2010 (11) TMI 943 - AT - Central Excise

Summary

Issues Involved:
1. Time-barred refund claims u/s 11B of the Central Excise Act.
2. Unjust enrichment in refund claims.
3. Admissibility of refund claims on merits.
4. Interest on refunded duty.

Summary:

1. Time-barred refund claims u/s 11B of the Central Excise Act:
The first set of three refund claims for the months of October to December 1996, amounting to Rs. 70,02,051/-, were found to be beyond the period of six months prescribed u/s 11B of the Central Excise Act and hence rejected as time-barred by the Assistant Commissioner, a decision confirmed by the Commissioner (Appeals). The assessee's contention that the assessments were provisional and thus not subject to the limitation period was dismissed due to a lack of evidence. Consequently, the assessee's appeal was dismissed.

2. Unjust enrichment in refund claims:
In the Revenue's appeal, the refund claims for the period January to June 1997, amounting to Rs. 1,07,98,905/-, were challenged on the grounds of unjust enrichment. The goods were stock-transferred from the factory to the depot and then cleared to buyers with a higher discount, which was not separately indicated in the invoices. The Revenue argued that the issuance of credit notes post-clearance did not alter the fact that the duty burden was passed on to the buyers at the time of clearance. The Tribunal upheld the view that the statutory presumption u/s 12B of the Act was not rebutted by the assessee, and thus, the refund claims were barred by unjust enrichment. The Revenue's appeal was allowed.

3. Admissibility of refund claims on merits:
The Revenue contended that the payment made on goods at the factory gate was based on the assessable value declared under Rule 173C (3) of the Central Excise Rules, 1944, and the revised price declarations filed later did not have retrospective effect. The Tribunal noted that the Commissioner (Appeals) had already held that Section 11B of the Act was independent of Rule 173C, allowing the assessee to claim a refund notwithstanding the rule. However, the Tribunal found no evidence supporting the issuance of credit notes by the assessee to their buyers, thus maintaining the statutory presumption of duty burden transfer u/s 12B.

4. Interest on refunded duty:
Appeal E/3108/06 filed by the Revenue challenged the order of the Commissioner (Appeals) dated 21.7.2006, which allowed a claim for interest on the refunded duty amount of Rs. 1,07,98,905/-. The Revenue argued that the refund itself was unsustainable. The Tribunal, having already set aside the order of refund, allowed this appeal as well.

Disposition:
All the appeals and the Cross Objection were accordingly disposed of.