Case Note & Summary
The appellant, M/s. Toyota Kirloskar Motor Ltd., is engaged in manufacturing passenger utility vehicles and parts thereof, which are excisable under Chapter 87 of the Central Excise Tariff Act, 1985. At the relevant time, the assessee purchased tyres and tubes from M/s. MRF Ltd. and used them in the manufacture of vehicles. The assessee paid duty on these inputs and later claimed a refund. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) rejected the refund claim by its final order dated 8.8.2012 in Appeal No. E/716/2002. The assessee then filed this Central Excise Appeal under Section 35G of the Central Excise Act, 1944. The High Court admitted the appeal to consider the question of law whether the assessee passed on the incidence of duty paid on tubes and tyres to their customers as provided under Section 12B of the Act. By consent, the parties were heard for final disposal. The court noted that the Tribunal had rejected the refund claim on the ground that the assessee had passed on the duty incidence to customers, thereby invoking the principle of unjust enrichment under Section 12B. The High Court, after hearing both sides, allowed the appeal and set aside the Tribunal's order, directing the refund to be granted to the assessee. The court held that the assessee had not passed on the incidence of duty to customers and that the burden of proof under Section 12B was not discharged by the revenue. The decision was in favor of the appellant-assessee.
Headnote
A) Central Excise - Refund - Unjust Enrichment - Section 12B of Central Excise Act, 1944 - The assessee claimed refund of duty paid on tubes and tyres used in manufacture of vehicles. The Tribunal rejected the claim on ground that assessee had passed on the duty incidence to customers. The High Court admitted the appeal to consider whether the assessee passed on the incidence of duty to customers under Section 12B. (Paras 1-3)
Issue of Consideration
Whether the assessee passed on the incidence of duty paid on tubes and tyres to their customers as provided for under Section 12-B of the Central Excise Act, 1944.
Final Decision
The High Court allowed the appeal, set aside the impugned order of the Tribunal dated 8.8.2012, and directed the refund to be granted to the assessee.
Law Points
- Section 12B of Central Excise Act
- 1944
- burden of proof
- unjust enrichment
- refund claim
- passing on incidence of duty
Case Details
2013 LawText (KAR) (08) 6
Dilip B. Bhosale, B. Manohar
Sri. Rajesh Chandrakumar for Ravi Shankar and Chander Kumar (for appellant), Sri. C. Shashikantha (for respondent)
M/s. Toyota Kirloskar Motor Ltd.
The Commissioner of Central Excise, Aurangabad II Division
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Central Excise Appeal against rejection of refund claim by CESTAT.
Remedy Sought
Appellant sought to set aside the Tribunal's order and to hold that the question of law be decided in its favour, i.e., that the assessee did not pass on the incidence of duty to customers.
Filing Reason
The assessee's refund claim for duty paid on tubes and tyres was rejected by the Tribunal on the ground that the assessee had passed on the duty incidence to customers, invoking Section 12B of the Central Excise Act, 1944.
Previous Decisions
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) rejected the refund claim by final order No.551/12 dated 8.8.2012 in Appeal No.E/716/2002.
Issues
Whether the assessee passed on the incidence of duty paid on tubes and tyres to their customers as provided for under Section 12-B of the Central Excise Act, 1944.
Submissions/Arguments
Appellant argued that the duty incidence was not passed on to customers and that the refund should be granted.
Respondent argued that the assessee had passed on the duty to customers, thus refund is barred by unjust enrichment under Section 12B.
Ratio Decidendi
The burden of proof under Section 12B of the Central Excise Act, 1944 lies on the revenue to show that the assessee has passed on the incidence of duty to customers. In this case, the revenue failed to discharge that burden, and therefore the refund claim cannot be rejected on the ground of unjust enrichment.
Judgment Excerpts
We admit the appeal to consider the following question of law: 'Whether the assessee passed on the incidence of duty paid by them on tubes and tyres to their customers as provided for under Section 12-B of the Central Excise Act, 1944?'
By consent we have heard learned counsel for the parties for final disposal of the appeal.
Procedural History
The assessee filed a refund claim which was rejected by the original authority. The assessee appealed to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which rejected the appeal by final order dated 8.8.2012. The assessee then filed this Central Excise Appeal under Section 35G of the Central Excise Act, 1944 before the High Court of Karnataka.
Acts & Sections
- Central Excise Act, 1944: Section 12B, Section 35G
- Central Excise Tariff Act, 1985: Chapter 87
