Judgment:
P. KARTHIKEYAN
The appellants are job workers engaged in textile processing. They worked under the compounded levy scheme and paid duty on the basis of Annual Capacity of Production (ACP) determined by the Commissioner. They successfully challenged the ACP fixed by the Commissioner and got their monthly liability reduced. They claimed refund of the excess duty they had paid when the ACP initially fixed by the Commissioner was the basis for payment of duty, as per the following details.
The orders impugned in appeals sanctioned the refund and credited the same in the Consumer Welfare Fund. The lower authorities found that the appellants had failed to substantiate that the excess duty paid by them had not been passed on to their customers. The lower appellate authority found that the appellants had placed reliance on various judicial authorities which had held that the assessee could not be held to have passed on the excess duty when the price before and after the duty liability was changed remained uniform. He relied on the judgment of the apex Court in the case of Allied Photographic (India) Ltd case reported in 2004 (116) ELT 3 (SC) to hold that uniformity in price before and after the revision in assessment did not lead to the inevitable conclusion that incidence of duty had not been passed on to the buyer; such uniformity could be due to various factors.
2. Ld. Counsel for the appellants relied on the following decisions of the Tribunal in support of the appeals.
i) CE, Bangalore Vs. Bangalore Textiles P Ltd 2005 (179) ELT 494 (Tri.Bng)
ii). Janson Textile Process ors Vs. CCE, SalemFinal Order No.1215/08 dtg.24.10.08 (Chenai-Bench)
iii). Dhariwal Industries Ltd. Vs. CCE, Vadodara 2005 (189) ELT 425 (Tri.Mum)
Ld. JCDR relied on the following case law and argued that the appellants had failed to establish that the amounts involved in the refund claims had not been passed on by the respective parties to their customers.
i). Elgi Tread India Ltd. Vs. CCE 2005 (192) ELT 712 (Tri.chen)
ii). J.C.T Ltd. Vs. CCE 2006 (202) ELT 773 (P and H)
iv). Sonal Vyapar Ltd. Vs. CCE, Salem Final Order No.945/06 dt.11.10.06 Tri.Chen.
3. We have carefully considered the case records and the submissions made by both sides. Section 12B of the Central Excise Act reads as follows:-
Section 12B. Presumption that the incidence of duty. has been passed on to the buyer. Every person who has paid the duty of excise on any goods under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such duty to the buyer of such goods. In terms of these provisions it is imperative that the appellants establish that the excess duty paid and claimed as refund has not been passed on to their customers to qualify for refund. The case of the appellants is that they did not manufacture and sell any goods; they processed textiles on job work basis and collected job charges which were not periodically varied. However, the onus cast on the assessees under Section 12B of the Act has been sought to be discharged on the ground that the job charges remained constant before and after the revision of the ACP by the Commissioner.
3.1 We have examined the case law cited by ld. Counsel for the appellants. In the CCE Vs. Bangalore Textiles Private Ltd case (supra), the assessee had processed fabrics under a contract which had shown the break-up including duty. This contract had continued unchanged also after extra duty was charged. The Tribunal held that excess duty was not passed on. In Janson Textile Processors (supra) the Tribunal concluded that when the job-charges remained constant over a long time including a brief interregnum, when excess duty was paid, it was more reasonable to infer that the excess duty was not passed on. In Datival Industries case (supra) the appellants therein were able to satisfy the Tribunal that they had absorbed incidence of increased duty by changing the structure of the constant composite price.
3.2 As the appellants operated under the compounded levy scheme and they collected a composite amount towards job charges, duty paying documents do not indicate the duty element. Assessees could not establish their case that they had not passed on excess duty paid, with the help of these documents. On the other hand these documents carried the endorsement that they had paid the arrears of duty demanded by the authorities. The alternative course open to them to discharge the burden cast on them u/s 12B of the Act probably was with reference to their accounts; the structure of the composite price and how they had accounted the proceeds in the material period. This, strangely, the assessee has not attempted. Only ground canvassed to claim refund is that the charges remained uniform before and after the change in the liability of the assessee. In the Allied Photographic India Pvt. Lt case, the apex Court held that constancy of price of final goods of the assessee did not inevitably lead to the conclusion that the enhanced duty had been absorbed by the assessee. In view of this ratio we hold that the lower authority correctly held that grant of the impugned refund claims would entail unjust enrichment of the assessees. In the circumstances we uphold the impugned orders and reject these appeals.