2015 (6) TMI 1062 - AT - Central Excise

Refund claim - Unjust enrichment - appellant inadvertently calculated excise duty on an incorrect MRP - distribution centers of the principal manufacturer charged correct price from the retailers at the rate of 65 per sachet only and no excess excise duty was recovered from the final customers - debit note furnished before the refund sanctioned authority clearly demonstrate one to one correlation of all invoices and the excise duty paid thereon Held that - the observations in the impugned order that no evidence of stock transfer invoices have been provided by the Appellants is not appreciated in view of stock transfer invoices enclosed to the appeal paper book and also placed along with the refund claim. Further on perusal of the appeal papers it is found that upon examination of records of the Appellant the Chartered Accountant firm M/s Anay Gogte & Co. vide their Certificate dated 01.02.2014 have certified that there were no sale of goods by the Appellants to the Principal Manufacturer and the Appellants have not received the excess excise duty paid inadvertently. Therefore I am of the view that the authorities below have not properly scrutinized the records in arriving at the conclusion that the incidence of Central Excise duty has been passed on by the appellant. Hence the refund claim filed by the appellant is not hit by the doctrine of unjust enrichment as the excess amount of duty has not been passed on by the appellant to any other person. - Decided in favour of appellant with consequential relief

Summary

Issues:
Rejection of refund claim on the ground of unjust enrichment.

Analysis:
The case involved the rejection of a refund claim based on unjust enrichment. The appellant had entered into a Contract Manufacture Agreement with a principal manufacturer and inadvertently calculated excise duty on an incorrect MRP. The appellant paid duty based on a higher MRP, which was later rectified by the manufacturer through a debit note. The appellant filed a refund application, which was rejected by the Assistant Commissioner and upheld by the Ld. Commissioner (Appeals). The appellant appealed to the Tribunal against this decision.

The appellant argued that the distribution centers of the principal manufacturer charged the correct price from the retailers and no excess excise duty was recovered from the final customers. They provided evidence to show a one-to-one correlation of all invoices and the excise duty paid. The appellant also presented a certificate from a Chartered Accountant stating that there was no sale of goods to the principal manufacturer and that the excess excise duty was not received by the appellant. The appellant relied on previous judicial decisions to support their argument that the doctrine of unjust enrichment did not apply in this case.

On the other hand, the respondent contended that the duty incidence had not been satisfactorily discharged by the appellant, justifying the rejection of the refund claim on the ground of unjust enrichment.

After considering the arguments and evidence presented by both parties, the Tribunal found that the appellant had not passed on the excess amount of duty to any other person. The Tribunal noted that the distribution centers charged the correct price, and there was no evidence of excess duty being recovered from customers. The Tribunal also highlighted the detailed comparison of invoices and the certificate from the Chartered Accountant, which supported the appellant's claim. Therefore, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant, granting them the benefit of a refund.