2019 (9) TMI 1544 - AT - Central Excise

Refund of Excise duty - applicability of principles of unjust enrichment - EPCG licence holders qualify as deemed export under Foreign Trade Policy - HELD THAT - The findings of Court below is in gross violation of Section 12B of the Central Excise Act, which provides, every person, who has paid duty of excise on any goods under this Act, shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such duty to the buyer of such goods. - this presumption is not available to the Revenue, in the facts and circumstances of the present case, as admittedly, the goods were cleared during the periods 2007-2008 to 2010-2011. Whereas the duty, has been deposited at the inquiry stage in the financial year 2011-2012. Further, admittedly, in the invoices for clearances under EPCG licence, no duty has been charged and rather in the Duty column, it is clearly mentioned that the duty is not payable as the goods have been cleared under EPCG licence giving the licence number and its date. The appellant has led sufficient and cogent evidences in the form of Chartered Accountant s certificate, copies of their balance sheet for the relevant period as well as supporting evidences from some of the buyers, from which it is evident that they have not passed on the duty to the buyers of the goods - the Court below has erred by observing that the appellant has not shown the refund receivable in their balance sheet on the Asset side. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Refund of duty denied on unjust enrichment grounds by crediting to Consumer Welfare Fund.

Analysis:
The appellant, engaged in manufacturing vehicles, cleared goods to EPCG license holders without payment of duty during 2008-2011. The Department objected, demanding duty payment. The appellant paid the duty with interest before a show cause notice was issued. The Ld. Commissioner confirmed the duty demand and penalty. The Tribunal's earlier appeal set aside the demand for the extended period. The refund application was rejected on unjust enrichment grounds.

The appellant provided evidence to show duty burden not passed on, including CA certificate, balance sheet entries, and customer affidavits. Invoices indicated no excise duty charged. The appellant paid duty post-clearance, following Department inquiry. The Tribunal cited Advance Steel Tubes Ltd. and upheld that unjust enrichment principles do not apply when duty is paid post-clearance without charging on the invoice.

The appellant demonstrated through CA certificates and buyer evidence that duty burden was not transferred. The Adjudicating Authority's view on "Miscellaneous Expenses" was challenged, citing Accounting Standards. The appellant's treatment of duty payment in books was due to pending litigation, complying with AS-29 and AS-9.

The Tribunal found the lower court's decision violated Section 12B of the Central Excise Act. It noted the absence of duty charge in EPCG invoices and upheld the appellant's evidence. The Court erred in disregarding the evidence presented. The appeal was allowed, setting aside the lower court's order and directing the refund with interest.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the lack of duty charge in invoices, the evidence provided, and the incorrect application of unjust enrichment principles. The appellant's compliance with Accounting Standards and the nature of EPCG clearances supported the decision to grant the refund with interest.