2009 (3) TMI 870 - AT - Central Excise

Summary

Issues involved: Dispute over entitlement of dealers' discount for assessable value calculation, rejection of refund claim on grounds of limitation and unjust enrichment.

Entitlement of dealers' discount: The appeal was filed against an Order-in-Appeal passed by the Commissioner of Central Excise, challenging the disallowance of dealers' discount for assessable value calculation. The dispute arose in 1996-97 when the revenue proceeded against the appellants for disallowance of dealers' discount. The Deputy Commissioner, in an order dated 25-4-2003, allowed the deduction of dealers' discount from the assessable value, leading to the appellants filing refund claims. However, the refund claim was rejected on the grounds of limitation and unjust enrichment, as the appellants failed to provide sufficient documentary evidence for quantification. The appellants contended that the duty was paid under protest and not passed on to the dealers, supported by a Chartered Accountant's certificate confirming the same.

Quantification of refund amount: The appellant argued that the Deputy Commissioner had already accepted the deduction of dealers' discount in a previous order, making the quantification clear. The appellants claimed a refund of Rs. 26,55,354/-, which included amounts paid under protest and upheld by the Deputy Commissioner. They asserted that the rejection of the refund claim lacked proper application of mind and should be set aside.

Bar of unjust enrichment: The appellants maintained that the duty paid under protest was not passed on to the dealers, as evidenced by the Chartered Accountant's certificate. They argued that the Deputy Commissioner's rejection of the refund claim on grounds of unjust enrichment was mechanical and lacked appreciation of facts or law. The certificate confirmed that the duty sought for refund had not been passed on to the dealers, negating the unjust enrichment argument.

Conclusion: Upon careful consideration, the Tribunal found that the Deputy Commissioner's previous order had accepted the payment of duty including dealers' discount under protest. The Chartered Accountant's certificate further supported the appellants' claim that the duty amount had not been passed on to the dealers. Consequently, the Tribunal inclined to allow the appeal, granting consequential relief to the appellants.