JUDGMENT
Gauri Shankar, Member (T)
1. The appeal is against the order of the Commissioner (Appeals) holding that the respondent was entitled to be refunded the duty of excise which it paid in excess on the glass filament that it manufactured and cleared and setting aside the order of the Asst. Commissioner. Order in the refund to be credited to the Consumer Welfare Fund on the ground that the requirement contained in Sub-section (2) of Section 11B of the Act, that the incidence of duty must not have been passed on to any other person, has not been satisfied.
2. The glass filaments were utilised by the respondent in the manufacture of chopped strained mats, which it cleared on payment of duty. The Commissioner (Appeals) has relied upon the ratio of the Bombay High Court judgment in Solar Pesticides v. UOI 1992 (57) ELT 201 in coming to its conclusion that provision relating to unjust enrichment contained in Sub-section (2) of Section 11B will not apply to captively consumed goods. He also found that the price of the fact of final product did not undergo any change when the glass filament was subject to duty and when it was not liable to duty is “strong reason” to hold that the incidence of duty has not been passed on.
3. The Bombay High Court’s judgment in Solar Pesticides is no longer goods law, having been overturned by the Supreme Court on appeal by the Union [2000 (116) ELT 401]. We are not able to accept the other basis of the Commissioner (Appeals)’s conclusion. The fact that the final product of which the glass filaments form a component may have been sold at the same price prior to and subsequent to levy of duty does not by itself lead to the inescapable conclusion that incidence of duty has not been passed on. There are many factors which may govern the ultimate price of the finished product, and the price of one of the raw material is just one of them. It is not denied there were other materials used in the manufacture of glass fibre. Even apart from such factor such cost of goods will effect the final product. We are mindful of the observation of the Supreme Court in paragraph 91 in its judgment in Mafatlal Inds. v. UOI 1997 (89) ELT 241 that normally no manufacturer would observe the duty incidence of the goods that he makes even if he does not make a profit. This observation is to be read with the provisions of Sub-section (2) of Section 11B. It is therefore required to be proved by the manufacturer that the incidence of duty had not been passed on and “strong reason’ is no substitute for this.
4. Counsel for the respondent then raised a point that the refund became due as a result of finalisation of provisional assessment and by virtue of paragraph 95 of the Mafatlal judgment would not be subjected to the requirement in Section 11B(2). He says that the goods were provisionally assessed to duty by order passed on 29.8.88 and the point as required in Section 9B(1) excluded in February 1989. The assessment itself was finalised in 16.4.91 and final adjustment under sub-rule prior to 1999 when the provisions of Rule 19 were amended to provide that the refund would be sent in accordance with the Section 11B(2). The copies of the document that the counsel for the respondent produced suggest this to be the case. We are not able to accept the contention of the departmental representative that since this point has not been raised earlier, it cannot be considered now. It is a significant question of law involved with regard to the refund. The assessee does not rely upon any documents that were not in possession of the department. He is therefore entitled to make that claim. Since the other documents in support of the claim has not been produced before and the claim made before us is for the first time we think it appropriate to remand the matter to the Deputy/Asst. Commissioner. That authority after considering the submissions that the counsel for the respondent undertakes to make within two month from the receipt of this order and relying on such document as already with the department may pass order on the claim. The departmental representative states that it would be pointless to remand these matters because the documents in question have been destroyed. Even if the department’s records have been destroyed if the respondent can substantiate his claim by relying on document that have been received by the department we do not see why this should be a bar.
5. The appeal is accordingly allowed and the impugned order set aside. The miscellaneous application by the departmental representative for raising additional ground does not survive.