By TIOL News Service

MUMBAI, OCT 09, 2014: THIS is a Revenue appeal against the order dated 18.03.2005 passed by Commissioner(A), Pune-II.

Background: The respondent is engaged in the manufacture of generic and patent & proprietary medicaments and clearing the same to M/s Phyto Marketing Pvt. Ltd . Some of the Directors of the respondent company and of the said Phyto Marketing Pvt. Ltd. were relatives. The respondent paid duty on the value at which the goods were sold by Phyto Marketing Pvt. Ltd. in the market as per their own appreciation of law. In the commercial invoice of even date (which contains reference of the excise invoices) the goods have been valued at the actual sale price and there upon have added Sales Tax.

Subsequently, the respondent on its understanding and so advised that it has wrongly determined the assessable value at a higher amount and have paid excess excise duty, filed refund claim with the Revenue.

The lower authority rejected the claim but the Commissioner(A) allowed the same and, therefore, as mentioned, the Revenue is in appeal.

Many case laws were cited and extracted by both sides justifying their stand.

The Bench in a succinct order held -

"5. …, I find that the categorical finding of fact as per the impugned order where the Commissioner (Appeals) has recorded in favour of the respondent assessee, that it has collected the duty of excise as per the commercial invoice and have not collected the higher duty as indicated in the excise invoice. Further, the appellate authority has considered the C.A. certificate which also categorically indicated that the assessee has not passed on the burden of duty/differential duty to its customers and had also relied on ruling of the Tribunal in the case of Commissioner of Central Excise Vs. Shethia Audio Pvt.Ltd. . Further, I hold that ruling relied upon by the Revenue are not applicable in the facts and circumstances of the case. The main ground of the Revenue is that the learned Commissioner (Appeals) has allowed the appeal of the respondent assessee taking notice that the prices have remained the same before and during the period in dispute. It is not the case as evident on perusal of the impugned appellate order. Thus, I uphold the appellate order and dismiss the appeal of the Revenue. The respondent assessee will be entitled to refund with interest, if any, in accordance with law."

In passing : Refund Amount - Rs.16,49,694.84. Interest for Nine years plus - priceless !

(See 2014-TIOL-1944-CESTAT-MUM )