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Judgment
[1] The challenge in this petition is to the final order dated 19th August, 2004 passed by the Customs, Excise and Service Tax Appellate Tribunal,
Principal Bench at New Delhi.  The order dated 29th December, 2003 passed in Appeal by the Commissioner, Customs and Central Excise
(Appeals), Nagpur, is also under challenge.  The appellant claims that the order passed by the Joint Commissioner, Central Excise, Bhandara,
dated 5th December, 2002, directing refund of an amount of Rs.71,55,111.82 under Section 11B of the Central Excise Act, has been set aside by the
Commissioner and it is maintained by the appellate Tribunal.
[2] Heard Shri Anand Jaiswal, the learned Senior Advocate assisted by Shri W.T.Mathew, Advocate for the appellant and Shri Shantanu Khedkar,
learned Advocate along with Shri Marathe, Advocate for respondent Nos. 1, 3 and 4 i.e. Department of Central Excise.
[3] It is not in dispute that prior to 1st April, 1989, the manufacturers of snuff of tobacco were classified under Entry No. 2404.50 under the Schedule
to the Central Excise Tariff Act and the basic excise duty payable was to the extent of 25%. With effect from 1st April, 1989, another Entry No.
2404.60 was introduced in respect of preparation of snuff of tobacco in any proportion and the duty payable in respect of it was of 10%.Â
[4] The dispute was whether the snuff of tobacco manufactured by the appellant was classifiable under Entry No. 2404.50 or 2404.60 after 1st April,
1989. The issue is concluded in the earlier round of proceedings which has attained the finality upto the Apex Court holding that from 1st April, 1989,
the snuff of tobacco manufactured by the appellant was classifiable under the Entry No. 2404.60 and only 10% of the duty was payable on it. Â
The appellant paid duty at the rate of 25% as was charged by the Department from 1st April, 1989 under protest.  Consequent upon the decision
which has attained the finality upto the Apex Court, the appellant claimed refund of the excess amount of duty paid from 1st April, 1989 till February,
1994, after which the appellant was undisputedly classified under Entry No.2404.60.
[5] In the aforesaid background, the question which arose in the proceedings before the lower authorities, out of which the present appeal arises was,
whether the appellant was entitled to refund of excise duty paid from 1st April, 1989 to the end of February, 1994. The Department wanted the
appellant to produce the evidence on record to establish its claim that the excise duty paid to the Department by the appellant during the said period
was not passed on to the consumer. The appellant produced before the authorities the invoices, the balance sheet and the invoices of certain other
comparable manufacturers involved in the sale of snuff of tobacco earlier classified under Entry No. 2404.50 and from 1st April, 1989, under the Entry
No. 2404.60. The Joint Commissioner, Central Excise, partly accepted the claim of the appellant. The claim rejected by him was accepted by the
appellant, but the Department preferred an appeal before the Commissioner, Central Excise, who has reversed the order of refund passed by the
Joint Commissioner. The appellate Tribunal has maintained the order of Commissioner in appeal.
[6] Shri Shantanu Khedkar, the learned counsel appearing for the Department invited our attention to the decision in appeal by the Commissioner as
well as by the appellate Tribunal, which place the reliance upon the decision of the Apeex Court in case of Commissioner of Central Excise,
MumbaiÂII vrs. Allied Photographics India Ltd., reported in (2004) 4 SCC 34, holding in paragraph 18 that, uniformity in price before and after
the assessment does not lead to the inevitable conclusion that incidence of duty has not been passed on to the buyer as such uniformity may be due to
various factors.  The Court rejected the claim for refund holding that the findings of the authorities below are based upon the relevant factors
which does not call for interference under Article 136 of the Constitution of India. He has also relied upon the decision of the Apex Court in case of
South India Alloy Industries vrs. Collector of Central Excise, reported in (1997) 8 SCC 729 to urge that the onus is upon the assessee to
establish the claim for refund by producing the evidence on record.
[7] The aforesaid contention of Shri Khedkar was in response to the plea raised by Shri Anand Jaiswal, the learned Senior Advocate, that there was
no increase in the maximum retail price for which the items of manufacturers were sold prior to 1st April, 1989 and subsequent thereto. It was also
the contention raised that in order to sustain in the competition, the appellant could not charge the maximum retail price more than the one prevailing in
the market. He has pointed out that the maximum sell price for which the items in question were sold by other competitor was the same. He also
invited our attention to the invoices issued by the appellant indicating that the price for which the items were sold was inclusive of central excise
duty. The reliance was placed by Shri Anand Jaiswal on the decision of the Division Bench of this Court in case of Commissioner of Central
Excise, PuneÂIÂ vrs. Sandvik Asia Ltd., reported in 2015 (323) E.L.T 431 (Bom.). The reliance was also placed upon the decision of the Apex
Court in Commissioner of Customs, New Delhi vrs. Organan (India) Ltd., reported in 2008 (231) E.L.T. 201 (S.C.).
[8] In our view, the principle of law laid down by the Apex Court in para 18 of the decision in case of Commissioner of C entral Excise, MumbaiÂIIÂ
vrs. Allied Photographics India Ltd., relied upon by Shri Khedkar cannot be construed to be of universal application and it will depend upon the facts
and circumstances of each case. No doubt, if the appellant claims refund under Section 11B of the Central Excise Act, the burden to establish
such claim shall be upon the appellant, who has to lead evidence to the satisfaction of the authorities concern for refund of the amount.Â
[9] Shri Jaiswal, the learned Senior Counsel appearing for the appellant has urged that the authorities concerned if was not satisfied with the evidence
produced before it, was at liberty to call from the appellant the relevant documents having bearing on the issue required to be decided. In our view,Â
the proceedings before the Joint Commissioner of Central Excise are not actually in the nature of lis and the authority has to be satisfied on the basis
of objective assessment of the material placed on record. It is the duty of the authority to call for the cost sheet prepared and certified by the Cost
Accountant, to formulate the Maximum Retail Price of the item sold and the reasonable profit derived by the manufacturer, to decide the question as
to whether entire duty of 25% was charged and recovered from the customer or consumer. If the authority feels that certain relevant material can
be called from the assessee which shall have the bearing on the controversy involved, such an opportunity has to be provided to the assessee,
otherwise the order may suffer from the breach of principles of natural justice.
[10] In the background of the aforesaid position, we find that the matter is required to be remanded to the Joint Commissioner, Central Excise to
decide the controversy afresh by permitting the assessee to produce on record the other documents having bearing on the issue involved in the present
case by setting aside the orders passed by the authorities below.
[11] In the result, writ petition is party allowed. The order dated 19th August, 2004 passed by the Customs, Excise and Service Tax Appellate
Tribunal, Principal Bench at New Delhi, the order dated 29th December, 2003 passed in Appeal by the Commissioner, Customs and Central Excise
(Appeals), Nagpur, and the order dated 5th December, 2002, passed by the Joint Commissioner, Central Excise, Bhandara, are hereby quashed and
set aside. The matter is remanded back to the Joint Commissioner, Central Excise, Bhandara, to provide an opportunity to the assessee to produce
the relevant material on record to determine the question as to whether the duty was actually passed on to the consumers at the rate of 25% from 1st
April, 1989, till the end of February, 1994. However, the order passed by the Joint Commissioner rejecting the claim of the appellant as time barred
shall not be reopened, as it is accepted by the appellant.
The parties to appear before the Joint Commissioner, Central Excise, Bhandara, on 4th June, 2018.
Rule is made absolute in above terms. No order as to costs.