2016 (6) TMI 1097 - AT - Central Excise

Refund claim - excess excise duty paid due to the failure of computer software cleared to their depots - unjust enrichment - Held that - We find that so far as admissibility of refund claim is concerned, the records have been checked by the range officers, Deputy Commissioner as well as the Commissioner (Appeals) to their satisfaction. The grounds of appeals do not bring out any infirmity in the facts which have been verified. We do not find any infirmity in the verification done by the lower authorities. In so far as the unjust enrichment is concerned, it is not disputed that the goods were cleared only to their depots. Since the goods have not been sent to third party on the basis of such invoices, it cannot be said that the duty has been recovered from the buyers. In the circumstances, we find that the provisions of unjust enrichment cannot be invoked. - Decided against revenue

Summary

Issues:
1. Excess excise duty payment due to computer software failure.
2. Refund claim by M/s ICI India Ltd.
3. Admissibility of refund.
4. Unjust enrichment clause applicability.

Analysis:

Issue 1: Excess excise duty payment due to computer software failure
The case involves M/s ICI India Ltd. paying excess excise duty because of a computer software failure that resulted in the clearance of products to their depots with higher payment of central excise indicated on the invoices. The respondents sold their products through their depots to independent buyers, leading to the excess duty payment. The refund was sanctioned by the original adjudicating authority and the first appellate authority. The revenue, aggrieved by this decision, filed an appeal before the Tribunal.

Issue 2: Refund claim by M/s ICI India Ltd.
The Revenue argued that M/s ICI India Ltd. sold products to independent buyers based on Maximum Retail Price (MRP) under the Standard of Weights and Measures Act, 1976. They contended that there was a lack of evidence regarding the MRP printed on the packages and the correlation between the goods and MRP. The Revenue further argued that the absence of evidence showing that receipts from buyers were less than those mentioned in the invoices by M/s ICI India Ltd. raised doubts. The Commissioner (Appeals) noted that unjust enrichment was not relevant as invoices were issued to their depots.

Issue 3: Admissibility of refund
The Deputy Commissioner observed that M/s ICI India Ltd. charged a lower price from their dealers than the MRP printed on the items, indicating that the burden of duty was not passed on to any other person. The refund was deemed admissible as there was no unjust enrichment involved. The range officers, Deputy Commissioner, and Commissioner (Appeals) examined the case records thoroughly, leading to the sanctioning of the refund.

Issue 4: Unjust enrichment clause applicability
The Tribunal found that the records were examined satisfactorily by the lower authorities, and no infirmity was found in the verification process. Since the goods were only cleared to M/s ICI India Ltd.'s depots and not to third parties based on the invoices, the duty was not recovered from the buyers. Therefore, the provisions of unjust enrichment were deemed inapplicable. The appeals filed by the Revenue were subsequently dismissed by the Tribunal.