2014 (3) TMI 825 - AT - Central Excise

Denial of refund claim - Unjust enrichment - Commissioner allowed refund claim - Held that - It does not stand contended by the revenue that the certificate given by the Chartered Accountant is not correct. Merely because the said certificate does not give the details of costing etc., will not turn it into a bad certificate. It stands clearly held by the Chartered Accountant that the assessee has not issued any supplementary invoices and have not passed on the burden to the clients. The said part of the certificate does not stand rebutted by the Revenue by referring to any evidence to the contrary - Decided against Revenue.

Issues:
1. Refund claim under compounded levy scheme.
2. Rejection of refund claim by Deputy Commissioner and Commissioner (Appeals).
3. Appeal before CESTAT on the basis of judgments in similar cases.
4. Appeal by Revenue on the point of unjust enrichment.
5. Consideration of evidence regarding passing on the duty burden to customers.
6. Assessment of the Chartered Accountant's certificate as conclusive evidence.

Analysis:
1. The case involved a refund claim by a company engaged in manufacturing processed fabrics under the compounded levy scheme for the years 1998-1999 and 1999-2000. The company paid duty under protest and later sought a refund based on a notification. The claim was initially rejected by the Deputy Commissioner and the rejection was upheld by the Commissioner (Appeals).

2. The company then appealed to the CESTAT, citing judgments in similar cases. The Tribunal allowed the appeal, setting aside the lower authorities' orders and directing the refund to be sanctioned by the Assistant Commissioner, Central Excise.

3. The Revenue, aggrieved by the stay order of the Assistant Commissioner, filed an appeal before the Commissioner (Appeals) on the grounds of unjust enrichment. The appellate authority considered the issue in light of the Supreme Court judgment in Mafatlal Industries Ltd. The authority examined whether the duty burden had been passed on to customers and referred to a relevant case to support its decision.

4. The appellate authority found that for the period in question, the duty had been paid separately under protest, and the company had not passed on the duty burden to customers. A certificate from a Chartered Accountant supported this claim. The Revenue acknowledged the certificate but argued that it lacked corroboratory evidence on costing.

5. During the hearing, both sides presented their arguments, with the Revenue contending that the certificate was not conclusive evidence due to the absence of detailed costing information. However, the Tribunal found no merit in the Revenue's appeal, stating that the certificate's validity was not undermined by the lack of detailed costing information. The Tribunal concluded that the company had not passed on the duty burden to clients based on the Chartered Accountant's certification.

6. Ultimately, the Tribunal rejected the Revenue's appeal, upholding the decision of the Commissioner (Appeals) and affirming the validity of the Chartered Accountant's certificate as sufficient evidence that the duty burden had not been passed on to customers.

(Pronounced in the open Court)

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