ORDER
S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Appeal No. 160/97-CE dated 09.12.97 by which the Commissioner (Appeals) has noted that refund claim of Rs. 1,05,734/- is hit by the terms of Sec. 11B of Central Excise Act as appellants have failed to prove that excess duty paid was not passed on to any other person. The Ld. Commissioner also noted that the judgment relied by the appellants and held it to be are distinguishable and not applicable to the facts of the case. He has noted that the Cost Certificate will not be able to exclusively establish as to whether the incidence of excess Central Excise duty paid on polyester monofilament yarn of above 2000 denies has ben ultimately passed on to the customers or not, when the zip fasteners manufactured out of them, were sold by M/s. Sanghi Zip Fasterners P Ltd. to the buyers. He has given detailed findings as to how the appellants have failed to established that the incidence of higher rate of duty has been ultimately passed on to the buyers. In the Show Cause Notice dtd. 25.10.95, in Para 3 it had been brought out that on verification of refund application it was observed that the appellants during the period from 21.3.95 to 11.4.95 cleared 15, 324 Kgs of Polyester Monofilament Year of above 2000 deniers valued at Rs. 9,19,440/- by paying duty at 30% advalorem towards BED and 15% on BED towards AED to M/s. Sanghi Zip Fasteners Pvt Ltd. The appellant in their application has stated that they had raised a credit note in favour of M/s. Sanghi Zip Fasterners for s. 1,05,734/- for repayment of duty collected in excess. They had enclosed copy of credit note No. 601/22.4.95 issued to M/s. Sanghi Zip Fasterners (P) Ltd. Hence, the show cause notice was called upon them to prove with documentary evidence that the incidence of duty has not been passed on to any other person.
2. Ld. Counsel submits that the show cause notice was with reference to zip fasteners not having on the excess duty to any other person. It did not call upon the appellant to have passed on the incidence of duty on the question of issue of credit notes. he submits that the Madras High Court in the case of Addison & Co. Vs. CCE, Madras 2001 (129) ELT 44 has noted in Para 14 that Sec. 11B is intended to prevent a person who has paid duty or borne it initially from receiving the refund of a pat of whole of the duty if he has already passed on the burden of the duty paid by him to another person as that would result in unjust enrichment. The Section does not require the appellant to show his purchaser having passed on to another person or not. Therefore, he submits that the show cause notice was restricted only this ground and as the Madras High Court had answered the point, the question of appellant’s purchaser having passed on the credit note would not arise. He submits that the Larger Bench in the case of S. Kumar’s Ltd. 2003 (153) ELT 217, dealt with an aspect pertaining to appellant having issued credit notes or cheques and that being hit by the doctrine of unjust enrichment. He submits that the show cause notice restricted to the buyer having passed on the incidence of duty. This argument is disputed by the Ld. DR who pointed out from third para of the show cause notice itself that the appellants along with their application had relied on the credit notes. Therefore, show cause notice called upon them to prove that documentary evidence that the incidence of duty has not been passed on. Once the claim is made on credit notes and relied by the appellant itself, then the issue is covered by the findings of the Larger Bench as noted in S. Kumar’s Ltd which upheld the earlier judgment on this point rendered in the case of Sangam Processors (Bhilwara) Ltd. 1994 (71) ELT 989 which has been confirmed by the Apex Court.
3. On a careful consideration we notice that the appellant itself had lodged their submission that they had issued credit notes to their purchaser and that it is not his by the doctrine of unjust enrichment. Therefore, now the Counsel cannot take a plea that the show cause notice was on a different footing. We are not impressed with this argument. So long as the appellants themselves committed before the authorities that they had issued credit notes to their buyers then in such a circumstance, it has to be held that the incidence of duty had been passed on to the buyers and the order of the Commissioner to direct the duty amount to be deposited in the Consumer Welfare Fund is correct and proper in the eye of law. The ruling of the Larger Bench in the case of S. Kumar’s Ltd. Vs. CCE is fully applicable to the facts of the case. The findings rendered by the Larger Bench in the case of S. Kumar’s ltd is herein noted below : –
The above appeal has come up for consideration before Larger Bench by way of reference made by Single Member in Misc. Order No. M/79/02/NM (SM), dt. 16-4-2000 (2002 (143) ELT 641 (Tribunal).
2. Reference was necessitated since two co-ordinate Division benches of this Tribunal have taken divergent views on the question whether post-clearance adjustment like issuance of credit notes or cheques by the assessee who is claiming refund to buyer of the goods, taking back the burden of duty on the goods would help the assessee to get over the bar of unjust enrichment under section 11B of the Central Excise Act.
3. The appellants were job workers for M/s. Dhavani Terrifabs Export Pvt. Ltd. (for short M/s. DTE). They received raw material (grey fabrics of cotton) from M/s. DTE and after processing the same, supplied the processed fabrics (falling under Chapter 60 of the Schedule to the Central Excise Tariff Act, 1985) to M/s. DTE During the period 5-3-97 to 30-8-97, the appellant cleared processed fabrics to M/s. DTE on payment of Additional Excise Duty (AED) in lieu of sales tax @ 8% ad valorem under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The total duty so paid was Rs. 8,43,041/-. Later on realizing that under Notification No. 9/96-CE, dt. 23.7.96, the goods were exempt from such duty the appellant sent to M/s. DTE a cheque dt. 3.9.97 for Rs. 7,08,520/-, which is equivalent to the amount of duty, the appellants had collected from M/s. DTE at the time of clearance of the goods. It is to be noted that the appellant had not collected the differential amount of Rs. 1,34,521/- from M/s. DTE at the time of clearance of the goods.
4. The appellants, therefore, filed an application for refund with the Asstt. Commissioner on 4-9-97. Relying on the decision of the Tribunal in the case of CCE V. Addition & Co., 1997 (93) ELT 429 a SCN was issued to the appellant proposing to reject the claim. One of the reasons shown therein was that the refund of any duty amount made by the appellant to M/s. DTE subsequent to clearance of the goods was of not consequence for the purpose of Section 11B an the claim was hit by principles of unjust enrichment. The adjudicating authority rejected the claim. The appeal filed by the assessee was dismissed by the Commissioner (Appeals) holding that in the light of the Tribunal’s decision in CCE, Jaipur V. Adarsh Cuar Gum Udyog, 2000 (120) ELT 138 as well as Board’s Circular No. 317/33/97/CX, dated 18-6-97, the refund claim was hit by the principles of unjust enrichment under Section 11B.
5. It was contended by the Id. Counsel for the appellant that the decision of this Tribunal in the case of CCE, Madras Vs. Addison & Co., 1997 (93) Vs. CCE, Madras, 2001 (129) ELT 44.
6. The main issue that was convassed before us by the Id. Counsel for the appellant was that dismissal of the appeal in Sangam Processors (Bhilwara) Ltd. Vs. CCE, 1994 (71) ELT 989 by the Supreme Court cannot be treated as a binding precedent since that order of the Supreme Court does not give detailed reasons. In support of the above contention Id. Counsel Shri B.L. Narsimhan relied on the two decisions of the Supreme Court in Sun Export Corpon., Bombay Vs. Collector of Customs, Bombay, 1997 (93) ELT 641 (SC) – 1997 (6) SSC 564 and S. Shanmugavel Nadar Vs. State of T.N. & Another, 2002 (8) SSC. 361.
7. On the other hand Id. Senior Counsel Shri M. Chandrashekharan who appeared on behalf of the Revenue pointed out that the issue is directly covered by the decision of the Supreme Court in Kunhayammed & Others Vs. State of Kerala & Another, 2001 (129) ELT 11 (SC) = 2000 (6) SSC 359. In this decision of the Supreme Court, there is an elaborate consideration on the question of merger as well as the binding nature of the decision of the Supreme Court as a precedent when Special Leave Petition and appeals are dismissed without reasoned order. Paragraph 4.1 of the above judgment reads as follows :
“41. Once a special leave petition has been granted, the doors for the exercise of appellate jurisdiction of this Court have been let open. The order impugned before the Supreme Court becomes an order appealed against. Any order passed thereafter would be an appellate order and would attract the applicability of doctrine of merger. It would not make a difference whether the order is one of reversal or of modification or of dismissal —— the order appealed against. It would also not make any difference if the order is a speaking or non-speaking one. Whenever this Court has felt ——– to apply its mind to the merits of the order put in issue before it though it may be in-clined to affirm the same, it is customary with the court so grant leave to appeal and thereafter dismiss the appeal itself (and not merely the petition for special leave) though at times the order granting leave to appeal and dismissing the appeal are contained in the same order and at times. the orders are quite brief. nevertheless, the order shows that exercise of appellate jurisdiction and therein the merits of the order shows the exercise of appellate jurisdiction and therein the merits of the order impugned having been subjected to judicial scrutiny of this Court.”
8. The above would clearly show that when a Civil Appeal is dismissed even though without assigning reasons it will have an effect of binding precedent unlike in the case of dismissal of a special leave petition. We are not therefore inclined to accept the contention raised by the Id. Counsel for the appellant that dismissal of the appeal by the Supreme Court challenging the decision of the Tribunal in Sangam Processors (Bhilwara) Ltd. has not value as a binding precedent. It is submitted before us at the bar that the decision of the Madras High Court in Addison & Co. has been taken in appeal and the matter is pending before the Supreme Court.
9. In the light of the above, we hold that the view taken in Thermom Heat Tracers Ltd., is not goods law and the ratio in the decision of Sangam Processors (Bhilwara) Ltd. which has been affirmed by the Apex Court has to be followed. In the result, the claim for refund made by the appellant to the extent of Rs. 7,08,520/- is declined. As far as the claim for refund of Rs. 1,34,521/- is concerned since there is no dispute of the fact that this amount of duty had not been collected by the appellant, it is not hit by the principles of unjust enrichment. Subject to the above clarification, the appeal stands dismissed.
Following the ratio thereof, we find no merit in the appeal and same is rejected.