ORDER
T.K. Jayaraman, Member (T)
1. This appeal has been filed against OIA No. 37/04 CE dated 29.9.04 passed by the Commissioner of Customs and Central Excise (Appeals) Visak. The appellant a manufacturer of VP Sugar cleared scrap for contract price which included duty payable. The issue of excisability of the goods was in dispute and later the issue was settled in favour of the appellants. The appellants thereupon filed refund claim. The lower authority held that the refund is admissible but credited the same to the consumer welfare fund on grounds of unjust enrichment. The appellants appealed before the Commissioner (Appeals) who upheld the order of the lower authority. Hence, the appellants have come before this Tribunal for relief.
2. Shri P.R. Venktaraman learned consultant appeared for the appellants and Shri R.K. Singla learned JCDR for the revenue.
3. The learned consultant urged the following points:
1) Every purchase order received by the appellant is inclusive of excise duty. The pattern of invoicing by the assessee is to quote the assessable value after exclusion of Excise duty and arrive at the price by aggregating the two elements. This method of invoicing has apparently been adopted only in order to comply with the statutory requirement under Section 12-A of the Central Excise Act 1944.
2) The following decisions have also been relied on:
a) Commissioner v. Carona Cosmetics
b) Swamy Industries v. Commr
c) ITC Bhadrachalam Paper Boards Ltd., v. Commr
4. Learned JDR relied on the following decisions:
i) Lakhanpal National Ltd., v. CCE, Vadodara 2006 (195) ELT 69 (Tri-Mum)
ii) SRF Ltd. v. CC Chennai )
5. We have gone through the records of the case carefully. The issue is simple. The contract of the appellants with the buyer indicates that the price to be paid for the goods is inclusive of duty payable. Suppose the price is Rs 100/- and if the duty payable is Rs 20/- the appellants would show in the invoice two figures Rs 80/- & Rs 20/- to indicate the duty. Even from the beginning, the appellants took the stand that no duty is leviable on the scrap derived from old machinery. Since the department demanded duty, he paid the same and showed it in the invoice. Later, when it was held that the goods are not liable to duty, we cannot say that he passed on duty burden of Rs. 20/- to the buyer. Irrespective of the fact that the goods are dutiable or not the appellants would be charging Rs. 100/- only. When he pays duty, he gets lesser profit. In other words in a case like this, where the contract price is inclusive of duty payable there can not be unjust enrichment even if the duty payable is either reduced or nil. The case laws relied on by the learned JCDR are not relevant. Hence, we allow the appeal with consequential relief.
(Operative portion of the Order already pronounced in open court on conclusion of the hearing)