2011 (3) TMI 1443 - HC - Central Excise

Refund of excess excise duty paid - bar of limitation - unjust enrichment - assessee offered discounts to their customers - refund claim made on 29-11-2001 was in-time. Because the Department pointed out certain defects and called for certain documents, instead of complying with the said request the assessee withdrew the claim on 20-7-2002 with an intention to file a fresh claim with all the necessary documents. - Held that - when a fresh claim is made on 7-3-2002 the limitation is to be computed from that day. If limitation is to be computed from that day the claim for refund from 1-1-2002 up-to 6-3-2002 was clearly barred by time. However, the claim for refund from 7-3-2002 up-to 31-3-2002 was well within the time. Therefore though the authorities justified in holding that claim is barred by time to the extent of rejecting the claim from 7-3-2001 to 31-3-2001, the said order is incorrect. To that extent, the order passed by the authorities requires to be modified. Refund - assessee levied and collected excise duty on a higher rate. Depending on the performance of customers/dealers he has passed on the benefit of deduction in the price of the goods. Corresponding excise duty payable is also reduced. He has raised the credit notes and passed on the said benefit to the customer Held that - burden of higher excise duty which he has paid for is not passed on to the customers, assessee entitled to refund of excess demand

Summary

Issues Involved:
1. Continuation of refund claim after withdrawal and refiling.
2. Entitlement to refund of excise duty based on credit notes issued after clearance of goods.

Issue-wise Detailed Analysis:

Point No. 1: Continuation of Refund Claim After Withdrawal and Refiling
The primary issue was whether a fresh claim for refund, filed after withdrawing an earlier defective claim, could be treated as a continuation of the original claim. The assessee initially filed a refund claim on 29-11-2001 for the period from 1-11-2000 to 31-3-2001, which was within the stipulated time. However, upon being notified of defects and the need for additional documents by the revenue, the assessee chose to withdraw this claim on 27-2-2002 and subsequently filed a fresh claim on 6-3-2002, acknowledged on 7-3-2002. The court held that the new claim filed on 7-3-2002 could not be considered a continuation of the earlier claim. It was deemed a fresh claim, and therefore, the limitation period had to be computed from the date of the new filing. Consequently, the claim for the period from 1-11-2000 to 7-3-2001 was barred by time, while the claim from 8-3-2001 to 31-3-2001 was within the time limit.

Point No. 2: Entitlement to Refund of Excise Duty Based on Credit Notes Issued After Clearance of Goods
The second issue revolved around whether the assessee was entitled to a refund of excise duty when credit notes were issued after the clearance of goods, thereby not passing on the burden of the higher excise duty to customers. The court examined Section 11-B of the Central Excise Act, which mandates that the incidence of duty should not have been passed on to any other person for a refund claim to be valid. The court emphasized the doctrine of unjust enrichment, which prevents a person from collecting duty from both the purchaser and the state. The burden of proving that the duty was not passed on lies with the assessee. The court found that the Tribunal erred in relying on the CESTAT judgment in Addison's case, which had been set aside by the Madras High Court. The Tribunal should have acknowledged the High Court's decision despite the pending appeal in the Apex Court. Thus, the court ruled that the assessee was entitled to a refund for the period from 8-3-2001 to 31-3-2001 and the entire period from 1-4-2001 to 31-12-2001, as the burden of duty was not passed on to the customers.

Conclusion:
1. The appeal is partly allowed.
2. The rejection of the claim for the period from 1-11-2000 up to 7-3-2001 is upheld as barred by time.
3. The assessee is entitled to a refund of excess demand made from 8-3-2001 to 31-3-2001.
4. The entire claim for the period from 1-4-2001 to 31-12-2001 is within time, and the claimant is entitled to a refund.