ORDER
Moheb Ali M., Member (T)
1. These two appeals, one by the Revenue and the other by the assessee are filed against the order of the Commissioner (A).
2. M/s. Hawkins Cookers Ltd., the appellant manufacture Pressure Cookers. They also manufacture parts of pressure cooker, which are consumed captively and are cleared for home consumption as well. Parts of pressure cookers were exempt/from payment of excise duty vide Notification No., 102/88 dated 1.3.1988. The exemption was withdrawn by Notification No. 181/88 dt. 13.5.1988. However, the said exemption from duty was restored by another Notification No. 250/88 dated 1.9.88. The appellants paid duty on the parts of Pressure Cookers, which were caplively consumed in the manufacture of pressure cookers, even when such parts were exempt from payment of Central Excise duty after 1.9.1988 upto 20.9.1988. The appellants claimed refund of such duty paid on the plea that there was no increase in the price of pressure cookers when they paid duty on the parts, which established that, the appellants have not passed on the incidence of duty to their buyers. The original authority admitted that the appellants paid Central Excise duty on parts during the period 1.9.88 to 20.9.88 when such duty is not payable, sanctioned it but credited it to the Consumer Welfare Fund on the ground that the appellant has not established that the incidence of duty was not passed on to the buyers. The amount of refund sanctioned but credited to Consumer Welfare Fund is Rs. 94,585.92.
3. Aggrieved by this order, the appellants preferred an appeal to the Commissioner (A) who disposed of the appeal with the following observations and directions to the original authority. The order-in-appeal is dated 9.1.1998:-
“I, therefore, set aside the impugned order and direct that the matter should be considered on the basis of the evidence regarding the price structure prior to, during the immediately after the currency of the said notification, and if found to be constant, the refund thereon claimed by the appellant should be paid on them. There can be no better evidence support the appellants claim that the incidence of duty paid on parts have not been built into the price of pressure cookers. Assistant Commissioner should however ensure that this refund pertains only to such parts which will were used captively in the manufacture of pressure cookers sold by the appellants from their factory during the relevant time, and not on parts sold as such to independent buyers. His order, in reconsideration on the basis of findings given in this Order-in-Appeal, shall be modified accordingly”.
4. Aggrieved by this order the appellants came in appeal.
Their grounds are:
(a) The parts on which duty is erroneously paid were captively consumed as therefore the doctrine of unjust enrichment does not apply. Solar Pesticides case of Bombay High Court was relied upon.
(b) Parts of pressure cookers were captively consumed and therefore were not sold, no excise duty was charged in respect of these parts. Hence provisions of Section 11B do not apply.
(c) Pressure cookers themselves were exempt from payment of duty. When they were sold no excise duty was paid. So provisions of Section 11B do not apply. (d) On a captive consumption situation the buyer and the seller remained the same. There is no external buyer to whom the burden of duty can be passed on. 5. The appellants urged that the order of the Commissioner (A) be amended/modified to provide for refund directly without invoking doctrine of unjust enrichment and the ordered to refunded along with interest.
6. The appellants relied on the decision of the Tribunal in the case of (a) Commissioner of Central Excise, Chandigarh v. Metro Tyres Ltd. [1996 (82) ELT 95 (Tribunal), (b) I TC Bhadrachalam Papcrboards Ltd. v. Commissioner of Central Excise [2002 (146) ELT 582 (Tri.Bang.), (c) Infar (India) Ltd. v. Commissioner of Customs, New Delhi [2002 (150) ELT 411 (Tri.Del.)] (Majority judgment) (d) Union of India v. Solar Pesticide Pvt. Ltd. [2000 (116) ELT 401. (S.C.)].
7. Heard both sides. I have gone through the grounds of appeal and the case law and have perused the grounds of appeal mentioned elsewhere in this order. The ground (a) that unjust enrichment is not applicable to the case of captive consumption is no more valid in view of the Supreme Court’s decision in the case of Solar Pesticides. Similarly ground b, c & d of the appeal memorandum arc not valid for the reason that what we are concerned with is whether the incidence of duty has been passed on directly or indirectly by the claimant. Even when there is no duty on the final product the cost incurred on the raw material could be passed on (cost includes Excise duty paid on raw material) to the buyer. I observe none of the grounds in the appeal memorandum survive. But during the course of arguments the Ld. Advocate pleaded that the single most important factor in the appellant’s favour is that the price of the pressure cooker always remained same whether they paid duty on the inputs or not. The appellant, he argued, had fixed the price structure for pressure cooker 1 1/2 years before withdrawal of exemption. The prices of pressure cookers were inclusive of all costs. The price structure remained the same even after the exemption was restored. He argued that the presumption against the appellant that he has passed on the incidence of duty has been successfully rebutted. He relied on the decision of the Majority Judgment of the Tribunal cited supra. He argued that even if the d’octrine of unjust enrichment applies to captive consumption situation in the present Case the duty paid on the inputs captively consumed has not been passed on to the buyer as evidence from the price of the pressure cookers. He further pleaded that the Commissioner (A)’s order be amended/modified to say that the doctrine of unjust enrichment did not apply in his case.
8. I observe that whether incidence of duty has been passed on or not is a matter of fact which could be established by leading evidence. The fact that there was no difference in prices even when the inputs suffered duty does not establish that the incidence of duty has not been passed on. Each individual case has to be examined in its own right to determine whether or not in incidence of duty is passed on. In Mafatlat Industries Ltd. v. UOI [1997 (89) ELT 247 (89) ELT 247 (S.C.)] the Apex Court observe that incidence of duty can be passed on by a manufacturer by dipping into his profits. The burden to prove that the incidence of duty has not been passed on appears to be the heaviest burden on earth.
9. None of the Tribunal’s decision relied upon by the appellant did refer to Madras High Court’s decision reported [1992 (59) ELT 345 Madras). The Hon’ble High Court held that if final product prices remained constant even though inputs duty was incurred, then the only logical presumption in such a situation is that profits were reduced but that input duty incidence did get passed on to the buyers. The appellants laid their claim for refund only on this ground -the prices remained the same after and before. Following this decision of Madras High Court the appeal filed by the assessee is rejected.
10. The Revenue’s appeal succeeds on this ground only. The Commissioner (A) passed his ruling entirely on the tact that the price remained the same. The decision of Madras High Court cited supra is against such a conclusion.
11. The Revenue’s appeal is allowed. The order of the Commissioner (Appeals) is set aside. The order of the original authority is upheld accordingly.