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M/s. Eltex Super Castings Ltd v/s Commissioner of Central Excise, Coimbatore

    Appeal No. E/846 of 2004

    Decided On, 05 October 2010

    At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai


    Shri M. Saravanan, Consultant, for the Appellants. Shri C. Rangaraju, SDR for the Respondent.

Judgment Text

Per Jyoti Balasundaram

1. The assessees who are manufacturers of rough castings filed a claim for refund of Rs.50,725/- being the duty paid on development cost of patterns, on the ground that they were entitled to exemption in terms of Notification No. 67/95-CE dated 16.3.1999. The claim was rejected by the Assistant Commissioner on the ground that it was not substantiated - the assessees could not establish that the ownership of the patterns did not lie with buyers. The Commissioner (Appeals) held that the claim was admissible on merits as he accepted the assessee?s contention that they were eligible to the exemption under the Notification; however, he rejected the claim on the ground of unjust enrichment. Hence this appeal.

2. We have heard both sides. The plea of the assessee is that although they had issued credit notes, they had not collected duty from their customers and therefore they are entitled to refund as they have not passed on the incidence of duty to their customers. In this connection, they relied upon documents such as invoice, credit notes and ledger accounts. We find that these documents were not before the authorities below and therefore neither authority was in a position to examine the documents to come to a conclusion as to whether the incidence of duty had been passed on to the customers by the assessee or not. Interests of justice require that this aspect is considered by the adjudicating authority for satisfaction as to whether the incidence of duty is hit by the bar of unjust enrichment. We, therefore, set aside the impugned order and remit the case to the adjudicating authority for fresh decision in the light of the documents relied upon and placed before the Bench by the assessees to substantiate their contention that they had not

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passed on the incidence of duty (not collected from the customers). The appeal is thus allowed by way of remand for passing fresh orders after extending a reasonable opportunity of being heard in person.