2017 (3) TMI 1602 - AT - Central Excise

Refund of excess duty paid - unjust enrichment - whether the appellant has been failed to pass the bar of unjust enrichment or not? - Held that - As the appellant has filed affidavit in support of their refund claim before the adjudicating authority, the appellant is passed the bar of unjust enrichment, as they have not received the payment from the dealers towards turnover discount which was allowed at the end of the year - appellant entitled to refund - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against rejection of refund claim on grounds of unjust enrichment.

Analysis:
The appellant appealed against the rejection of their refund claim based on unjust enrichment. The appellant cleared goods to customers and provided turnover discounts at the end of the year. They paid duty as per the invoice amount and issued credit notes to buyers for the discounts, on which the refund claims were based. The authorities rejected the claim citing unjust enrichment. The appellant argued that they had agreements with buyers for payments received on account, settling accounts annually after discount determination. They contended that duty was paid on full invoice amounts, not discounted amounts, and referenced a relevant case law. The respondent relied on a different case law, asserting that full duty was charged at invoice issuance, and the appellant failed to prove otherwise regarding payment timing. The main issue was whether the appellant passed the unjust enrichment bar.

Both parties cited case laws to support their arguments. The appellant demonstrated that they paid duty at clearance but did not receive full payments from buyers immediately, settling discounts annually. The ledger amounts and affidavit presented were accepted by authorities, confirming the delayed discount settlement. The appellant's claim that buyers retained amounts for discounts until year-end was uncontested by Revenue. The appellant's affidavit supported their refund claim, showing non-receipt of payments towards discounts. Consequently, the appellant was deemed to have passed the unjust enrichment bar, entitling them to the refund as per the Addison & Co. case law.

The judgment set aside the impugned orders, allowing the appeals with any consequential relief. The decision highlighted the appellant's successful demonstration of non-receipt of discount payments at the time of duty payment, thus justifying the refund claim based on unjust enrichment principles.