CESTAT, AHMEDABAD BENCH
Commissioner of Central Excise, Vadodara
Apollo Tyres Ltd.
ORDER NO. A/1011/WZB/AHD OF 2012
APPEAL NO. E/43 OF 2011
JUNE 29, 2012
1. The respondent has supplied 1125 nos. of tyres against the purchase order issued by the Commandant, Central Ordnance Depot, Mumbai during the period from 11.06.2008 to 14.06.2008. The rate quoted in the purchase order was Rs. 7,700/- plus excise duty plus VAT per tyre. But the respondent had charged @ Rs. 8,742/- per tyre plus excise duty plus VAT. After noticing that the cost of tyre was more than what was mentioned in the purchase order, the respondent issued Credit Note to the purchaser for the differential amount and submitted a refund claim for the excise duty of Rs. 1,69,308/- paid in excess at the time of clearance.
2. In the proceedings before the first appellate authority, contention that the tyres were purchased by Commandant, Central Ordinance Depot, Mumbai who could not have taken Cenvat Credit and could not have sold the tyres to somebody else and that the purchaser never paid the amount more than what was agreed to was accepted and the first appellate authority held that respondent is eligible for refund. The revenue is in appeal against the decision.
3. Heard both sides.
4. The learned A.R. on behalf of Revenue submitted that merely because a Credit Note is issued and excise duty was paid, the refund claim cannot be accepted. What is relevant is the price shown in the Invoice and the excise duty charged thereon and once the duty liability is shown in the invoice, the purchaser after receiving the credit note still may be able to pass on the duty liability subsequently or take Cenvat Credit and therefore just because a Credit Note is issued the refund claim cannot be considered. He referred to the provisions under section 11B of Central Excise Act, 1944 and submitted that for granting refund to the claimant, the claimant has to satisfy that duty liability has not been passed on to “any other person” and not merely the immediate purchaser. He relies upon the decision of the Tribunal in the case of Sangam Processors (Bhilwara) Ltd. v. Collector of Central Excise 1994 (71) ELT 989 (Tri. – Delhi) and submits that this has been upheld by the Hon’ble Supreme Court on an appeal filed before them. Therefore, he submits that in view of the law settled by the Supreme Court, on the ground that the appellant have issued a credit note, the refund claim could not have been allowed.
5. The learned counsel for the respondent while agreeing with submission of the learned A.R. submits that in this case the refund claim has been allowed by the first appellate authority on merit and after taking note of the fact that central excise duty has not been passed on to any other person. He submits that it is quite clear that Central Ordnance Depot would not have taken Cenvat Credit nor would have sold the tyres to someone else and therefore the decision of the Commissioner (Appeals) is not contrary to the law as submitted by the learned A.R.
6. After hearing submissions made by both sides as mentioned above, I find myself in agreement with the submissions of the learned counsel for the respondent. It is quite clear that the claimant has to show that the burden of excise duty has not been passed on to any other person and not only to the buyers. In this case, the purchaser being the defence organisation of Government of India, the question of passing on the excise duty to any other person does not arise and ordnance depot not being a manufacturer of any goods, could not have taken Cenvat Credit also and further the Commandant also certified that they have not taken Cenvat Credit nor they have paid excise duty to the appellant for differential value shown in the invoice. Thus the impugned order is in line with the statutory provisions and as per law. Therefore I find no merits in the appeal filed by the revenue and reject the same.