The Madras High Court has dismissed appeals filed by TVS Motor Company Limited, holding that the assessee must furnish verifiable evidence to rebut the statutory presumption that excise duty burden has been passed on to the ultimate consumer.
The Bench of Justice G. Jayachandran and Justice Shamim Ahmed upheld the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which had remanded the matter back to the adjudicating authority for fresh verification of facts.
The case arose from excise duty abatements claimed by TVS Motor Company on discounts extended to its dealers. Due to practical difficulties in quantifying such abatements at the time of clearance of goods, the company had opted for provisional assessment. However, the department denied the abatements on the ground that the burden of duty may have been passed on.
While the assessee initially succeeded before the CESTAT in 2016, the Revenue challenged the decision, relying on the Supreme Court’s ruling in Commissioner of Central Excise vs Addison & Co. Ltd., which mandates strict verification of whether the duty incidence has been passed on to buyers.
The CESTAT, in its subsequent order, applied the principle laid down in Addison & Co. and emphasized that the presumption under Section 12B of the Central Excise Act, 1944 operates against the assessee. It held that merely issuing credit notes to dealers is insufficient to establish that the burden of duty was not passed on.
Significantly, the Tribunal directed that the verification must extend beyond the manufacturer and dealers to include ultimate buyers, as the burden of duty is presumed to have been passed down the supply chain. The matter was accordingly remanded for fresh adjudication with liberty to the assessee to produce supporting evidence.
The High Court held that the statutory presumption under Section 12B is a critical factor and cannot be lightly disregarded. It observed that when an assessee claims otherwise, the onus squarely lies on them to rebut the presumption with cogent and verifiable data.
The Court rejected the argument that the existence of certain materials or credit notes was sufficient proof of non-passing of duty burden. It emphasized that without concrete and verifiable evidence tracing the incidence of duty up to the ultimate consumer, the claim for abatement or refund cannot be allowed.
The Bench further noted that the remand ordered by the CESTAT was appropriate and necessary to ensure compliance with the Supreme Court’s mandate in Addison & Co.
Concluding that no substantial question of law arose for consideration, the High Court dismissed the appeals filed by TVS Motor Company. It also directed the adjudicating authority to complete the fresh adjudication within four months, in line with the Tribunal’s directions.
Case Details
Case Title: TVS Motor Company Limited Versus The Commissioner of GST and Central Excise
Citation: JURISHOUR-1073-HC-2026(MAD)Â
Case No.: CMA No. 735 of 2026 and CMA NO. 783 OF 2026
Date: 21-04-2026
Counsel For Petitioner: Raghav Rajeev
Counsel For Respondent: Rajendran Raghavan
