2015 (12) TMI 1596 - AT - Central Excise

Refund claims hit by the bar of unjust enrichment in terms of Section 12B - Held that - We find that the Assistant Director (Cost) of the department indicated in his report dated 23-12-2005 that in the year 2003-04 a sum of ₹ 30,35,826/- was deposited as duty under protest. The said amount was shown as loans and advances in the balance sheet. The AD (Cost) further indicated that the costing of some varieties also shows that the cost did not include 15%. In his further report dated 23-2-2006 he stated that the respondent have not passed on incidence of said duty to their customer. We also notice that in this case the respondent is a job worker and showing the excise duty separately in the Excise invoice. Further, the respondent had also submitted a certificate of Chartered Accountants to state that they (respondents) had not recovered excise duty on additional 15% cost of grey fabrics from the customers. There is no legal basis to interfere with the impugned order. No valid ground has been made out in the appeal filed by the Revenue.

Summary

Issues:
Refund claims under Central Excise duty; Unjust enrichment; Interpretation of Section 12B of the Central Excise Act, 1944.

Analysis:
The case involved the appeal by Revenue against the order of Commissioner (Appeals-II), Jaipur, regarding refund claims made by the respondents for excess Central Excise duty paid under protest. The original authority had sanctioned amounts in the Cenvat account and Consumer Welfare Fund but rejected a portion of the claim. The Commissioner (Appeals) allowed the appeals, subject to verification as per law, stating no unjust enrichment. The Revenue appealed this decision.

The Revenue contended that the respondents failed to prove they did not pass on the duty incidence to others, as the buyers were related and documentation was questionable. They argued that duty payment by the respondents alone, especially to another family unit, was not acceptable due to doubtful accounting practices.

The Counsel for the respondent defended the impugned order, asserting its legal correctness and opposing any modification.

Upon examination of the appeal records, the Tribunal focused on whether the claims were affected by unjust enrichment as per Section 12B. The Assistant Director (Cost) reports indicated that the duty paid under protest was not passed on to customers, as evidenced by the balance sheet and costings. The respondent, a job worker, separately showed excise duty in invoices and provided a Chartered Accountant certificate confirming no recovery of excise duty from customers on additional costs.

After considering the facts, the Tribunal found no legal basis to interfere with the impugned order. They concluded that the appeal lacked valid grounds, leading to its dismissal. The decision was pronounced in the open court, upholding the Commissioner (Appeals) order in favor of the respondent.