Commissioner Of C. Ex. vs Vardhman Industries Ltd. on 6 February, 2006

Punjab-Haryana High Court
Commissioner Of C. Ex. vs Vardhman Industries Ltd. on 6 February, 2006
Equivalent citations: 2006 (202) ELT 765 P H
Author: D Jain
Bench: D Jain, S Kant


D.K. Jain, C.J.

1. This appeal, by the Revenue, under Section 35(G) of the Central Excise Act, 1944 (for short, ‘the Act’) is directed against order, dated 10-10-2003, passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for short, ‘the Tribunal’), in Appeal No. E/2258/03-NB (SM). According to the Revenue, the order of the Tribunal involves the following substantial question of law:

Whether duty paid at the time of clearance of goods and collected from customers can be refunded if post clearance transaction is made through credit notes?

2. The respondent – assessee applied for refund claim of Rs. 1,02,152/- for the period from July, 2001 to March, 2002 on the ground that they had passed on various discounts to the buyers during the said period by issuing credit notes. It was pleaded that at the time of removal of the goods, it was not possible to know the quantum of discount, that was to be deducted from the transaction value, and the rate difference to be allowed to the customers.

3. Though, the adjudicating authority agreed with the assessee, in principle, but directed that the said refund be credited to the Consumer Welfare Fund, as stipulated in Section 11-B of the Act.

4. Being aggrieved, the assessee preferred appeal to the Commissioner (Appeals). While allowing the appeal, the Commissioner noticed that no portion of the duty, of which refund had been claimed, had been passed on to the customers and in fact, it was borne by the assessee. The Commissioner thus, held that under these circumstances, a direction to credit the said refund amount to the Consumer Welfare Fund could not be issued. In support of his view, the Commissioner relied on a decision of the Tribunal in the case of Telephone Cables v. CCE 2003 (153) E.L.T. 237.

5. Being dissatisfied with the view taken by the Commissioner, the Revenue took the matter in further appeal to the Tribunal. By the impugned order, the Tribunal has dismissed the appeal. Hence, the present appeal.

6. Assailing the order, Mr. Gurpreet Singh, learned Counsel for the Revenue has submitted that the Tribunal as well as the Commissioner had wrongly placed reliance on the decision of the Tribunal in the case of Telephone Cables (supra). The submission is that the issue involved in the said decision was entirely different. Learned Counsel has also placed reliance on another decision of the Tribunal in the case of Commissioner of Central Excise, Madras v. Addison and Co. .

7. Learned Counsel for the assessee, on the other hand, has submitted that the finding, recorded by the Tribunal to the effect that the incidence of duty, of which refund had been claimed by the assessee, had not been passed on to the customers, is a pure finding of fact, giving rise to no question of law.

8. We find substance in the contention urged by learned Counsel for the assessee. Having come to the conclusion that claim preferred by the assessee was in order, the short dispute before the appellate authorities was whether the adjudicating authority was justified in directing the credit of the refund amount, due to the assessee, to the Consumer Welfare Fund, by applying the doctrine of unjust enrichment. Both the appellate authorities below have recorded a concurrent finding of fact that no incidence of duty, in respect whereof the claim had been preferred by the assessee, had been passed on to the customers. The said finding, which is not under challenge, is a pure finding of fact, giving rise to no question of law, much less a substantial question of law.

9. Accordingly, we decline to entertain the appeal. Dismissed.

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