[Order]. - Heard the parties.

2. The facts in brief of the case are that the appellants were clearing products viz. Motor Vehicles to their dealers at a fixed rate and allowing quantity discount. The actual quantum of discount was known only after completion of the calendar year. As per the appellants’ request, the assessment was ordered to be provisional on the basis of quantity discount scheme made known by the appellants and existing after 1-9-2000 onwards. At the end of the calendar years, the appellants had shown the quantity discount of Rs. 30,000/-, Rs. 60,000/- and Rs. 90,000/- for levels of performance of 80%, 100% and 120% respectively for their dealers calculated on the basis of the actual number of vehicles sold by their dealers over last year performance in respect of the clearance made during September, 2000 to December, 2000 and quantity discount of Rs. 20,000/-, Rs. 30,000/- and Rs. 40,000/- for levels of performance of 100%, 110% and 120% respectively for Mercedes-Benz car 203 C Class; Rs. 20,000/-, Rs. 50,000/-, Rs. 90,000/- and Rs. 1,10,000/- for levels of performance of 90%, 100%, 110% and 120% respectively for Mercedes-Benz car WZ 10 E Class and Rs. 1,10,000/- for level of performance of 100% for Mercedes-Benz car V220 S Class for their dealers calculated on the basis of the actual number of vehicle sold by their dealers over last year performance, in respect of the clearances made during 1-1-2001 to 31-12-2001. While finalizing the provisional assessment (Order-in-Original) the adjudicating authority observed that duty incidence was passed on to the customer and subsequently the appellants issued credit notes. He further observed that incidence of duty which was refunded to the dealer through credit notes had not been passed on to the customer (final purchaser) and that the duty burden was passed on to the buyer but refund claim was filed by the manufacturer i.e. the appellants. The Deputy Commissioner sanctioned the refund of Rs. 40,59,180/- but credited it to the Consumer Welfare Fund on the ground that the refund was hit by unjust enrichment.

3. The learned Commissioner (Appeals) upheld the Order-in-Original and recorded the following findings in the operative part of the order, in Paras 6, 7 and 8 are as under :-

“6. I find that in the instant case the appellants have passed on the incentive and the consequent duty relief to the dealers by way of credit notes issued subsequent to the clearance of the goods. It means that incidence of duty was passed on to the dealers at the time of clearance of the goods. The question is whether the subsequent credit notes will take the refund claim out of the mischief of unjust enrichment.

7. The Tribunal in the case of Commissioner v. Adrash Gaur Gum Udyog reported in (T) relied upon earlier decision of the Tribunal in the case of Sangam Processors (Bhilwara) Ltd. v. Collector, (T), wherein it was held that once the duty burden was passed on to the customer at the time of clearance of goods, issuance of credit notes at a subsequent stage would not alter the position. The Bench in the “Adarsh Gaur Gum Udyog” case also noted that the decision in Sangam Processors (Bhilwara) Ltd. had been upheld by the Hon’ble Supreme Court. The Tribunal in the case of S. Kumar Ltd. v. CCE, Indore, (Tri.-LB) also considered the Hon’ble Madras High Court judgment in the case of Addison & Co. v. Commissioner, (Mad.) and observed in para 8 of the order that “we are not therefore inclined to accept the contention raised by the ld. Counsel for the appellant that dismissal of the appeal by the Hon’ble Supreme Court challenging the decision of the Tribunal in Sangam Processors (Bhilwara) Ltd. has no value as a binding precedent. It is submitted before us at the bar that the decision of the Hon’ble Madras High Court in Addison & Co. has been taken in appeal and the matter is pending before the Hon’ble Supreme Court”. In para 9 of the order it was further observed that “the ratio in the decision of Sangam Processors (Bhilwara) Ltd., which had. been affirmed by the Hon’ble Apex Court, has to be followed”. (emphasis added)

8. To conclude with, the refund claim is hit by unjust enrichment. The lower authority has rightly credited the amount to the Consumer Welfare Fund. Consequently the appeal is rejected.”

4. The learned Counsel for the appellant states that the facts herein are covered by the ruling of Hon’ble Madras High Court in the case of Addison & Co. v. CCE, Madras - (Mad.). She relies on the following paras :-

“8. It is significant that neither Section 11B nor Section 12B of the Act refers to the consumer or the ultimate user or the last purchaser. The condition which the claimant for refund must fulfil among other conditions is that he must not have passed on incidence of the duty to “any other person”.

9. Section 11B(2) in the proviso thereunder entitles the claimant to receive refund if the amount relatable to any of the items set out in Clauses (a) to (1) under that proviso. Section 11B(2) refers to the Fund. The Fund referred to therein is the one created under Section 12C, which provides that the Central Government shall create a Fund called Consumer Welfare Fund. Section 12C sub-section 2(a) provides that to that fund shall be credited the amount of duty of excise referred to in sub-section (2) of Section 11B or sub-section (2) of Section 11C or sub-section (2) of Section 11D. Section 12D deals with the utilisation of the fund. It requires the Central Government to use the fund for the welfare of the consumers.

10. The amount that can be credited to the fund under Section 11B(2) are the amounts which are not relatable to any one of the sub-sections (a) to (1) under the proviso. The amounts which are relatable thereto cannot be credited to the fund having regard to the imperative language employed in the proviso which sets out that the amount as of the duty of the excise as determined by the Assistant Collector under Section 11B(1) “shall instead of being credited to the fund, be paid to the applicant……………………”.

11. Where the claimant is a manufacturer the clause applicable would be clause (d) of the proviso to Section 11B(2). That clause refers to “duty of excise paid by the manufacturer if he had not passed on incidence of such duty to any other person”.

12. The claim made by the manufacturer here is required to be considered under that provision. That provision has, of course, to be read along with the presumption provided in Section 12B. If the manufacturer can be said to have rebutted the presumption under Section 12B and has fulfilled the condition set out in clause (b) of proviso to Section 11B(2), manufacturer would be entitled to refund. Such refund cannot be denied on the ground that there was no evidence to show as to who the ultimate consumer of the product was and as to whether the ultimate consumer had been asked to bear the burden of the duty which had been initially paid by the manufacturer.

13. Although, the consumer is referred to in the Consumer Welfare Fund, constituted under Section 12C, the Excise Act is not primarily concerned with the actual consumer of the manufacture and product on which duty is levied. The duty is levied on the manufacturer and the quantum of duty is determined with reference to the price at which the manufacturer sells to the buyer, who, in most cases will be a dealer, and not on the price at which that buyer in turn sells to his sub-dealer or to the retailer or to the ultimate consumer.

14. Section 11B is intended to prevent a person who has paid duty or borne it initially from receiving the refund of a part or whole of the duty if he has already passed on that burden of the duty paid by him to another as that would result in unjust enrichment. It is that amount which is required to be credited to the Consumer Welfare Fund. The fact that the Consumer Welfare Fund has been constituted does not on that score require the authorities dealing with refund claims to start an enquiry as to the price at which the goods had been sold to the ultimate consumer after the dealer who purchases the goods from the manufacturer, sells to its sub-dealer who in turn may sell to a retailer who in turn ultimately may sell the same to the actual consumer. The enrichment of the person, who has paid the duty and seeks refund would be unjust if he even while not suffering the burden of duty after having passed on the same to another obtains refund and retains such refund with him. There would be nothing unjust where the person who has paid duty and has not passed on that burden to another receives refund thereby reducing the burden which he was not required to bear but had borne.

15. The language employed in Section 11B therefore is not capable of being construed as having reference to the ultimate consumer of the product. What has to be demonstrated by the claimant is that the burden of the duty paid had not been passed on by him to any other person. The passing on will occur only if the person who claims refund of duty has shifted the burden to another. There can be no passing on of the incidence of the duty if he merely reduces his burden by receiving the refund. The possibility that the dealer who has obtained goods from the manufacturer may charge to his buyer the full amount of the duty ignoring the refund received by the manufacturer cannot be a ground for denying refund to the manufacturer.

16. The word ‘buyer’ used in Section 12B also cannot be construed as referring to the ultimate consumer. The buyer referred to therein in the normal circumstances is the buyer who buys the goods from the person who has paid duty.

17. The primary object of the provision which is intended to deter or prevent unjust enrichment is to prevent enrichment of the person who has paid duty and who seeks refund of the same. It is not directed at the buyer who has entered into arms length transactions with manufacturer and has sold the goods to sub-dealers, retailers or consumers.”

5. It is further pointed out by the ld. Counsel that the ruling of Addison & Co. have been followed by the Hon’ble Andhra Pradesh High Court in A.P. Paper Mills Ltd. - 2014-TIOL-448-HC-AP-CX, dated 19-2-2014 = (A.P.). It is further pointed out that the ld. Commissioner has held that the refund claim is not admissible, only on the ground that the dispute as in Addison & Co. had been resolved by the Hon’ble Supreme Court vide (S.C.) order dated 18-11-2002, passed the following order :-

“Delay condoned subject to payment of Rs. 25,000/- by the petitioner to the respondent by way of cost which shall not be costs in the cause.

Leave granted. Printing dispensed with. The matter be heard on the SLP paper book itself. Liberty to file additional papers, if any, within six weeks. Original record shall be requisitioned.”

6. The learned AR relying on the decision by the Hon’ble Supreme Court in Addison & Co., states that the present appeal is to be dismissed as the ruling of Hon’ble Madras High Court is in jeopardy.

7. Having considered the rival contentions, I find that the ruling of Hon’ble Madras High Court in the case of Addison & Co. is good law. No stay have been given by the Hon’ble Apex Court. Further the Hon’ble Andhra Pradesh High Court in aforementioned order dated 19-2-2014 have followed Addison & Co. I also find that the facts of present appeal are common with the facts of the Addison & Co. (supra). Further the facts in Sangam Processors case are different, as the manufacturer in that case had applied for refund without paying back the duty collected from the buyer/dealer. Thus, the appeal is allowed with direction to the adjudicating authority to disburse the determined refund within six weeks along with interest as per Rules.

(Dictated and pronounced in open Court)