2007 (5) TMI 118 - AT - Central Excise

Refund claim - Revenue contended that respondent is not entitle for refund on the ground that goods were dispatched twice but returned as being undelivered - Held that the respondent has followed the provision of 173L of CER and allowed the refund

Summary

Issues:
Refund claim rejection, unjust enrichment applicability, Rule 173L application, burden of proof on duty passing, adherence to Tribunal's law.

Refund Claim Rejection:
The appeal challenged the Order-in-Appeal allowing the respondent's appeal against the rejection of their refund claim. The refund was sanctioned without considering unjust enrichment, which the Revenue argued was not addressed. The Commissioner (A) found that as the goods were not sold to the original customer, the duty incidence did not pass. The appellant's case aligned with a Tribunal decision where goods were returned, no complete sale occurred, and duty was not passed on. The Commissioner's order was upheld as just and proper, dismissing the Revenue's appeal.

Unjust Enrichment Applicability:
The central issue was whether unjust enrichment applied to the refund claim. The Commissioner (A) found that as per Rule 173L, duty reimbursement through credit notes indicated no duty incidence passing to consumers. The burden of proof on duty passing rests on the assessee initially, shifting to Revenue if the assessee demonstrates no duty incidence transfer. In this case, the burden was discharged by the assessee, and the Revenue failed to rebut it. The Commissioner's decision on no duty passing was deemed correct and upheld.

Rule 173L Application:
The case involved goods returned under Rule 173L, which exempts duty incidence transfer if goods are rejected and subsequently cleared after duty payment. The Commissioner (A) correctly applied this rule, stating that duty was reimbursed via credit notes, indicating no duty passing. The Tribunal's law on Rule 173L was followed, supporting the Commissioner's decision.

Burden of Proof on Duty Passing:
The burden to show no duty incidence passing initially lies with the assessee, shifting to Revenue upon demonstration. In this case, the assessee proved duty reimbursement through credit notes, shifting the burden to Revenue, which failed to provide evidence of duty passing. The Commissioner's finding on no duty passing was upheld as correct.

Adherence to Tribunal's Law:
The Commissioner (A) correctly followed the Tribunal's law on no duty passing in cases of returned goods under Rule 173L. The Tribunal upheld the Commissioner's decision as just and proper, dismissing the Revenue's appeal. The judgment emphasized adherence to established legal principles and Tribunal decisions.

In conclusion, the appellate tribunal upheld the Commissioner's decision, dismissing the Revenue's appeal against the refund claim rejection. The judgment focused on the application of unjust enrichment, Rule 173L, burden of proof on duty passing, and adherence to Tribunal's law, ensuring a thorough analysis of legal principles and precedents in resolving the issues at hand.