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

Citation: [2016] 9 S.C.R. 591 · Decided: 29-08-2016 · Supreme Court of India · Bench: ANIL R. DAVE · Disposal: Disposed off

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Judgment (excerpt)

(2016] 9 S.C.R. 591 
COMMISSIONER OF CENTRAL EXCISE, MADRAS 
A 
v. 
M/S. ADDISON & CO. LTD. 
(Civil Appeal No. 7906 of2002) 
AUGUST 29, 2016 
[ANIL R. DAVE, AMITAVA ROY AND 
L. NAGESWARA RAO, JJ.] 
Central Excise Act, 1944: 
s.11-B and its proviso - Refund - Unjust enrichment - Refund 
claim in respect of turnover discount on the basis of credit notes -
Maintainability of - Held: Maintainable - Turnover discount shall 
not be disallowed only because they are not payable at the time of 
each invoice - ·However, assessee who did not bear the burden of 
the duty, though entitled to claim deduction on the basis of credit 
notes raised ·by him towards turnover disCXJunt is not entitled for 
refund as he would be unjustly enriched. 
s.ll-B(2), proviso - Word 'buyer' - Connotation of- Held: A 
plain reading of Clauses (d), (e) and (/) of the proviso to s.11-B (2) 
shows that refund to be made to an applicant should be relatable 
only to the duty of excise paid by the three categories of persons 
menti01{e_d therein i.e. the manufacturer, the buyer and a .class of 
applicants notified by the Central Government - Clause (e).to the 
proviso refers to the buyer which is not restricted to the first buyer 
from the manufacturer - The buyer ·mentioned therein can be a buyer 
downstream as well - It might be difficult to identify who hadactually 
borne the burden but such verification would definitely assist the 
Revenue in finding out whether the manufacturer or buyer who 
makes an application for refund are being unjustly enriched. 
s.12-B - Statutory presumption under - Held: There is a 
statutory presumption u/s.12-B that the duty has been passed on to 
the ultimate consumer. 
Disposing of the appeals, the Court 
HELD: 
1. In the instant case, the Assessee has admitted 
that the incidence of duty was originally passed on to the buyer •. 
B 
c 
D 
E 
F 
G 
There is no material to show that the buyer to whom the incidence 
H 
591 
592 
A 
B 
c 
D 
E 
F 
·SUPREME COURT REPORTS 
[2016] 9 S.C.R. 
of duty was passed on by the Assessee did not pass it on to any 
other person. There is a statutory presumption under Section 
12-B of the Act that the duty has been passed on to the ultimate 
consumer. It is clear from the facts that the duty which was 
originally paid by the Assessee was passed on. The refund claimed 
by the Assessee is for an amount which is part of the excise duty 
paid earlier and passed on. The Assessee who did not bear the 
burden of the duty, though entitled to claim deduction, is not 
entitled for a refund as he would be unjustly enriched. [Para 16) 
(604-G-H; 605-AJ 
2. The si11e qua 11011 for a claim for refund as contemplated 
in Section 11-B of the Act is that the claimant has to establish 
that the amount of duty of excise in relation to which such refund 
is claimed was paid by him and that the incidence of such duty 
has not been passed on by him to any other perso11. Section 11-B 
(2) provides that, in case it is found that a part of duty of excise 
paid is refundable, the amount shall be credited to the Consumer 
Welfare Fund established under Section 12-C. There is a proviso 
to Section 11-B (2) which postulates that the amount of excise 
duty which is refundable may be paid to the applicant instead of 
being credited to the fund, if such amount is relatable to the duty 
of excise paid by the manufacturer and he had not passed on the 
incidence of such duty to any other person. Clause (e) to proviso 
of Section 11-B (2) also enables the buyer to receive the refund if 
he had borne the duty of excise, provided he did not pass on the 
incidence of such duty to any other perso11. The third category of 
a class of applicants who may be specified by the Central 
Government by a notification in the official gazette are also entitled 
for refund of the duty of excise. A plain reading of Clauses (d), 
(e) and (t) of the proviso to Section 11-B (2) shows that refund to 
be made to an applicant should be relatable only to the duty of 
excise paid by the three categories of persons mentioned therein 
·i.e. the manufacturer, the buyer and a class of applicants notified 
G 
by the Central Government. Clause (e) refers to the buyer which 
is not restricted to the first buyer from the manufacturer. The 
buyer mentioned in the above Clause can be a buyer downstream 
as well. The word 'buyer' in Clause (e) to proviso to Section 
11-B (2) of the Act cannot be restricted to the first buyer from 
H 
COMMISSIONER OF CENTRAL E

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