COMMISSIONER OF CENTRAL EXCISE, AURANGABAD COMMISSIONERATE, OFFICE OF THE COMMISSIONER Vs. TOYOTA KIRLOSKAR MOTORS LTD.

JUDGEMENT

(1.) THE revenue is in appeal assailing the order dated 28.2.2005 passed by the customs, Excise and service Tax Appellate Tribunal, south zonal Bench, Bangalore, in Final order No. 308/2005.

(2.) WE have heard Sri. C. Shashikantha, learned standing counsel for the appellant -revenue and Sri, K. S. Ravishankar, learned Counsel appearing for the respondent.

(3.) BRIEF facts of the case are as follows: a) Respondent is engaged in the Manufacture of excisable goods i.e. Passenger utility Vehicles and Parts thereof falling under Chapter 87 of the Central Excise Tariff Act, 1985. The Respondent purchases Tyres, Tubes and Flaps from M/s. South Asia Tyres Ltd., (for short "SATL") waluj, Aurangabad and avail Modvat Credit of the duty paid on such Tyres, Tubas and Flaps. prior to 1.3.2000 the entire duty i.e. the Basic duty specified under First Schedule as well as the Special Duty specified under the Second Schedule of the Central Excise Tariff Act, 1985, paid on the Tyres, Tubas and Flaps, was available as Modvat credit to the Respondent. However, consequent to amendment to Central Excise Rules with effect from 1.3.2000, credit of the Special duty paid on the inputs under the second schedule of the Central Excise Tariff Act, 1985 was not admissible. With effect from 1.3.2000 the rate of duty payable on Tyres, Tubes and Flaps was 16% Basic Duty specified under the First schedule and 16% special Duty specified under the second schedule of the central Excise Tariff Act, 1985. As per Notification No. 6/2000 -CE the duty payable under the Second Schedule of the Central Excise Tariff Act, 1985,. on Tyres, Tubes and Flaps was exempted, if used within the factory of production and the procedure under chapter x was prescribed when such use was in a place other than the factory of manufacture. b) The respondent filed an application on 1.3.2003 with the central Excise, Aurangabad II Division, for issue of CT -2 Certificate for procurement of Tyres & Tubes and for issue of registration Certificate under Rule 192 of Central Excise Rules, 1944. since there was delay in issue of CT -2 Certificate, SATL cleared the Tyres, Tubes and Flaps toy paying duty at the rate of 16% Basic duty specified under the First schedule and 16% special duty specified under the Second Schedule of the Central Excise Tariff Act, 1985. The CT -2 Certificate was, however issued to the respondents on 8.1.2001 and 5.3.2001. c) The respondent in their capacity as a buyer filed a Refund Claim of Rs. 60,77,117/ - on 12.3.2001 before Deputy commissioner, central Excise, Aurangabad II Division having jurisdiction aver factory of SATL, claiming refund of duty paid by SATL. A Show Cause Notice dated 8.5.2001 was issued to the respondent by the Deputy Commissioner, Central Excise, Aurangabad II Division, Aurangabad proposing to reject the said Refund Claim on the ground of non submission of end use Certificate and not producing evidence to establish that the incidence of duty has not been passed on to any other person. The appellant filed reply to the show Cause Notice. However, the Deputy commissioner, central Excise, Aurangabad vide his order in Original No. 112/RFD/2001 dated 12.6.2001, a true copy of which is produced herewith and marked as Annexure -A, rejected their Refund claim on the ground that the exemption under Notification No. 6/2000 -CE was not available as the procedure under Chapter X has not been followed and the respondent had not established that they had not passed on the incidence of duty to any other person. d) Being aggrieved by the O.I.O. No. 112/RFD/2001 dated 12.6.2001 passed by Deputy Commissioner, Central Excise, Aurangabad II Division, Aurangabad rejecting their Refund claim, the respondent preferred an appeal with the Commissioner (Appeals). The Commissioner (Appeals), Mumbai decided the matter vide O.I.A. No. SDK (1474)137/AUR/2002 dated 28.2.2002, a copy of which is produced herewith and marked as Annexure -B holding that respondent is entitled to the Refund, but the same cannot toe given to them as they had not shown that they have not passed on the duty burden to the buyers of the vehicles. e) The Tribunal accepted the contention of the assesses on the ground that respondent/assesses has sold its products under loss which was evidenced from the Chartered Accountant's certificate and thus incidence of duty has not been passed on to its customers by order dated 28.2.2005 in Order No. 308/2005. It is this order now questioned by the revenue in this appeal.