2012 (12) TMI 223 - AT - Central Excise

Refund claim - goods cleared to 100% EOU - unjust enrichment Held that - Certificate given by the buyer of the respondent that no excise duty was paid by them to the respondent - as the respondent was entitled to clear the goods without payment of duty and it was only on account of delay in permission on the part of the department - Merely because the duty element stands reflected in the excise invoices, by itself, cannot be the basis to hold that such excise duty was recovered by them from their customer, who is 100% EOU and such, is not liable to pay excise duty - respondent cannot be called upon to establish by other evidence that the said duty has not been passed on to their buyer refund allowed

Summary

Issues:
Refund claim allowed by Commissioner (Appeals) - unjust enrichment - Duty recovery presumption - Certificate by buyer - Appeal against Commissioner (Appeals) order.

Analysis:
The case involves a dispute regarding a refund claim of Rs. 4,18,527/- allowed by the Commissioner (Appeals) to the respondents, who are engaged in the manufacture of Essential Oil Attar. The respondents cleared goods to a 100% EOU without permission due to non-response from the department and paid duty under cover of ARE-1. Subsequently, they filed a refund claim stating that duty payment was not required as goods were cleared to a 100% EOU. The original authority allowed the refund but rejected it on grounds of unjust enrichment.

On appeal, the Commissioner (Appeals) acknowledged that the respondents were forced to clear goods with duty payment to the EOU due to the department's delay in granting permission. The Commissioner held that unjust enrichment provisions do not apply in this case, especially considering a certificate from the EOU stating no excise duty was paid to the respondents. The Revenue appealed this order.

The Revenue contended that since duty elements were reflected in the invoices, it must be presumed that duty was recovered from the buyer. However, the certificate from the EOU clearly stated otherwise. The Tribunal noted that the certificate explicitly mentioned that no excise duty was paid to the respondents, which was not disputed by the Revenue. The Tribunal emphasized that the duty payment was due to the department's delay in granting permission, and the duty element on invoices alone cannot establish duty recovery from the buyer.

In conclusion, the Tribunal upheld the Commissioner (Appeals) order, rejecting the Revenue's appeal. The decision was based on the clear evidence provided by the certificate from the EOU, which established that no excise duty was paid to the respondents. The Tribunal found no reason to interfere with the order, emphasizing that the duty payment was a result of the department's delay in granting permission, not unjust enrichment on the part of the respondents.