2015 (8) TMI 1332 - AT - Central Excise

Rejection of refund claim - refund of excess excise duty paid - section 11B of the act - doctrine of unjust enrichment - Held that - I am of the prima facie view that the refund cannot be denied on the sole ground that issuance of credit note subsequent to clearance of goods cannot be considered as the documentary proof that the incidence of duty has not been passed on - I am of the considered opinion that excess amount of central excise duty for which the refund application has been filed by the appellant is not hit by doctrine of unjust enrichment and the appellant will be eligible for the refund of the same since the incidence of such excess paid duty has been borne by the appellant itself. Therefore the impugned order is set aside and the appeal is allowed in favour of the appellant with consequential benefits - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on doctrine of unjust enrichment.

Analysis:
The appellant cleared goods at a price higher than agreed due to a computer error, resulting in excess Central Excise duty payment. The appellant sought a refund, which was rejected by the Assistant Commissioner and upheld by the Commissioner (Appeals) based on unjust enrichment. The appellant argued that the excess duty was not passed on to the buyer and provided accounting entries and certificates to support this claim.

The Ld. Consultant contended that accounting entries showed the excess duty was not transferred to the buyer, supported by certificates from both parties. The Ld. Consultant referenced judgments to support the refund claim. The Ld. DR argued against the refund, questioning the evidential value of the certificates and citing tribunal decisions.

The Tribunal found that the Range Superintendent's verification report confirmed excess duty payment due to a computer error, and the buyer had not availed cenvat credit. The Tribunal noted the appellant's accounting entries and certificates demonstrated that the excess duty was not passed on to the buyer. The Tribunal referenced judgments supporting the appellant's position and distinguished them from cases cited by the Ld. DR.

The Tribunal concluded that the excess duty refund claim was valid as the duty incidence was borne by the appellant and not passed on to the buyer. The impugned order was set aside, and the appeal was allowed in favor of the appellant with consequential benefits.