of Loans and Advances in the assets side of balance sheet. In this support, Ld. Counsel has submitted copies of balance sheet for the year ended 31st March 2009, 31st March 2010, 31st March 2012, 31st March, 2013 and 31st Mar 2014. It is his submission that even if it is considered that booking of amount under expenditure will tantamount to passing of incidence of such duty to any other person but since, balance sheet have been revised and amount of refund have been shown as receivable the appellant is legally entitled for refund and the same will not be hit by the provision of unjust enrichment.
3. Shri. Sanjay Hasija, Ld. Superintendent(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He also submits that appellant has admittedly booked the amount of refund under head of expenditure in the profit and loss account. It is his submission that once the amount is booked under expenditure, it shall stand absorbed in the total sale value and accordingly incidence of such amount shall stand passed on to the persons whom entire sale were made. Therefore this position is sufficient to prove that incidence of duty, for which the refund is sought for, has been passed on. Accordingly, lower authorities have correctly held that appellant could not prove that incidence of refund amount has not been passed on to any other person and therefore rightly rejected the refund claim. As regard the revised balance sheet, he submits that same have not been produced ever before the lower authorities therefore the same cannot be accepted at this stage.
4. I have carefully considered the submissions made by both sides and perused records.
5. It is undisputed fact that amount for which refund is sought for is towards the excess payment of duty and was booked by the appellant as expenditure in the profit and loss account, it clearly shows that incidence of duty has been passed on to the person whom the appellant made sale during the relevant period. However, as submitted by the Ld. Counsel that the appellant have revised the balance sheet and in the revised balance sheet they have shown refund amount as receivable under the head of loans and advances in the balance sheet. If the revised balance sheet for the entire period are found correct and if the same has been audited or if the appellant produced evidence of acknowledgement of such revised balance sheet to the concerned Income Tax authority then refund claim of the appellant shall not be hit by unjust enrichment. Since revised balance sheet have not been produced either before the original authority or before the Ld. Commissioner(Appeals) the matter requires to be remanded to original adjudicating authority.
5.1 I therefore remand the matter to the original adjudicating authority. The original adjudicating authority shall verify the veracity/genuiness of the revised balance sheet and after ensuring the correctness if the amount of refund has been shown in the revised balance sheet as receivable under the Loans and Advances the refund can be sanctioned. Since the matter is very old the adjudicating authority is directed to dispose of the denovo adjudication within the period of three months from the date of receipt of this order. Needless to say that appellant shall be given sufficient opportunity for hearing, presenting their case and filing necessary documents. The appeal is disposed of by way of remand in the above terms.
(Operative part pronounced in court)
Ramesh Nair Member (Judicial) sk
5
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