LAXMINARAYAN INDUSTRIES Vs. COMMISSIONER OF C. EX., SURAT

JUDGEMENT

(1.) THE brief facts of the case are that the appellants were engaged in the manufacture of CD -Audio/CD -Video, CD -ROM, CD interactive falling under Chapter 85 of the First Schedule to the Central Excise Tariff Act, 1985 and also engaged in the activity of replication of audio visual materials/softwarte/data/music. They got purchase orders from M/s. Sony Entertainment (India) Pvt. Ltd. (SME) for the manufacture of Video Compact Discs of songs, movies and cricket matches etc. Accordingly, they had cleared the goods after manufacture of CDs to them on payment of duty. However, later on they found that they paid excess Central Excise duty due to calculation mistake of percentage of royalty and therefore they adjusted the amount of excess paid Central Excise duty paid by them during the month of April to August, 2003 by way of issuing credit notes in the month of June to September, 2003 in the account of SME and subsequently filed refund claim of Rs. 6,79,632/ - on 9 -2 -2004 along with supporting documents showing that they had not passed on the amount of excess paid Central Excise duty to SME and thus the doctrine of unjust enrichment was not attracted. They were issued SCN proposing rejection of refund claim of Rs. 6,79,632/ - on the ground that transaction mentioned in the refund claim was between job worker and the manufacturer and they had not produced letter of the manufacturer i.e. SME for granting refund; that the incidence of duty has already been passed on to the customers of final product and the amount of duty was recovered as sale price of the final product. The Astt. Commissioner, Central Excise vide impugned order has rejected the refund claim of Rs. 6,79,632/ - on the above grounds by holding that none of the judgments relied upon the appellants were squarely applicable in this case in as much as these judgments does not deal with issuance of credit notes after clearance of goods through various invoices and pertains to excess payment of duty which is not the issue in the present case.

(2.) ON appeal against the above order, Commissioner (Appeals) observed as under : I have carefully gone through the facts of the case and submissions made by the appellants in their appeal memorandum as well as during the personal hearing, I find that the issue to be decided in the present case is when sale invoice mentioned total price including Central Excise duty charged to customer by the appellants whether post -clearance adjustment like issuance of credit notes by the appellants who is claiming refund, to buyer of the goods taking back the burden of duty on the goods would help the appellants to get over the bar of unjust enrichment under Section 11B of the Act. I find that the identical case has been decided by the Honble Larger Bench of Tribunal in case of S. Kumars Ltd. v. CCE, Indore - 2003 (153) E.L.T. 217 (Tri -LB) wherein they held that refund claim on the ground of post -clearance adjustment like issuance of credit notes by the assessee is hit by the principles of unjust enrichment. The same view was also taken by Honble CESTAT in the case of Ballarpur Industries Ltd. v. CCE, Bhubneswar - 2005 (184) E.L.T. 67 (Tri -Delhi).

(3.) THE appellants contention is that their case is not covered by Larger Bench decision in as much it is not their case that entire realization was received by them and subsequently credit notes were issued. In fact, the value of the goods was subsequently finalized and it is only the net amount which was received by them from their customer. They relied upon the Tribunals decision in case of M/s. Special Blasts Ltd. v. CCE, Raipur - 2005 (192) E.L.T. 331 (Tri -Del.) wherein it was held that settlement of price subsequent to removal of goods will not attract the provisions of unjust enrichment. 5. After going through the record, I find that original adjudicating authority has observed in Paras 11 and 12 of their order as under: