2016 (9) TMI 1128 - AT - Central Excise

Refund claim - period from July, 2001 to March, 2002 - Special Excise Duty & Educational Cess paid by them from 1st March, 2005 to 6th April, 2005 on the goods manufactured by them - unjust enrichment - appellant passed on various discounts to the buyers during the said period by issuing credit notes - appellant pleaded that at the time of removal of the goods, it was not possible to know the quantum of discount that was to be deducted from the transaction value - Held that - the Hon ble High Court of Punjab & Haryana held that both the appellate authorities below have recorded a concurrent finding of fact that no incidence of duty, in respect thereof the claim had been preferred by the assessee, had been passed on to the customers. We find that the ruling of Hon ble High Court is squarely applicable in the present case. Therefore, we allow the appeal filed by M/s Varun Beverages Ltd. We further do not find the ground raised by Revenue, to be tenable in law. - Decided in favour of appellant

Issues:
Refund claim of Special Excise Duty & Educational Cess, unjust enrichment, applicability of Special Excise Duty on goods, issuance of credit notes, budget proposal provisions, Notification No. 7/2005-CE (NT), entitlement for refunds, Consumer Welfare Fund, appellate jurisdiction.

Analysis:
1. Refund Claim of Special Excise Duty & Educational Cess:
The case involved a claim for refund of Special Excise Duty & Educational Cess paid by M/s Varun Beverages Ltd. The goods were claimed to be classifiable under Tariff item No. 21069050, and the original authority contended that the transition from 6 digit to 8 digit did not disturb the existing duty structure. The Commissioner (Appeals) held that the goods were entitled to the refunds claimed. However, in one instance, the Special Excise Duty was included in the invoice amount, leading to a rejection based on unjust enrichment.

2. Unjust Enrichment & Credit Notes:
In the appeal related to the refund claim where the issue of unjust enrichment was raised, M/s Varun Beverages Ltd. argued that credit notes were issued immediately after goods dispatch, citing precedents to support the contention that no unjust enrichment occurred. The Tribunal referred to a case law and held that if no duty incidence was passed on to customers, refund could be admissible, aligning with the argument presented.

3. Applicability of Special Excise Duty on Goods:
The Revenue contended that there was no provision to withdraw the Special Excise Duty on Beverages base syrup as per the budget proposal and referred to Notification No. 7/2005-CE (NT). However, the Commissioner (Appeals) found that the Special Excise Duty was not applicable to the goods manufactured by M/s Varun Beverages Ltd. post a specific date, allowing the refunds in three instances.

4. Entitlement for Refunds & Consumer Welfare Fund:
The Tribunal considered various arguments presented by both parties, including the issuance of credit notes, legal precedents, and the application of duty incidence on customers. Relying on a High Court ruling and previous Tribunal decisions, the Tribunal allowed the appeal filed by M/s Varun Beverages Ltd. and rejected the appeal filed by Revenue, holding that the grounds raised by Revenue were not tenable in law.

5. Consequential Benefits & Appellate Jurisdiction:
The Tribunal concluded that M/s Varun Beverages Ltd. would be entitled to consequential benefits in accordance with the law. The cross objection was also disposed of. The judgment was dictated and pronounced in open court, providing a comprehensive resolution to the issues raised in the appeals.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT ALLAHABAD highlights the key legal aspects, arguments, and decisions made regarding the refund claims, unjust enrichment, applicability of Special Excise Duty, and the final ruling on the appeals filed by both parties.

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