2014 (8) TMI 469 - AT - Central Excise

Refund claim - Passing of incidence of duty paid to another person - Burden of proof - Held that - in all cases of refund the claimant of refund has to prove to the satisfaction of the refund sanctioning authority that the incidence of duty sought to be refunded by the claimant has not been passed on to any other person - no documentary evidence of not collecting the refund amount was produced by the Respondent as was the case in Sweat Trade vs CCE Mumbai 2008 (7) TMI 114 - CESTAT MUMBAI . In the interest of justice the matter is required to be remanded back to the Adjudicating Authority - Following decision of Union of India Vs. Solar Pesticide Pvt. Ltd. (2000 (2) TMI 237 - SUPREME COURT OF INDIA) - Decided in favour of Revenue.

Summary

Issues:
1. Refund claim of excise duty by a 100% EOU.
2. Applicability of unjust enrichment in the case.
3. Burden of proof on the claimant for refund.
4. Requirement of documentary evidence to establish non-recovery of duty.

Analysis:
1. The appeal pertains to a refund claim of excise duty by a 100% EOU, where the respondent paid an amount towards excise duty following an investigation revealing a shortage of imported goods. The adjudicating authority determined the actual shortage and rejected the refund claim based on the respondent's failure to prove non-passing of duty incidence to another person.

2. The central issue revolves around the applicability of unjust enrichment in the case. The Commissioner (Appeals) ruled out unjust enrichment, emphasizing that the goods in question were not sold, and duty was paid during investigations. The absence of a sale under an invoice to a buyer was highlighted to argue against the normal burden envisaged under the Customs Act, 1962.

3. The burden of proof on the claimant for refund was extensively discussed. The appellant argued that the respondent failed to provide documentary evidence or financial statements to establish non-recovery of the duty amount or its inclusion in the product cost. Citing relevant case laws, the appellant emphasized the necessity for the claimant to demonstrate non-passing of duty incidence.

4. The requirement for documentary evidence to support the claim of non-passing of duty incidence was a critical aspect of the case. The appellate tribunal emphasized the need for the respondent to produce all relevant documentary evidence to substantiate their claim. The matter was remanded back to the Adjudicating Authority for denovo adjudication, granting the respondent an opportunity for a personal hearing.

In conclusion, the appeal filed by the Revenue was allowed by way of remand to the Adjudicating Authority, highlighting the importance of proving non-passing of duty incidence for refund claims and the necessity for documentary evidence to support such claims. The judgment underscored the principles of unjust enrichment and the burden of proof on claimants in refund cases.