2007 (3) TMI 619 - AT - Central Excise

Summary

Issues:
Refund claim under Section 11B of the Central Excise Act, 1944 credited to consumer welfare fund; Excess payment of duty due to double calculation of dyeing charges; Failure to establish non-collection of duty incidence from customers; Interpretation of ledger accounts to determine duty collection; Application of unjust enrichment principle.

Analysis:
The case involved a refund claim of Rs. 74,691 under Section 11B of the Central Excise Act, 1944, which was allowed by the adjudicating authority and credited to the consumer welfare fund. The appellant, engaged in job work, had mistakenly taken dyeing charges twice, resulting in an excess payment of duty. Both the adjudicating authority and the Commissioner (Appeals) found that the appellant failed to prove that they had not collected the duty incidence from the customer.

The appellant contended that they issued credit notes to the customer for the excess duty payment and provided ledger accounts to support their claim. The Commissioner (Appeals) observed discrepancies in the invoices and doubted that the entire amount had been paid by the buyers. The appellant cited relevant case laws to support their argument, emphasizing the issuance of credit notes and ledger entries as evidence.

The authorized representative for the respondent reiterated the Commissioner (Appeals) findings, pointing out that the principal company had raised bills reflecting the excess amount, indicating that it had been collected from customers. The appellant was unable to provide evidence that the excess amount was not passed on to the customers, and the ledger entries were used to demonstrate the adjustment of duty amount.

Upon review, the Tribunal found that the appellant had issued credit notes to the customer and produced ledger accounts showing the excess duty amount. The Tribunal noted discrepancies in the Commissioner (Appeals) interpretation of the ledger accounts and cited a previous case to support the appellant's position. The Tribunal concluded that the appellant had not collected the excess amount from customers and set aside the impugned order, remanding the matter back to the Commissioner (Appeals) for further examination and relief as per the law. The appeal was allowed by way of remand.