2014 (12) TMI 1083 - AT - Central Excise

Denial of refund claim - Unjust enrichment - additional duty has been paid by the respondent at various appellate stages - Held that - It is a case where duty has been demanded from the respondent after clearance of the goods. This fact is not in dispute. Further, the fact is that the respondent has not received any amount over and above the amount shown in the invoices at the time of clearance. These facts are also not in dispute. The additional duty has been paid by the respondent at various appellate stages. The Revenue has also not produced any evidence on record that the respondent has recovered any amount towards duty over and above invoices price from the buyers. Apart from bar of unjust enrichment the respondent has produced a certificate from the Cost Accountant that no amount over and above invoices price has been received from the buyers and the same does not form a part of cost of production. In these circumstances, I do not find any infirmity and the same is upheld. - Decided against Revenue.

Summary

Issues:
Appeal against order on unjust enrichment applicability.

Analysis:
The case involved an appeal by the Revenue against a decision where the Commissioner (Appeals) ruled that unjust enrichment did not apply in the given circumstances. The respondent, a manufacturer of cotton yarn, was found to have not paid additional duty (TTA) after clearance of goods, leading to a demand for duty through a show cause notice. The matter was adjudicated, and the respondent paid the duty during the litigation stages. The Hon'ble High Court of Gujarat had previously ruled in favor of the respondent, stating they were not liable to pay the additional duty, resulting in a refund claim by the respondent. The adjudicating authority rejected the refund claim citing unjust enrichment. However, the Commissioner (Appeals) held that since the duty was paid during litigation and after goods clearance, unjust enrichment did not apply.

During the appeal, the Revenue argued that unjust enrichment should apply based on the principle of equity, citing various legal precedents. The Revenue contended that the duty amount was treated as a revenue expenditure by the respondent, passing on the duty incidence to buyers. Conversely, the respondent argued that they did not recover any duty amount from buyers beyond the invoice price, supported by a Cost Accountant certificate. They referenced tribunal and court decisions to support their stance that unjust enrichment was not applicable in this case. The Tribunal noted that duty was demanded post-clearance, and the respondent did not receive any amount beyond the invoice price from buyers, with no evidence presented by the Revenue to the contrary.

The Tribunal found that the cases cited by the Revenue were not directly relevant to the current scenario, where duty was paid after goods clearance. The Tribunal highlighted that in cases where duty is paid on captively consumed goods or at the time of import clearance, the duty forms part of the cost of production. However, in this instance, the duty was paid post-clearance, and the facts did not align with the cases referenced by the Revenue. Additionally, the Tribunal emphasized the decision of the Hon'ble Gujarat High Court in a similar case where unjust enrichment was not applicable due to payments made under protest during the appeal stages. Considering the lack of evidence of recovery beyond invoice price and the Cost Accountant certificate, the Tribunal upheld the decision that unjust enrichment did not apply, dismissing the Revenue's appeal.