The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the rejection of refund claims as the burden of payment of excise duty passed on to customers.
As the revenue was of the view that the products would be appropriately be classifiable under Chapter Heading 3305 instead of 3003. Accordingly, a show cause notice was issued and Commissioner, Central Excise, Lucknow adjudicated the case under Order-in-Original No. 9/99 dated 29.10.1999, holding the goods to be classifiable under heading 3305.
Subsequent to the decision of the Apex Court, Appellant filed a refund claim of the above referred amount deposited on 10.02.2005. A Show Cause Notice dated 18.10.2006 was issued to them asking them to show cause as to why their refund application claiming Rs 5,51,739/- (Rupees Five Lakhs Fifty-One Thousand Seven Hundred and Thirty Nine only) should not be rejected on the ground of unjust enrichment and the amount otherwise liable for refund should not be credited to Consumer Welfare Fund.
The Assistant Commissioner, adjudicated the show cause notice, thereby rejecting the Excise Appeal claim of refund on grounds that the invoices raised by the Appellant between 11.09.2003 to 30.01.2004 clearly show that the Central Excise Duty @ 16% separately was charged from the customers/buyers.
The counsel for the appellant submitted that the amount otherwise eligible for refund under Section 11B of the Central Excise Act should not be transferred to the Consumer Welfare Fund under Section 12C of the Central Excise Act as there is no unjust enrichment and the incidence has been absorbed by the Appellant. This is against the principles of natural justice and the impugned order should be set aside. The findings of the Commissioner (Appeal) are not proper, reasonable and correct.
A Division Bench of Justices PK Choudhary, Judicial Member and Sanjiv Srivastava, Technical Member observed that “Thus if on examination of facts and documents the conclusion is that burden of the duty has been passed on to the customers the refund could not have been directed to the appellants but would have to be credited to the consumer welfare fund. In view of the discussions as above, we do not find any merits in this appeal.”
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