COMMISSIONER OF CENTRAL EXCISE, MADRAS versus M/S. ADDISON & CO. LTD.

COMMISSIONER OF CENTRAL EXCISE, MADRAS versus M/S. ADDISON & CO. LTD.

Refund of excise duty claimed in respect of turnover discount by credit notes is maintainable only if the claimant demonstrates that the incidence of duty was not passed on to any other person. If the burden of duty was passed on—even by deduction via credit notes—the claimant is not entitled to refund due to unjust enrichment under Section 11-B of the Central Excise Act, 1944. The buyer referred to in s.11-B(2) proviso is not limited to the first buyer. The statutory presumption is that duty is passed to the ultimate consumer. Only if it is established that the applicant had borne the duty and not passed it on, refund can be made to the applicant; otherwise, it is credited to the...

Parties
Appellant: Commissioner of Central Excise, Madras; Respondent: M/s. Addison & Co. Ltd.
Jurisdiction
India
Judgment Date
29 August 2016
Procedural Posture
Civil Appeal / Supreme Court on Appeal From High Court (madras, Andhra Pradesh, Bombay, Rajasthan) and Cegat/cestat
Outcome
Appeals of Revenue allowed; refund claims of the respondent-assessees rejected except in specific instance where buyer returned duty to customer and evidence established; appeals of revenue in similar connected matters also allowed; in one differentiated factual instance, appeal of Revenue dismissed.
Legal Topics
Central Excise, Refund, Unjust Enrichment, Turnover Discount, Statutory Presumption
Tax Law Central Excise Refund Unjust Enrichment Turnover Discount Statutory Presumption

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Parties

Commissioner of Central Excise, Madras

Appellant

M/s. Addison & Co. Ltd.

Respondent

Procedural Posture

Civil Appeal / Supreme Court on Appeal From High Court (madras, Andhra Pradesh, Bombay, Rajasthan) and Cegat/cestat

Legal Issues

  1. 1 Whether refund claim in respect of turnover discount (based on credit notes) is maintainable under Central Excise Act, 1944, s.11-B, when the incidence of duty has been passed on.
  2. 2 The scope of 'buyer' under s.11-B(2) proviso, and whether refund can be denied based on unjust enrichment.

Ratio Decidendi

Refund of excise duty claimed in respect of turnover discount by credit notes is maintainable only if the claimant demonstrates that the incidence of duty was not passed on to any other person. If the burden of duty was passed on—even by deduction via credit notes—the claimant is not entitled to refund due to unjust enrichment under Section 11-B of the Central Excise Act, 1944. The buyer referred to in s.11-B(2) proviso is not limited to the first buyer. The statutory presumption is that duty is passed to the ultimate consumer. Only if it is established that the applicant had borne the duty and not passed it on, refund can be made to the applicant; otherwise, it is credited to the...

Court Disposition

Appeals of Revenue allowed; refund claims of the respondent-assessees rejected except in specific instance where buyer returned duty to customer and evidence established; appeals of revenue in similar connected matters also allowed; in one differentiated factual instance, appeal of Revenue dismissed.

Orders

  • Civil Appeal Nos. 7906 of 2002 and 14689 of 2015 allowed, refund denied.
  • Civil Appeals arising out of Special Leave Petition (C) Nos. 18426, 18423, 18425, 23722 of 2015, 12282, 16142, 16141 of 2016 and 25055 of 2009 allowed; refund denied.