2013 (4) TMI 181 - AT - Central Excise

Refund claim - unjust enrichment - finalization of provisional assessment - the respondent have produced a Chartered Accountant s certificate certifying that the incidence of excess duty whose refund is claimed by them had not been passed on by them to their customers - M/s. BSNL. Held that - Once evidence is produced by the respondent that they have borne the incidence of duty whose refund is claimed by them, the burden would shift to the department to prove that the respondent s claim is not correct. In this case, no such evidence has been produced by the department. In view of this, we do not find any infirmity in the impugned orders-in-appeal. The Revenue s appeals are dismissed. The Cross Objections also stand disposed of as above.

Summary

Issues:
Assessment of duty on a provisional basis, refund claims rejected on the ground of unjust enrichment, burden of proof regarding passing on duty to customers.

Analysis:
The case involved the respondent, manufacturers of Optical Fibre Cable and PDF Cable, who supplied these products to BSNL at a provisional price during the disputed period. The assessments were initially provisional, resulting in the payment of duty on a provisional basis. Subsequently, the assessments were finalized, leading to a refund of duty. The respondent filed refund claims for the excess duty paid, which were rejected on the grounds of unjust enrichment by the Assistant Commissioner. However, the Commissioner (Appeals) overturned these rejections. The Revenue filed appeals against the Commissioner's orders, with the respondent filing Cross Objections.

The main contention raised by the Revenue was that since the respondent had mentioned a higher amount of duty in the invoices, it should be presumed that the burden of that duty had been passed on to the customer, BSNL. The respondent, on the other hand, argued that the payment from BSNL was received only after the finalization of the provisional assessment, and the reimbursement was based on the duty finally assessed, which was lower than the duty originally paid. They also produced a Chartered Accountant's certificate to support their claim that the excess duty had not been passed on to BSNL.

The Tribunal considered both sides' arguments and found that the respondent had indeed paid the excess duty and had not passed on this burden to their customers. The Tribunal noted that the burden of proof shifted to the department once the respondent provided evidence of bearing the duty. Since the department failed to produce evidence to refute the respondent's claim, the Tribunal upheld the orders-in-appeal and dismissed the Revenue's appeals. The Cross Objections filed by the respondent were also disposed of accordingly.

In conclusion, the Tribunal ruled in favor of the respondent, emphasizing that the burden of proof regarding passing on the duty to customers shifted to the department once the respondent demonstrated bearing the duty. Since the department failed to provide evidence contradicting the respondent's claim, the refund claims were upheld, and the appeals by the Revenue were dismissed.