The Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) allowed the cash refund claim based on Chartered Accountant‘s certification and books of account reflecting excise duty as refundable.
The Appellant M/s Creative Construction, was engaged in the manufacture of Ready Mix Concrete1 classifiable under Chapter Sub-heading No.38245010 of the Schedule to the Central Excise Tariff Act, 1985. The Appellant received Work Order dated 07.07.2007 from Kapstone Construction Pvt. Ltd. for supply of RMC. The RMC plant was set up by the Appellant on the land provided by Kapstone at their construction site. RMC manufactured by the Appellant at the site is either cleared to Kapstone or to the third parties. For supply of RMC, first preference is to be given to Kapstone.
The benefit of Notification No.4/2006-CE dated 01.03.2006 is available only when RMC is manufactured at the construction site for use in construction work whereas in the case of the Appellant, there is no evidence to show that the goods in question were manufactured and used at the construction site.
The Adjudicating Authority rejected a refund claim of Rs.2, 44,076/-, on the ground that the refund is barred by limitation. In respect of balance refund of Rs.11, 21,797/- the Adjudicating Authority had allowed the benefit of Notification No.4/2006-CE dated 01.03.2006 to the Appellant and allowed refund claim of the Appellant. However, the refund amount so allowed was credited to the Consumer Welfare Fund under Section 11B (2) on the ground that the Appellant has not proved that burden of excise duty has not been passed on to the buyer i.e., Kapstone. Therefore, the issue regarding admissibility of benefit of Notification No.4/2006-CE to the Appellant decided in favour of the Appellant. The Appellant challenged the refund claim to the extent of Rs.11,21,797/- only before the Commissioner (Appeals) and did not challenge the balance refund claim of Rs.2,44,076/-.
It was also pertinent to note that the Revenue did not challenge the Order-in-Original to the extent it holds that exemption under Notification No.4/2006-CE dated 01.03.2006 is available to the Appellant in respect of RMC cleared to Kapstone. Therefore, the only issue to be decided by the Commissioner (Appeals) was whether refund of Rs.11,21,797/- is hit by the bar of unjust enrichment or not.
The bench found that in terms of Section 11B (2), the refund amount can be credited to the Consumer Welfare Fund only when refund is admissible on merits, but the assessee has failed to show that the incidence of duty has not been passed on to any other person. In the present case, undisputedly, the RMC is manufactured at the plant situated at the construction site of Kapstone. Further, the RMC manufactured by the Appellant is supplied to Kapstone and Kapstone uses the said RMC for construction at the work site. Therefore, the condition of Notification No.4/2006 is satisfied in the present case and benefit of the same is correctly allowed to the Appellant by the Adjudicating Authority.
Further, the Appellant has submitted copies of their audited final accounts along with certificate issued by their Chartered Accountant. These documents indicate that the excise duty paid by the assessee was kept as “excise duty refundable or current assets” in Schedule 1 of their books of accounts. This documentary evidence was not rebutRefund Policyted by the Lower Authorities as an effective rebuttal of the presumption that the entire duty burden had been passed on to the buyers at the time of clearance of goods. It is submitted that the factual situation was clear from the contemporary accounts and the certificate issued by the Chartered Accountant.
The single member bench of the tribunal comprising P.K Choudhary (Judicial member) found that the tribunal in the case of M/s Pride Foramer vs. Commissioner of Customs (Import), Mumbai, accepted the Chartered Accountant’s certificate as rebuttal of the presumption that duty burden had been passed on to the buyer and, accordingly, the Original Authority was directed to withdraw duty amount from the Consumer Welfare Fund and refund the same to the party. In the present case, it is not in dispute that the Chartered Accountant’s certificate and books of accounts for the period of dispute were produced by the assessee to show that the excise duty was retained as “excise duty refundable”.
CESTAT held that presumption of unjust enrichment under Section 12B of the Central Excise Act was successfully rebutted by the assessee. In the result, the claim for cash refund of the excise duty required to be allowed. It was ordered accordingly. The appeal stands allowed.
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