2014 (12) TMI 271 - AT - Central Excise

Denial of refund claim - unjust enrichment - on appeal before the Commissioner (Appeals) the refund claim was allowed holding that bar of unjust enrichment is not applicable to the facts - Held that - contention of the AR that the decision of Addison & Co (2000 (11) TMI 146 - HIGH COURT OF JUDICATURE AT MADRAS) is in challenge before the Apex Court, therefore, impugned order is to be set aside. When it was asked, what is the status of the case in Addison & Co. in Apex Court he could not give update of the said case. In the absence of non-finalisation of the decision in Apex Court, the decision of the Hon ble High Court of Madras is enforceable as on today. Further, the revenue has failed to produce contrary evidence that the respondent have received any amount over and above 8% of the duty from the customers - Decided against Revenue.

Summary

Issues:
- Appeal against refund claim allowed by Comm. (Appeals) due to unjust enrichment bar not applicable.
- Challenge to impugned order based on Addison & Co case decision.
- Dispute regarding the application of unjust enrichment in the case.

Analysis:
1. The appeal before the Appellate Tribunal CESTAT MUMBAI concerns the refund claim of excise duty paid by the respondent, which was allowed by the Commissioner (Appeals) on the grounds that the bar of unjust enrichment does not apply to the case.

2. The case revolves around the fact that the respondents initially charged excise duty @ 16% on finished goods to customers. Subsequently, due to a notification reducing the duty to 8%, the excess duty charged was refunded to customers via credit notes. The Adjudicating authority rejected the refund claim, but the Commissioner (Appeals) allowed it, emphasizing that unjust enrichment was not applicable in this scenario.

3. The appellant, the revenue, argued that the decision in the Addison & Co case, which was under challenge before the Apex Court, rendered the Commissioner's decision unsustainable. However, the lack of updated information on the Addison & Co case's status weakened this argument.

4. The respondent's counsel contended that since customers did not pay duty exceeding 8% as per the notification, and there was no evidence of the respondent receiving excess duty amounts, the unjust enrichment principle did not apply. The absence of contradictory evidence from the revenue further supported this stance.

5. After hearing both sides, the Tribunal upheld the Commissioner's decision, citing the lack of evidence from the revenue to prove receipt of excess duty amounts by the respondent. The Tribunal found no fault in the impugned order and dismissed the revenue's appeal, also disposing of the cross objection accordingly.

6. Ultimately, the Tribunal's decision rested on the absence of evidence supporting the revenue's claim of unjust enrichment and the lack of updates on the Addison & Co case's status, reinforcing the Commissioner's ruling in favor of the respondent's refund claim.