ORDER :

T.S. SIVAGNANAM, J.

1. The petitioner, a public limited company engaged in the manufacture of industrial fabrics is aggrieved by the order dated 28.05.2003 passed by the Customs, Excise and Gold Control Appellate Tribunal in Final Order No.351-376/2003, in and by which the challenge to the order passed by the Commissioner of Customs and Central Excise (Appeals), Trichy dated 09.10.1997 was unsuccessful. The said order was passed by the first appellate authority confirming the order passed by the Assistant Commissioner, Central Excise Division, Trichy rejecting the refund claim made by the petitioner for refund of a sum of Rs.24,19,932.21.

2. The facts which are relevant for the disposal of the writ petition are noted herein below:

2.1. The petitioner manufactures various industrial fabrics such as rubberised textile fabrics falling under heading 5905.20 of the Central Excise Tariff Act, 1985. They were paying additional duty of excise at the rate of 10% advalorem on the rubberised textile fabrics upto 06.07.1990. As per the Finance Act which came into effect on 31.05.1990, the petitioner was eligible to claim NIL rate of additional duty of excise on the said product. Hence, on 21.07.1990 they filed a refund claim for the additional duty of excise paid by them on rubberised textile fabrics during the period from 31.05.1990 to 06.07.1990. Subsequently, the petitioner had raised credit notes to its customers who have received the goods, for the amount of additional duty of excise collected from them during the period for which refund was claimed by the petitioner. The original authority, namely, the second respondent herein issued a show cause notice to the petitioner calling upon them to state as to why the refund claimed by them should not be credited to the Consumer Welfare Fund in terms of Section 11B(2) r/w. Section 12C of the Central Excise and Salt Act, 1944 [hereinafter referred to as “the Act”]. The second respondent proposed that since the incidence of duty had been passed on to the buyers by the petitioner on the date of clearance of goods, the petitioner ceases to be entitled for refund. The petitioner by contending that though apparently the incidence of additional duty of excise had been passed on to the consumers by issue of invoices, at a later date the same was reversed by issue of credit notes and requested to sanction the refund claimed.

2.2. The second respondent did not accept the stand taken by the petitioner and held that at the time of issue of invoices/gate passes, the petitioner have collected additional duty of excise from the customers during the relevant period amounting to Rs.24,19,932.21 and at a later date at the time of filing the refund claim, the petitioner had produced copies of credit notes stating that the duty collected from the buyers had been refunded to the assessee and hence not entitled for refund claim. The adjudicating authority referred to Section 11B of the Act and held that the amount of duty of excise would be refunded to the assessee if such duty relates to (1) the duty of excise paid by the manufacturer, if he had not passed on the incidence of duty to any other person, (2) the duty of excise borne by the buyer if he had not passed on the incidence of duty to any person and (3) the duty of excise borne by any other such class of applicants as Central Government may by notification in the Official Gazette specify. It was held that since the incidence of duty had been passed on by the assessee to the buyers on the relevant date, they cease to be entitled to the claim of refund and the issue of credit notes subsequently does not alter the position as there is no provision in the amended section for such an undertaking. Further the authority held that since the assessee has collected the sum representing it as excise duty from the buyers at a time when no excise duty was leviable as additional duty of excise, the issue would fall under the purview of Section 11D of the Act accord