Customs, Excise and Service Tax Appellate Tribunal

Neel Metal Products Ltd vs. Commissioner, CGST

MANU/CE/0227/2022

04.07.2022

Excise

Once it is proved that, debit/credit note have been acted upon and the incidence of duty earlier passed on, have been neutralised, refund would be admissible

The issue in present appeal is whether the refund claim filed by the Appellant for excess duty paid due to price revision with retrospective effect, whether the same have been rightly rejected on the ground of unjust enrichment.

The Appellant is a manufacturer of automotive parts and supply their finished goods to Hero Motor Corp Ltd. SCN was issued with proposal to reject the refund. The SCN was adjudicated on contest and the refund claim was rejected holding that the same was hit by unjust enrichment, vide Order-in-Original.

Tribunal in CCE, Raipur Vs. IBP Ltd. held that the presumption that the incidence of duty has been passed on to the customer, once the amount of duty has been reflected in the sales invoice, definitely there is presumption that the incidence of duty has been passed on to the customer. However, this presumption is a rebuttable presumption and once the assessee produces sufficient evidence in the form of debit/credit notes or any other evidence, the burden shifts on the Department, and it is for the Department to prove that the credit note is bogus or have not been acted upon. Once it is proved that the debit/credit note have been acted upon and the incidence of duty earlier passed on, have been neutralised, the refund would be admissible.

There is no real dispute with respect to the facts and circumstances. In the course of hearing before the Tribunal, the learned Counsel for the Appellant have reconciled the said debit note and its breakup with the invoices, as well as the detailed chart annexed to the appeal paper book. There is no good reason to doubt the transaction between the Appellant and their buyer Hero Motor Corp Ltd. Hero Motor Corp Ltd, Haridwar Unit, to which the goods have been supplied is operating under 'Area Based exemption' during the relevant period. Thus, there is no chance of Hero Motor Corp having taken Cenvat credit and utilised the same.

There is no doubt as to genuineness of the transaction as well as the debit note in question issued by Hero Motor Corp Ltd, and accepted by the Appellant-assessee. Adequate entries have been made by the appellant in the Books of Accounts and they have credited the account of Hero Motor Corp. Further, the amount of refund claim have been shown as duty recoverable from the revenue in the Books of Accounts and the financial statements of the appellant being balance-sheet. Impugned order is set aside. Appeal allowed.

Tags : Duty Refund Entitlement

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