2009 (12) TMI 641 - AT - Central Excise

Unjust enrichment - claim of refund - Held that - Commissioner (Appeals) has recorded a finding that the Central Excise invoice issued by the appellant did not show that duty element separately in absence of duty element shown separately in the Central Excise invoice and in view of the fact that Chartered Accountant s certificate certifying that respondent did not collect duty and the decisions of the Tribunal cited by the learned Chartered Accountant no merit in the appeal filed by the Revenue and the same has to be rejected.

Summary

Issues:
1. Applicability of unjust enrichment clause to the claim of refund.
2. Interpretation of job charges inclusive of duty under compounded levy scheme.
3. Relevance of Chartered Accountant's certificate in proving non-collection of duty.
4. Application of Section 11B to refund of duty paid in excess.
5. Admissibility of balance sheet as evidence in refund claims.
6. Requirement of duty element shown separately in Central Excise invoice.

Analysis:
1. The main issue in this case revolved around the applicability of the unjust enrichment clause to the claim of refund amounting to Rs. 6,80,742. The Commissioner (Appeals) had ruled in favor of the respondent, stating that unjust enrichment did not apply to the claim. The appellant contended that the job charges inclusive of duty should not exempt them from proving non-passing on of duty incidence to buyers.

2. The learned SDR argued that the Commissioner's view was flawed as job charges inclusive of duty should trigger the application of unjust enrichment. He cited a Tribunal decision in M/s. Bhilwara Processors (P) Ltd. v. CCE, Jaipur, emphasizing the need for appellants to demonstrate non-passing on of duty under compounded levy scheme to buyers.

3. On the respondent's side, Shri Mukund Chauhan, a Chartered Accountant, highlighted the submission of a certificate certifying non-collection of duty and the inclusion of the refund amount in the balance sheet as receivable. He referenced Tribunal decisions in support, such as Kothi Steel Ltd. v. CCE, Vadodara and CCE, Mumbai v. Shree Ram Textile & Processing Mills (I) P. Ltd., to argue that Section 11B applied to actual clearances of goods, not to duty under compounded levy schemes.

4. The Tribunal noted conflicting decisions but leaned towards the respondent due to the Chartered Accountant's certificate and the amount shown in the balance sheet. The Tribunal emphasized the necessity for Revenue to reject these documents if deemed invalid. The adjudicating authority's failure to provide clear reasons for rejecting the arguments raised by both parties weakened the Revenue's case.

5. The absence of a separate duty element in the Central Excise invoice and the limited utility of the balance sheet as evidence were discussed. The balance sheet primarily supported the Chartered Accountant's certificate, reinforcing the respondent's position. The Tribunal found no merit in the Revenue's appeal, leading to its rejection.

6. In conclusion, the Tribunal upheld the Commissioner (Appeals)'s decision, emphasizing the importance of valid documentation, such as the Chartered Accountant's certificate and balance sheet, in refund claims involving duty payments under compounded levy schemes. The judgment highlighted the need for clear reasoning in adjudicating refund disputes and the significance of proper documentation to support claims and counterclaims.