2016 (2) TMI 765 - AT - Central Excise

Refund claim of excess central excise duty as a consequence of finalization of provisional assessment on account of discounts provided to various dealers/ customers on the provisional value - doctrine of unjust enrichment - Held that - Facts have also been endorsed by the independent practicing Chartered Accountants who on verification of the books of accounts of the appellant vide certificates dated 20.12.2012 28.02.2013 23.07.2013 and 02.12.2014 have certified that the refund claimed amount do not form part of the finished goods and thus the appellant had not passed on the duty incidence to the dealers/customers or any other person. Furthermore also find that the customers of the appellant have also issued the certificates certifying that they have not availed any Cenvat credit of Central Excise duty charged by the appellant in their invoices and that final payment on account of goods have been made to the appellant after adjusting the amount mentioned in the credit notes raised by them. Though the above referred documents were produced by the appellant before the lower authorities but the same have not been considered in their proper prospective for adjudication of the refund claim. In view of above it is of the firm opinion that the above modus operandi adopted by the appellant clearly demonstrate that they have neither recovered any amount in respect of discount from their buyers/dealers nor have recovered any amount representing duty of Central Excise on such incentive amount. Hence the refund claim of the appellant is not hit by the doctrine of unjust enrichment. - Decided in favour of assessee

Summary

Issues:
1. Refund claim based on provisional assessment and discounts provided.
2. Transfer of refund amount to Consumer Welfare Fund.
3. Appeal against adjudication orders upholding transfer of refund amount.
4. Consideration of evidence regarding passing on the duty incidence to buyers.
5. Application of the doctrine of unjust enrichment in the refund claim.

Analysis:
1. The appellant, engaged in manufacturing Gypsum Board, resorted to provisional assessment due to difficulties in determining the value of excisable goods because of discounts provided to dealers/customers. After finalizing the discounts, the appellant sought refund of excess central excise duty paid during provisional assessment period.

2. The refund applications were granted, but the refund amount was transferred to the Consumer Welfare Fund instead of being paid to the appellant. This decision was based on the belief that the burden of duty may have been passed on to buyers, as the appellant did not provide sufficient evidence to prove otherwise.

3. The appellant appealed the adjudication orders before the Commissioner (Appeals), who upheld the decision to transfer the refund amount to the Consumer Welfare Fund. The appellant then approached the Tribunal challenging this decision.

4. The Tribunal examined the documents and found that the appellant had issued credit notes to customers to adjust discounts, clearly indicating that the duty amount on discounts had not been recovered from buyers. The appellant's accountants and customers also provided certificates supporting this claim, which were not adequately considered by the lower authorities.

5. The Tribunal concluded that the appellant had not passed on the duty incidence to buyers, thereby rejecting the doctrine of unjust enrichment. The impugned orders were set aside, and the appeal was allowed in favor of the appellant, granting the consequential benefit of refund.

This detailed analysis highlights the issues surrounding the refund claim, transfer of refund amount, consideration of evidence, and application of the doctrine of unjust enrichment in the legal judgment delivered by the Tribunal.