Page 202 - ELT_1st July 2020_Vol 373_Part 1

112 EXCISE LAW TIMES [ Vol. 373

5. Perused the case record, it is observed that Learned Commissioner
(Appeals) had rejected the order of refund passed by the Deputy Commissioner,
Central Excise, Kurla-Vikhroli Division, Mumbai-II on the ground that instead of
verifying the fact of not passing of incidence of duty on the customers itself he
got it verified by the Range Superintendent and believed the report submitted by
him. Further ground of rejection of refund is that appellant failed to produce
such verification report during the appeal proceeding, for which he took no cog-
nizance of the Range Superintendent report. These two findings seems to be con-
tradictory and vague. First, there is no rule prescribed that in adjudication pro-
ceedings, documentary evidence that to of a public nature, was not to be accept-
ed without examining the source, on the basis of which such documents has been
prepared. Second, if the said document is not to be accepted, then there is no
point in throwing the blame on the appellant for its failure to produce the same
before him which, admittedly was a departmental report and could not be possi-
bly accessed by the appellant unless supplied to it by the Department.
6. Surprisingly, Learned Commissioner (Appeals) got the reason to be-
lieve on his own that when the tax paid on protest was not shown as receivables
in the books of account, the same is deemed to have been recovered from the cus-
tomer, for which he ignored the Chartered Accountant certificate submitted by
the appellant. To the best of my knowledge no such thing can automatically oc-
cur and at no point of time the incidence of duty could be realised from the float-
ing or even the same customer, who had not earlier paid the duty as not sought
by the appellant in its invoices at the time of sale. Therefore, production of sam-
ple invoices before the Commissioner (Appeals) could have been sufficed to es-
tablish that tax was not collected from the customer. Even if that was rejected for
non-production of each and every sale record, it is very much clear from the
show cause notice and various orders passed in the last 22 years of proceedings
of this case that provisional order was passed by the Commissioner of Central
Excise demanding duty on production capacity of the appellant manufacturing
unit as per Textile Processors Annual Capacity Determination Rules, 1998 and
not on sale invoices. Moreover, the said duty was demanded for the prior period.
It would have been taken into the consideration by the Commissioner (Appeals)
to opine that duty was not the collected at the first instance. Moreover, there is
no proof available on the record that duty was specifically collected in a future
date from those customers or from the intended future buyers. Apparently
amount of duty paid can also not be shown in the book of accounts as receivable
because the duty was demanded way back in 1999 and the show cause notice of
such duty demand was dropped on 30-9-2003. Furthermore every expenditure
made by the manufacturing company may not necessarily be recovered from the
customer as it is beyond once capability to trace out after laps of a decade as to if
such amount could be/was absorbed in the exact cost of manufacturing of final
product since price of a product can’t remain static in all those years as observed
in the decision recorded by the Tribunal in the case of M/s. Ring Plus Aqua Ltd. v.
Commissioner of Central Excise & Customs, Nasik reported in 2019 (370) E.L.T. 1364
(Tri. - Mumbai). It is not invariably true that when any amount is shown as ex-
penditure or any expenditure is required to be made, the same has to be ab-
sorbed in costing of final product unless there is a proof that pricing of the final
product has been specifically increased on that score, since there are various
mechanisms available before the manufacturer to absorb the cost, say, by way of
reducing profit margins of its sale, overhead expenditures of the company, etc.

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