2012 (10) TMI 381 - AT - Central Excise

Refund claim of duty paid on transportation charges - revenue contention that refund claims filed were barred by limitation - Held that - The assessee addressed the communication to the Asstt. Commissioner for treating the assessment as provisional. Merely because the Asstt. Commissioner did not pass the order for provisional assessment cannot be held to be deterrent to the assessees stand. It was the duty of proper officer to accept the above request for treating the assessment provisional and to pass appropriate orders. The lapse on the part of the Asstt. Commissioner cannot be taken as a ground by the Revenue for treating the demands as barred by limitation thus the refund claims are not hit by bar of limitation - in favour of assessee.

Summary

Issues:
1. Whether the refund claims filed by the respondents were barred by limitation.
2. Whether the principle of unjust enrichment applies in the case.

Analysis:
1. The appeals involved a common issue of refund claims filed by the manufacturer of cylinders for duty paid on transportation charges. The original adjudicating authority rejected the refund claim, but the Commissioner (Appeals) allowed it. The Revenue challenged this decision, arguing that the refund claims were barred by limitation. The Commissioner (Appeals) held that the assessments were deemed provisional based on documentary evidence, even though no specific order for provisional assessment was issued by the proper officer. The Commissioner reasoned that the failure of the Assistant Commissioner to pass the order for provisional assessment did not make the assessments final, thus the refund claims were not time-barred. The Tribunal agreed with the Commissioner's decision, emphasizing that the Revenue's argument based on the Assistant Commissioner's lapse was not a valid ground to treat the demands as barred by limitation.

2. Regarding the principle of unjust enrichment, the Commissioner (Appeals) found that the adjustment in prices was not done through credit notes but through final adjustments from pending bills raised on a provisional basis. The Commissioner noted that the end customers did not avail Modvat credit on the duty paid by the manufacturer, and the duty element was not passed on to retail customers. The Tribunal concurred with the Commissioner's findings, stating that the Revenue failed to provide evidence to rebut the stand taken by the manufacturer that the prices received were exclusive of Central Excise duty. Consequently, the Tribunal rejected the Revenue's appeals, upholding the decision of the Commissioner (Appeals) on the grounds of limitation and unjust enrichment.