Customs, Excise & Service 

Tax Appellate Tribunal West Zonal

Bench At Ahmedabad

REGIONAL BENCH- COURT NO.3

Excise Appeal No.12933 of 2013

(Arising out of OIA-67-69/2013/BVR/SKS/COMMR-A/AHD dated 30/05/2013 passed by Commissioner of Central Excise-BHAVNAGAR)

 

Makson Foods Pvt Ltd

VERSUS

C.C.E. & S.T.-Bhavnagar

WITH

Excise Appeal No.12934 of 2013

(Arising out of OIA-67-69/2013/BVR/SKS/COMMR-A/AHD dated 30/05/2013 passed by Commissioner of Central Excise-BHAVNAGAR)

Makson Confectionary Appellant

Rajkot Highway Road, Surendranagar, Gujarat

VERSUS

C.C.E. & S.T.-Bhavnagar …….Respondent

Plot No.6776/B-1…Siddhi Sadan, Narayan Upadhyay Marg, Beside Gandhi Clinic, Near Parimial Chowk,

Bhavnagar, Gujarat-364001

AND

 

Excise Appeal No.12935 of 2013

(Arising out of OIA-67-69/2013/BVR/SKS/COMMR-A/AHD dated 30/05/2013 passed by Commissioner of Central Excise-BHAVNAGAR)

Makson Pharmaceuticals Pvt Ltd Appellant

Rajkot Highway Road, Surendranagar, Gujarat

VERSUS

C.C.E. & S.T.-Bhavnagar …….Respondent

Plot No.6776/B-1…Siddhi Sadan, Narayan Upadhyay Marg, Beside Gandhi Clinic, Near Parimial Chowk,

Bhavnagar, Gujarat-364001

APPEARANCE:

Shri B.L. Narasimhan & Shri Ishan Bhatt, Advocates for the Assessee Shri Tara Prakash, Deputy Commissioner (AR) for the Revenue

 

CORAM: HON’BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON’BLE MEMBER (TECHNICAL), MR. C.L. MAHAR

 

Final Order No. A/ 11109-11111 /2023

 

 

 

 

RAMESH NAIR

DATE OF HEARING: 13.03.2023 DATE OF DECISION: 03.05.2023

 

 

The issue involved in the present case is that whether the appellant’s refund claim in respect of duty paid under protest is hit by mischief of unjust enrichment in terms of Section 11B of Central Excise Act, 1944.

1. The brief facts of the case are that the appellant are interalia engaged in the manufacture of sugar confectionary falling under Chapter sub heading 1704.90 of the Central Excise Tariff Act, 1985. The appellant are job worker of M/s. Nestle India Limited and are manufacturing sugar confectionary on behalf of M/s. Nestle India Limited. Sugar confectionaries so manufactured are cleared on payment of excise duty to M/s. Nestle India Limited. There was ongoing dispute between the appellant and the revenue that whether the valuation of the sugar confectionary should be determined in terms of Section 4 as claimed by the appellant or under Section 4A as claimed by the revenue. The appellant had paid duty under protest in terms of Section 4A. Subsequently, the issue of valuation came to the rest as per this tribunal’s order vide Final Order No. A/218-227/WZB/06-C-II dated 25.01.2006 which was upheld by the Hon’ble Apex Court reported at 2010 (259) ELT 5 (SC). Consequent to the judgment of hon’ble Supreme Court, the appellant filed a refund claim for the differential duty paid between the duty payable under Section 4 and Section 4A. The said refund claim was rejected by the adjudicating authority on the ground of unjust enrichment, the same was upheld by the order of the Commissioner (Appeals) in the impugned order therefore, the present appeals.

 

2. Shri B.L. Narasimhan with Shri Ishan Bhatt, learned counsel appearing on behalf of the appellant submits that firstly the duty was paid under protest. The price of the confectionary was remained same even though the duty was paid under Section 4A instead of Section 4 therefore, the duty for which the refund is sought for was borne by the appellant hence, burden of duty was not passed on to any other person consequently, the adjudicating authority could not have rejected the claim on the ground of unjust enrichment. He placed reliance on thefollowing judgments:-

 

• AMADALAVALASACOOPERATIVE SUGARS LTD  CCE- 2007 (219) ELT 526 (TRI.-BANG.)
• SOUTHERNREFINERIES – 2006 (199) ELT 334 (TRI.-BANG.)
• SWARUPFIBRE INDUSTRIES – 2000 (120) ELT 510 (TRI.)
• CCE DHARIWAL INDUSTRIES LTD.- 2014 (303) ELT 496 (GUJ.)
• CCE, HYDERABAD VS. KUMAR METALLURGICAL CORPORATION LTD.- 2008 (221) ELT 519 (TRI.-BANG.)
• DEWOSOFTOVERSEAS  LTD.V CCE, NEW DELHI- 2019 (6) TMI 904-CESTAT NEW DELHI
• UNION OF INDIA VS. NG THAKKAR & SONS- 2012-TIOL-280-HC-MUM- CX
• GANESHENTERPRISES  CCE, AHMEDABAD- 2009 (240) ELT 106 (TRI. AHD.)

 

3. Shri Tara Prakash, learned Deputy Commissioner (AR) appearing on behalf of the revenue reiterates the finding of the impugned order.

 

4. We have carefully considered the submissions made by both the sides and perused the records. We find that the fact is not under dispute that the appellant have paid duty under Section 4A under protest. The MRP of the goods remained same however, even though the duty was paid underprotest the appellant have not shown the differential duty as receivable in their books of account and the same was admittedly booked under expenditure. The appellant have shown excise duty in their invoice while clearing the goods from the factory which clearly shows that the duty was paid by the appellant even though under protest is not integral part of the total sale value and thus the excise duty so paid was collected from their customer. Whether the MRP stand unchanged is commercial decision of the appellant but so long as the excise duty paid by the appellant is a part and parcel of the sale price of the goods, it clearly shows that the duty paid by the appellant was passed on to their customers even if the duty was paid under protest. Merely, for this reason it cannot be said that the unjust enrichment is not applicable. For the purpose of unjust enrichment, the only fact to be ascertained is that whether the duty paid by the assessee irrespective of under protest or otherwise was passed on to any other person. In the present case, the appellant have admittedly shown excise duty in the sale price and the total value of the invoice which includes the duty has been collected. There is a clear passing of the burden of such excise duty to their customers accordingly, the  duty became part of the

 

total sale value which was realized by the appellant. Since the duty was realized by their customer, the appellant could not have even shown as receivable in their books of account and that is the reason they have not booked this excise duty paid under protest under the head of ‘loans and advances’ in their balance sheet. The unjust enrichment would not apply in a case where on payment of duty if the same is not passed on to any other person and booked under loans and advances as receivables which clearly shows that the assessee only has borne the burden of such duty which in other words the burden of the same was not passed on to any other person which is not the case in the present matter.

4.1 The Hon’ble Supreme Court in the case of MAFATLAL INDUSTRIES- 1997 (98) ELT 247 (S.C.) has categorically held that for refund of duty, the test of unjust enrichment has to be undergone. The judgment by the Hon’ble Supreme Court in the case of MAFATLAL INDUSTRIES- 1997 (98) ELT 247 (S.C.) shall prevail over the judgments cited by the appellant accordingly, we are of the view that in the facts and circumstances of the present case, first the unjust enrichment is clearly applicable and the appellant could not discharge the burden which is statutorily casted upon them to establish that the incidence of duty for which the refund was claimed has not been passed on to any other person.

5. Accordingly, we are of the view that the refund claim was rightly rejected on the ground of unjust enrichment hence, the impugned order is upheld and appeals are dismissed.

(Pronounced in the open court on 03.05.2023)

 

(RAMESH NAIR) MEMBER (JUDICIAL)

 

(C.L. MAHAR) MEMBER (TECHNICAL)