2009 (3) TMI 779 - AT - Central Excise

Refund of excess duty paid - price variation clause in the supply orders - time Limitation - Provisional assessment - unjust enrichment -

Issues Involved:
1. Time-barred Refund Claim
2. Unjust Enrichment

Detailed Analysis:

1. Time-barred Refund Claim:
The appellant, a manufacturer of conductors, entered into contracts with AVVNL and JVVNL, which included a price variation clause. The appellant supplied conductors during June-August 2005 and paid duty based on the contract prices. Post-supply, AVVNL and JVVNL reduced the prices and adjusted the overpaid amounts from subsequent payments. The appellant filed a refund claim on 22-6-06 for the excess duty paid. The Assistant Commissioner rejected Rs. 38,745/- as time-barred and sanctioned Rs. 36,192/- but credited it to the Consumer Welfare Fund due to unjust enrichment.

The appellant argued that the assessments should be treated as provisional due to the price variation clause, even without a formal request or order for provisional assessment. They cited Tribunal judgments where assessments were deemed provisional despite the absence of Rule 9B procedures. However, the Department contended that without a formal request and order for provisional assessment, the claim is time-barred, citing Supreme Court judgments requiring an order under Rule 9B for provisional assessments.

The Tribunal concluded that in the absence of a formal request and order for provisional assessment, the assessments cannot be treated as provisional. Therefore, the refund claim is subject to the limitation period under Section 11B of the Act. The rejection of the refund claim of Rs. 38,745/- on the ground of time bar was upheld.

2. Unjust Enrichment:
The appellant contended that there was no unjust enrichment as the excess amount, including duty, was deducted from subsequent payments by AVVNL and JVVNL. They provided certificates from AVVNL and JVVNL confirming that the appellant was reimbursed based on the reduced price. The appellant cited several judgments supporting that when the price is reduced and the duty is reimbursed accordingly, there is no unjust enrichment.

The Department argued that once the duty incidence is passed to the customer, subsequent adjustments do not negate unjust enrichment. They cited Tribunal judgments supporting this stance.

The Tribunal noted a fundamental difference between the present case and the cited cases by the Department. In the present case, the price variation clause resulted in payments being adjusted post-clearance, effectively meaning the appellant received payment at the reduced rate. The Tribunal found that the appellant had not passed on the duty incidence to AVVNL and JVVNL, as evidenced by the certificates provided. The Tribunal held that the burden of proof under Section 12B was discharged by the appellant.

The Tribunal referenced the judgment of the Rajasthan High Court in Union of India v. A.K. Spintex Ltd., which held that the burden of proof under Section 12B is rebuttable and can be shifted to the Revenue if the assessee provides evidence of not passing on the duty incidence. The Tribunal concluded that the appellant had successfully rebutted the presumption of unjust enrichment.

The impugned order crediting Rs. 36,191/- to the Consumer Welfare Fund was set aside, and the Department was directed to refund this amount to the appellant.

Conclusion:
The appeal was disposed of with the rejection of the refund claim of Rs. 38,745/- on the ground of time bar upheld, and the order crediting Rs. 36,191/- to the Consumer Welfare Fund set aside, directing the Department to refund this amount to the appellant.

← Previous Next →