Case Law Details
Chennai Petroleum Corporation Ltd. Vs Commissioner of GST & Central Excise (Madras High Court)
(a) The scheme of the Act contained in Section 11B of the Act read with other relevant provisions of the Central Excise Act as it then prevailed before the introduction of GST regime with effect from 1 July 2017, with regard to refunds is very clear viz., that it is only the person who has borne the incidence of Excise Duty, which was not leviable in law is entitled to claim refund of the same, subject to his locus standi and the limitation prescribed in Section 11B of the Act. The law on the said issue was propounded beyond the pale of doubt by the Constitution Bench of the Hon’ble Supreme Court in the case of Mafatlal Industries Ltd. (supra). The said judgment has been correctly applied, with great respects, by the Hon’ble Supreme Court in the case of Addison and Co.Ltd., (supra). There is hardly any doubt on facts in the present case, where, admittedly, the invoice of the appellant for the supply of raw naptha which is a dutiable product, was raised by the appellant M/s.CPCL on its marketing company M/s.IOCL, which is a separate company, who in turn raised invoice on the purchaser or buyer of the said raw naptha M/s.PPN, who in turn, manufactured power by use of such raw naptha and other raw materials. If at all, duty can be said to have been collected in excess on account of over valuation of the supplies, it is the consumer of the said raw material/raw naptha, viz., M/s.PPN who could have claimed the refund of Excise Duty as per the settled legal position. Merely because M/s.IOCL issued a credit note to the buyer M/s.PPN, it cannot be said that the incidence of Excise Duty was not passed on to the purchaser M/s.PPN. Once the incidence of Excise Duty has been passed on, whether it is further passed on to the ultimate buyer or consumer or not, is not the relevant question. The appellant Assessee M/s.CPCL, cannot be said to have borne any incidence of Excise Duty illegally levied and therefore, the right of the appellant Assessee to claim any refund cannot arise. The law in this regard of unjust enrichment has been settled as aforesaid, beyond pale of doubt, by the Constitution Bench Judgment of the Hon’ble Supreme Court in the case of Mafatlal Industries Ltd., reiterated and followed by the Hon’ble Supreme Court in the case of Addison & Co.Ltd., wherein the contentions which are now raised before us and almost similar contentions having been raised there, have been negatived by the Hon’ble Supreme Court, reversing the decision of the Division Bench of the Madras High Court, vide paragraph 18 quoted above.
(b) The question raised before us relates to question of locus standi of the person who is claiming the refund and not on what basis it is claimed. Whether on the basis of Credit Note issued by M/s.IOCL, a refund of Excise Duty could be made or not is not the question, and the claim of the Assessee is not fortified merely because the show cause notice refuted the claim of the Assessee on the basis of credit note alone. Therefore, viewed from that angle, even if the contention of the learned Counsel for the Assessee was to be considered that on the basis of Credit Notes issued in the cases of Addison Co. Ltd. or Bombay Tyre International Pvt. Ltd. (supra), that on the basis of Credit Notes issued for Trade discounts, which is an established trade practice, such refund could be claimed. No such situation is available, factually before us. The facts before us are clear and undisputed and there is no material or facts available on record which even prima facie could indicate that the appellant Assessee has borne the incidence of Excise Duty which in law could not be charged from it. The moment it raised the invoice on M/s.IOCL and M/s.IOCL issued Invoice on M/s. PPN, the incidence of Excise Duty is definitely passed on to the buyer or consumer of raw naptha, viz., M/s.PPN. Therefore, the right to claim refund by the Appellant M/s.CPCL is completely lost.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
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