Whether Press Reporters May Be Allowed ... vs Commissioner Of Central Excise, Mysore

[Arising out of Order-in-Appeal No. 06/2012 dated 03/01/2012 passed by Commissioner of Central Excise (Appeals), Mangalore]

For approval and signature:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes M/s STEEL AUTHORITY OF INDIA LTD. VISVESVARAYA IRON & STEEL PLANT, BHADRAVATHI-577301. Appellant(s) Versus Commissioner of Central Excise, MYSORE S1-S2, VINAYA MARGA, SIDDHARTHA NAGAR, MYSORE  570011. Respondent(s)

Appearance:

Mr. M.S. Nagaraja, Advocate T. RAJESWARA SASTRY & ASSOCIATAES. # 48, 11TH MAIN, BANASHANKARI, 2ND STAGE, BANGALORE - 560070 For the Appellant Mr. N. Jagdish, A. R. For the Respondent

Date of Hearing: 09/07/2015 Date of Decision: 09/07/2015 CORAM :

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER

Final Order No. 21533 / 2015

Appellant is engaged in the manufacture of various Iron and Steel items and procured a Purchase Order from the Ministry of Railways for supply of various steel products at the price reflected in the said purchase order. The price was inclusive of Excise duty required to be paid by the appellant. However, the appellant cleared their final products on payment of Excise duty by treating the entire contractive price as assessable value. The said resulted in excess payment of duty.

2. Subsequently, within the limitation period, they filed a refund claim of excess duty of Rs. 35,681/-. The Assistant Commissioner, after taking into consideration the entire facts agreed with the appellant and sanctioned the said refund claim of Rs. 35,681/-. He also considered the issue of unjust enrichment and held inasmuch as the credit note stands issued by the appellant to the Ministry of Railways, the same wipe out the unjust enrichment.

3. Being aggrieved with the said order of the Commissioner, the Revenue filed an appeal before the Commissioner (Appeals). The appellate authority accepted the Revenues stands that passing of the credit notes subsequent to the clearance of the goods would not be a criteria for holding that the refund is hit by unjust enrichment. Accordingly, he set aside the impugned order and allowed the Revenues appeal.

Hence the present appeal.

4. After hearing both the sides duly represented by Shri M.S. Nagaraja, learned advocate appearing for the appellant and Shri N. Jagdish, learned A.R. appearing for the Revenue, I find that there is no dispute on merits of the case or as regards the limitation. The only dispute relates to the unjust enrichment principles. The fact of the appellant having raised the credit notes to the Ministry of Railway is also not being disputed. As such, the sole issue is as to whether raising of credit notes after the clearance of the goods would hit the principles of unjust enrichment or not.

5. I find that the Honble Karnataka of High Court in the case of Sudhir Papers Ltd. vs. CCE, Bangalore-I [2012 (276) E.L.T. 304 (Kar.)] has held that the fact that the credit notes were raised subsequent to the clearance of the final products are sufficient proof to show that the assessee has not passed on the benefit to its customer and thus no passing of burden of excess duty and is entitled to refund of the same. To the similar effect is another decision of the Honble High Court of Karnataka in the case of Commissioner of Central Excise, Bangalore-II Vs. Mysore Electrical Industries Ltd. [2011 (267) E.L.T. 607 (Kar.)]. The Honble High Court of Rajasthan in the case of Union of India Vs. A.K. Spintex Ltd. [2009 (234) E.L.T. 41 (Raj.) has also observed that the excess duty paid by an assessee stands credited to the buyers by way of issuance of credit note and as such refund of the same cannot be rejected on the ground of unjust enrichment.

6. Inasmuch as the issue is settled in favour of the assessee, I set aside the impugned order of the Commissioner (Appeals), restore the order of the original adjudicating authority and allow the appeal with consequential relief.

(Pronounced in open court)

(ARCHANA WADHWA) JUDICIAL MEMBER /vc/