2015 (10) TMI 1678 - AT - Central Excise

Denial of refund claim - Notification No.10/97-CE dt. 1.3.97 - Denial of exemption claim - Unjust enrichment - Held that - Adjudicating authority in his order partly sanctioned the refund and held that they are eligible for the exemption notification No.10/97-CE dt. 1.3.97 in respect of goods cleared to M/s/BEML but credited same to the Consumer Welfare Fund on the ground that appellants have not produced any evidence that incidence of duty was not passed on to M/s.BEML. Appellants availed the exemption under the said notification and cleared the goods and it was only during audit verification that the objection was raised on the admissibility of the notification and the appellant had paid the amount. Therefore, the amount deposited on account of audit objection certainly to be considered a deposit only and the question of unjust enrichment does not arise in this case. Denial of refund of amount paid in respect of clearance of goods to M/s.NAL, we find the adjudicating authority has rejected the refund claim by denying the said exemption notification. On perusal of the certificate issued by NAL, it is evident that it is duly signed by the Senior Controller of Administration/Sr. Deputy Secretary and M/s.NAL is directly under the administrative control of Department of Space. Therefore, NAL correctly falls under the public funded research institution under category (a) of the condition of the notification. The certificate is duly signed by an officer at the rank of Senior Deputy Secretary and it clearly confirms that the goods were supplied for R&D purpose. - appellants are eligible for full exemption under notification No.10/97 in respect of goods cleared to NAL and the duty deposited during audit is liable to be refunded. We also hold that, as discussed above, the question of unjust enrichment is not applicable. - Decided in favour of assessee.

Summary

Issues:
Refund claim denial for goods cleared to M/s.NAL, unjust enrichment clause application, eligibility for exemption under Notification No.10/97-CE.

Analysis:
The appellant appealed against the Commissioner (Appeals) order denying refund of duty paid on goods cleared to M/s.NAL and crediting the amount to the Consumer Welfare Fund under the unjust enrichment clause. The appellant claimed refund under Notification No.10/97-CE for goods cleared to M/s.BEML and M/s.NAL at NIL rate. The adjudicating authority rejected part of the refund claim for goods cleared to M/s.NAL but sanctioned the refund for goods cleared to M/s.BEML, subject to unjust enrichment. The consultant argued that they correctly claimed the exemption benefit and the duty paid was only a deposit due to an audit objection, citing relevant case laws. The Assistant Commissioner contended that the certificate provided did not meet the notification requirements, placing the appellant under a different category.

The Tribunal found that the appellant was eligible for the exemption under Notification No.10/97-CE for goods cleared to M/s.BEML, as confirmed by the adjudicating authority and the appellate authority. The Tribunal held that the duty paid on goods cleared to M/s.BEML was a deposit due to an audit objection, thus unjust enrichment did not apply. Citing the case of CCE Pune Vs Rocket Engg. Corporation Ltd., the Tribunal allowed the refund for goods cleared to M/s.BEML. In the case of goods cleared to M/s.NAL, the Tribunal noted that the certificate provided was signed by a Senior Deputy Secretary, fulfilling the requirements of the notification. As M/s.NAL fell under the category of a public funded research institution, the Tribunal held that the appellant was eligible for full exemption under the notification for goods cleared to M/s.NAL. The Tribunal set aside the impugned order and allowed the appeals with consequential relief, determining that the unjust enrichment clause was not applicable in this case.

This judgment clarifies the eligibility for exemption under Notification No.10/97-CE for goods cleared to different entities and highlights the importance of meeting the notification requirements to claim refunds. The Tribunal's decision emphasizes the distinction between deposit payments and unjust enrichment scenarios, providing a comprehensive analysis of the issues involved in the appeal.