Judgment:
S.S. Kang
1. Heard both sides.
2. Applicant filed this application for waiver of pre-deposit of duty of Rs 63,42,833/-, interest and penalty.
3. The demand is confirmed after finalization of the provisional assessments for the period in dispute.
4. Against the adjudication order, whereby the demand is confirmed with interest, the appellant filed appeal before the Commissioner (Appeals) alongwith the application for waiver of pre-deposit of the dues. The Commissioner (Appeals) directed the appellant to deposit 50% of the confirmed demand for hearing of the appeal. As the appellant had not complied with the conditions of the stay order passed by the Commissioner (Appeals), the appeal was dismissed for non-compliance with the provisions of Section 35F of the Central Excise Act, 1944.
5. The learned senior counsel appearing on behalf of the applicant submitted that there is an excess payment of Rs. 65,37,723/- in pursuance of the finalization of the provisional assessments and there is also a short-payment of Rs 63,42,833/-. The contention is that the excess payment has not been adjusted against the demand on the ground that the burden of duty has not been passed on. The contention is that in the present case, there is no unjust enrichment since the discount is given in the invoice at the time of sale when the goods were cleared from the depot. As the discount is given in the invoice itself, it cannot be said that burden of duty has not been passed on.
6. Applicant submitted that the demand is confirmed after taking into consideration the provisions of Rule 10A of the Central Excise Valuation (Determination of price of excisable goods) Rules, 2000 which provides where the goods are not sold by the principal manufacturer at the time of removal of goods from the factory of the job worker but the goods were transferred to some other place from where the said goods are to be sold after the clearance from the factory of job worker and where the principal manufacturer and buyer of the goods are not related and the price is the sole consideration for the sale, the value of the excisable goods shall be the normal transaction value of such goods sold from such other place at or about the same time and, where such goods are not sold at or about the same time, at the time nearest to the time of removal of said goods from the factory of job worker. The contention is that on facts and circumstances of the present case, Rule 10A is not applicable. In fact the goods were cleared on principal to principal basis. Therefore, the applicants are liable to pay duty as per the principles laid down by the Hon’ble High Court in the case of M/s Ujjagar Prints reported in 1988 (38) ELT 535 (SC). If the demand for the duty is calculated on the basis of the above decision of the Hon’ble Supreme Court, there is no demand.
7. The contention of the Revenue is that the provisional assessments are finalized after taking into consideration of Rule 10A of the Central Excise Valuation (Determination of price of excisable goods) Rules, 2000 and the same was done after giving ample opportunity of hearing to the appellant. Before the adjudicating authority the appellant has not challenged that the provisions of Rule 10A of the Central Excise Valuation Rules, 2000 are not applicable. Even before the Commissioner (Appeals), there is no such ground raised. This issue is raised for the first time in the present appeal. The contention is that as the assessments were finalized and there is a short payment, applicants are liable to pay the duty confirmed.
8. Revenue relies upon the decision of the Larger Bench of the Tribunal in the case of Excel Rubber reported in 2011 (268) ELT 419 (Tri-LB).
9. Revenue also submitted that the refund of duty is subject to the principles of unjust enrichment and the adjudicating authority in the adjudication order specifically held that the applicants had not produced any evidence in this regard.
10. We find that in this case the demand is confirmed after finalization of the provisional assessments. The issue raised now that the provisions of Rule 10A of the Central Excise Valuation (Determination of price of excisable goods) Rules, 2000 are not applicable on the facts and circumstances of the case were not raised before the adjudicating authority or before the Commissioner (Appeals). As the adjudicating authority in the impugned order held that in respect of the excess payment of duty, applicants had not produced any evidence that the burden of duty has not been passed on. Therefore, prima facie we find that it is not a fit case for total waiver of the dues. However, taking into the facts and circumstances of the case, the applicants are directed to deposit Rs 6,30,000/- within a period of four weeks. On deposit of the above mentioned amount, pre-deposit of the remaining dues is waived and recovery stayed during the pendency of the appeal.
11. As noted above, the Commissioner (Appeals) has not decided the appeal on merits, and dismissed the appeal for non-compliance with the provisions of Rule 35F of the Central Excise Act, 1944, the impugned order is set aside and the matter is remanded to the Commissioner (Appeals) to decide the case on merits on showing deposit of the above mentioned amount after affording the opportunity of personal hearing to the appellant.
12. Appeal is allowed by way of remand.