Full Judgment
2. When the matters were called, no one was present on behalf of any of the respondents in spite of notices. We therefore, heard Shri H.K.Jain, ld. SDR, and perused the records. Shri Jain submitted that M/s.
Dynomac Pumps, respondent in Appeal No. E/1216/96-C, manufacture parts of pumps which were used captively in the manufacture of agricultural pumps. The other respondents manufactured HOPE tapes which were used in the manufacture of HDPE sacks; that duty paid on the intermediate product became part of the duty on manufacture of final product and as such incidence of duty has been passed on to the buyers, the principle of unjust enrichment applies and it does not make any difference whether the duty has been passed on directly or indirectly. He further submitted that as the HDPE tape is an intermediate product of HDPE sacks, there is no difficulty in ascertaining as to how much duty paid on the tapes, has been passed on to the buyers of HDPE sacks and therefore, even in the ratio of Solar Pesticides 1992 (57) E.L.T. 201], it will not be difficult for the buyers of the HDPE sacks to claim the refund of duty. Finally he mentioned that the Supreme Court, in the case of Union of India v. Bombay Tyres International Ltd. 1983 (14) E.L.T. 1896, has held that all the costs incurred to make the goods complete and marketable are to be included in the assessable value.
This makes it clear that the duty paid on the tapes must have formed part of the assessable value of HDPE sacks and as incidence of duty has been passed on to the buyers, the refund is not admissible to the respondents.
3. We have gone through the submissions of the ld. SDR and perused the records. We observe that the Collector, in the impugned order, has rejected the Department's appeal filed before him following the decision of the Bombay High Court in the case of Solar Pesticides Ltd. v. U.O.I. (supra). This Tribunal has followed the ratio of this decision in a large number of cases. The Bombay High Court has held that where the importer used the goods himself, there is no question of passing on incidence of duty to anyone else since the goods imported are not sold to anyone else. Hence he gets the refund. The Bombay High Court further held that the Scheme of Unjust Enrichment introduced by amendment of the Act envisages the direct transfer of burden of duty along with the sales of the same goods, which were imported to the buyers. In the case of captive consumption, the duty paid on the raw material becomes part of the cost of manufacture of the new items and it will not be possible for the buyers of the finished product who claim the refund of duty as provided in proviso (e) to Section 11 B (2) of the Central Excise Act. Following the ratio of the Bombay High Court decision, we reject all the appeals filed by the Revenue.