2015 (2) TMI 792 - AT - Central Excise

Rejection of refund claim - payment of excess duty on the clearance of copper rod to their sister unit as per CAS-4 - respondent has not followed the provisional assessment under Rule 7 of the Central Excise Rules, 2002 - Incorrect CA certificates - Unjust enrichment - Held that - The fact that appellants have not followed the provisional assessment under Rule 7 of Central Excise Rules, 2002 is irrelevant to the instant case and also cannot be the ground for rejection of refund claim. Sale made to independent buyers and the assessment method adopted thereto is totally irrelevant and out of context in so for as the present refund claims are concerned when CAS 4 certificates filed for the refund period have not been disputed by the department. On one hand the department is accepting CAS 4 certificates for inter unit transfer clearances and on the other hand rejecting the refund claims lodged on the basis of the very same CAS 4 certificates which have been accepted. Rejection of the refund claim does not appear to be legally correct. Therefore the impugned order is set aside and lower authority directed to re-examine the entire issue and pass fresh orders, after observing principles of natural justice. The appellant shall also satisfy the respondent that there is no unjust enrichment. As held by the Hon ble High Court of Madras in C.C. vs. B.P.L. Ltd. 2010 (7) TMI 66 - MADRAS HIGH COURT . Refund unjust enrichment, proof of - No evidence other than a Chartered Accountant certificate produced Certificate merely a piece of evidence acknowledging certain facts and in itself not sufficient to show that duty in relation to refund not passed on to another person. If it was otherwise, then the certificate would prevail over consideration of issues before authorities, a situation which was not contemplated under statue. Production of documents or other evidence was necessary for this purpose. As the refund claims are subject to payment of interest, in this case the refund claims pertains to the period from July 2008 to March 2011 and the matter in litigation for such a long period therefore, the direction of this Tribunal to decide the refund claim within 30 days are necessarily to be followed. - Decided against Revenue.

Summary

Issues:
Appeal against rejection of refund claim, Power of Commissioner (Appeals) to remand the matter, Requirement of annual audited Balance Sheet for refund claim, Unjust enrichment, Direction to process refund claim and sanction eligible amount, Payment of interest on refund claims.

Analysis:
1. Appeal against rejection of refund claim: The case involves the appellant's appeal against the rejection of the refund claim by the adjudicating authority. The respondent, a manufacturer of copper rod, filed refund claims for the excess duty paid on clearance to their sister unit. Initially, the claim was rejected based on various grounds like non-compliance with provisional assessment rules, incorrect CA certificates, and failure to prove unjust enrichment. The Commissioner (Appeals) remanded the matter back to the authority for re-examination. Subsequent rejections and appeals led to the current appeal by the Revenue.

2. Power of Commissioner (Appeals) to remand the matter: The appellant argued that the Commissioner (Appeals) had no authority to remand the matter. However, the Tribunal found that in this case, the Commissioner did not remit the issue back to the authority but set aside the adjudication order. Thus, the argument against the power of remand was deemed untenable, and the direction to the adjudicating authority to process the refund claim was upheld.

3. Requirement of annual audited Balance Sheet for refund claim: The appellant contended that the CA certificate produced by the respondent was only on a monthly basis, necessitating an annual audited Balance Sheet for the refund claim. The Tribunal considered this argument but ultimately upheld the Commissioner's direction to process the claim based on the available documentation.

4. Unjust enrichment: The issue of unjust enrichment was raised during the proceedings. The Tribunal referred to the requirement of proof beyond a mere CA certificate to establish that the duty refund was not passed on to another party. The Tribunal emphasized the need for additional evidence beyond the certificate to support the claim of no unjust enrichment.

5. Direction to process refund claim and sanction eligible amount: The Commissioner (Appeals) directed the adjudicating authority to process the refund claim and sanction the eligible amount as per law. The Tribunal found no infirmity in this direction and instructed the authority to comply within a specified timeframe.

6. Payment of interest on refund claims: Given the extended period under litigation (July 2008 to March 2011), the Tribunal stressed the importance of deciding the refund claim promptly and in adherence to the prescribed timeline. The direction to decide the claim within 30 days was reiterated to ensure timely resolution and payment of interest on the refund claims.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue, affirming the Commissioner's directive to process the refund claim and sanction the eligible amount. The issues of power to remand, documentation requirements, unjust enrichment, and timely resolution of refund claims were thoroughly addressed and resolved in the judgment.