2009 (6) TMI 745 - AT - Central Excise

Summary

Issues:
Grant of refund to the respondent by lower appellate authority, denial of cash refund on the ground of unjust enrichment, burden of proof on the department in relation to the refund claim, statutory presumption working in favor of the Revenue, admissibility of refund claim, remand to the original authority for further proceedings.

Analysis:
The appeal pertains to the grant of a refund to the respondent by the lower appellate authority. The respondent had paid a differential duty under protest for certain excisable goods cleared during 1999-2002. The dispute between the party and the department led to litigation, resulting in a favorable decision for the assessee. Subsequently, a refund claim was filed under Section 11B of the Central Excise Act. The original authority issued a show-cause notice proposing to deny cash refund based on unjust enrichment, which was contested by the party. The Deputy Commissioner sanctioned a refund claim but credited the amount to the Consumer Welfare Fund due to the unjust enrichment issue. The party appealed to the Commissioner (Appeals), who allowed the appeal with consequential relief. The appellate authority found that the assumption of the department regarding unjust enrichment was baseless as the duty was paid subsequently and shown as expenses in the balance sheet, indicating no unjust enrichment.

In the present appeal, the appellant argued that the burden of proof was wrongly placed on the department by the Commissioner (Appeals) regarding the refund claim. The burden, as per the appellant, lies on the claimant to prove that the duty incidence was not passed on to others. The appellant cited judgments and statutory provisions to support their contention. The appellant highlighted that the amount of differential duty was shown as an expenditure in the respondent's records, reinforcing the statutory presumption favoring the Revenue. The JCDR referred to a specific case where a similar claim for refund was disallowed due to unjust enrichment.

The Tribunal considered both parties' arguments and found that the burden of proof was incorrectly placed on the department by the lower appellate authority. The Tribunal noted that the party had only submitted their balance sheet as evidence, showing the duty amount as an expenditure. To ensure justice, the Tribunal decided to remand the case to the original authority for further proceedings. The appeal was allowed, and the matter was directed to be reconsidered by the original authority, providing the party with an opportunity to present additional evidence and be heard.

In conclusion, the Tribunal's decision focused on the burden of proof regarding unjust enrichment in refund claims, emphasizing the need for proper evidence and adherence to statutory provisions. The case was remanded for a fresh decision, ensuring a fair opportunity for both parties to present their arguments and evidence.