2014 (5) TMI 1096 - AT - Central Excise

Refund claim - requirement to pay duty on the waste and scrap generated at the job worker s premises - unjust enrichment - Held that - As decided in assessee s own case 2011 (9) TMI 139 - CESTAT MUMBAI the respondents are not required to pay duty on the waste and scrap generated at the job worker s premises. Therefore hold that the respondents have paid duty on the scrap generated at the jobworker s premises wrongly and they are entitled for the refund claim. Further find that the Commissioner (Appeals) have examined the issue of unjust enrichment which has been supported by the respondents through the certificate issued by the C.A. and the balance sheet where the amount has been shown as receivable from the department. In these circumstances hold that the respondents have passed the bar of unjust enrichment. - Decided against revenue

Summary

Issues:
1. Refund claim rejection based on duty payment on scrap.
2. Unjust enrichment in refund claim.
3. Appeal against the impugned order for refund claims.

Analysis:
1. The case involved the rejection of refund claims by the revenue, as the respondents had paid duty on scrap generated during manufacturing, which was later realized to be unnecessary. The adjudicating authority rejected the refund claim, stating correct duty payment and unjust enrichment. However, the learned Commissioner (Appeals) held that duty was not required on scrap from job workers and that the respondents had shown the duty paid on scrap as receivable in the balance sheet, supported by a C.A. certificate. The Tribunal found in favor of the respondents, stating they wrongly paid duty on scrap and were entitled to the refund claim.

2. The issue of unjust enrichment was raised, with the Revenue contending that the balance sheet was not produced before the adjudicating authority, leading to the rejection of the refund claims. The respondents argued that in a previous case, it was held that duty was not required on scrap from job workers. They provided a C.A. certificate and balance sheet to demonstrate that duty paid on scrap was not passed on to buyers. The Tribunal found that the respondents had met the requirement of unjust enrichment by producing evidence, including the C.A. certificate and balance sheet, showing the amount as receivable from the department.

3. The appeal against the impugned order for refund claims centered on the duty payment on scrap issue and the unjust enrichment aspect. The Tribunal upheld the decision of the learned Commissioner (Appeals), emphasizing that duty was not required on scrap from job workers, and the respondents had adequately demonstrated the absence of unjust enrichment through the balance sheet and C.A. certificate. Consequently, the Revenue's appeals were dismissed for lacking merit, affirming the respondents' entitlement to the refund claim.