M/S. PEACOCK INDUSTRIES LTD. versus UNION OF INDIA AND ORS.

Citation: [2022] 11 S.C.R. 220 · Decided: 05-09-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Dismissed

Judgment (excerpt)

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[2022] 11 S.C.R.
M/S. PEACOCK INDUSTRIES LTD.
v.
UNION OF INDIA AND ORS.
(Civil Appeal No. 6144 of 2010)
SEPTEMBER 5, 2022
[M. R. SHAH AND KRISHNA MURARI, JJ.]
Central Excise Act, 1944 – s.173L – Central Excise Rules –
Claim for refund of excise duty – Assessee if entitled to the refund
to the extent of the value of the returned goods – Held: No cogent
evidence was led by the assessee on the value of the returned goods
– Value of the returned goods depend on the defects found in the
manufactured goods which are returned – It varies considering the
defects – Therefore, the assessee has to lead the evidence with respect
to each consignment of the returned goods, which the assessee failed
to prove in the present case – Further, as the value of the returned
goods determined by the Deputy Commissioner at Rs.8 to 10 per kg
is found to be less than the amount of duty already paid, the appellant
is rightly denied the refund of the excise duty paid – Denial of the
refund is in consonance of s.173L(v) – Concurrent findings recorded
by the adjudicating authority, the Tribunal and the High Court on
the value of the returned goods not required to be interfered with in
the present proceeding more particularly when the same was
determined by the Deputy Commissioner/Assessing Authority after
giving opportunity to the assessee – Neither the Deputy Commissioner
nor the Tribunal or even the High Court have committed any error
in rejecting the refund claim of the assessee.
Central Excise Act, 1944 – s.173L – Value for refund u/s.173L
– Held: For the purpose of considering the value for refund u/
s.173L what is required to be considered is the value of the returned
goods – As per explanation to clause (v) of s.173L, “value” means
the market value of the excisable goods and not the exduty value
thereof – Therefore, the submission on behalf of the assessee that
the returned goods may be treated as a raw material and therefore
the “value” of the raw material can be considered for the purpose
of “value” while determining the refund u/s.173L cannot be
accepted.
[2022] 11 S.C.R. 220
220
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Dismissing the appeal, the Court
HELD: 1.1 Neither the Deputy Commissioner nor the
Tribunal or even the High Court have committed any error in
rejecting the refund claim of the assessee. At the outset, it is
required to be noted that after giving an opportunity to the
assessee on the value of the returned goods and considering the
material on record including the market survey report the
Department determined the value of returned goods at Rs.8 to
10 per kg. No cogent evidence was led by the assessee on the
value of the returned goods. The assessee only produced the
invoices with respect to secondary market. However, it is
required to be noted that the value of the returned goods depend
on the defects found in the manufactured goods which are
returned. It varies considering the defects. In some returned
goods the defect might be 5% and in some goods the defect might
be 80% to 90%. Therefore, the assessee has to lead the evidence
with respect to each consignment of the returned goods, which
the assessee failed to prove in the present case. The Department
heavily relied upon the market survey report and thereafter
determined the value of the returned goods as Scrap at the rate
of Rs.8 to 10 per kg. The assessee participated in the proceedings
before the Deputy Commissioner. The assessee neither asked
for copy of the market survey report nor asked for any cross
examination on the market survey report and/or led any cogent
evidence on the value of the returned goods. Such a grievance of
non-supply of market survey report was even not raised before
the learned Tribunal. Therefore, thereafter it is not open for the
assessee to raise the issue with respect to non-supply of the
market survey report for the first time before the High Court.
[Para 3][224-F-H; 225-A-C]
1.2 The submission on behalf of the assessee that as the
returned goods can be reusable for the manufacture of the
products and therefore the value of the raw material can be
considered for the purpose of determination of the value for refund
is concerned the same is not supported by any statutory provision,
more particularly Section 173L of the Central Excise Act and/or
M/S. PEACOCK INDUSTRIES LTD. v. UNION OF INDIA AND
ORS.
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even the Central Excise Rules. Therefore, for the purpose of
co

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