2016 (12) TMI 221 - AT - Central Excise

Rejection of refund claim - coal - The sale is governed by the price notified by Coal India Ltd.(CIL). CIL enhanced the price of coal with effect from 01/01/2012. However later by notification dated 31/01/2012 the enhancement was withdrawn retrospectively with effect from 01/01/2012. The appellants paid excise duty for the month of January 2012 with enhanced price. The buyers of coal paid coal price and duty thereon as per earlier terms without enhancement - whether the refund claim filed for excess paid duty due to withdrawal of enhancement of coal price notified by CIL justified? - Held that - We note that both the lower Authorities have rejected the claims without verifying the claims and documents submitted by the appellants. The orders were perfunctory and vague. Certain case laws were relied without examining factual context and applicability - The Original Authority simply rejected the appellants claim with no finding/order regarding crediting the amount to welfare fund in terms of Section 11B. Both the lower authorities failed to appreciate that the presumption under Section 11B is rebuttable. When evidences for such rebuttal are produced by the appellant by way of certificates from customers and CA bank statement and other documents then it is the duty of the sanctioning authority to consider all such evidences and pass order. We note that the same was not done in the present cases with required diligence. Presumptive conclusions were drawn and to support various case laws were relied upon. The impugned orders are not sustainable in view of the analysis as above. The same are set aside. The matters are remanded back to Original Authority for due verification of the refund claims by the appellant alongwith all supporting documents. Due opportunity shall be provided to the appellant to submit their defence/clarification - appeal allowed by way of remand.

Summary

Issues:
- Rejection of refund claims for excise duties
- Application of unjust enrichment clause
- Failure to establish non-passing on of duty burden to customers
- Inadequate verification of claims and documents by lower authorities

Analysis:
The judgment revolves around four appeals challenging the rejection of refund claims for excise duties by the Commissioner (Appeals), Raipur. The appellant, engaged in coal production, paid excise duty based on an enhanced price notified by Coal India Ltd. (CIL) effective from 01/01/2012, which was later withdrawn retrospectively. The buyers, however, paid based on the earlier terms without the enhancement. The lower authorities rejected the claims citing unjust enrichment, stating that once duty is passed on during clearance, subsequent credit notes are irrelevant. They held that the appellant failed to prove non-passing on of duty burden to customers.

Upon review, the Tribunal noted that the lower authorities rejected the claims without proper verification. The Original Authority's rejection lacked clarity on crediting the amount to the welfare fund as per Section 11B. The appellant provided evidence, including bank statements, buyer certificates, and CA certificates, asserting non-passing on of duty burden. The Tribunal criticized the lower authorities for not examining these documents properly and drawing presumptive conclusions without due diligence.

The Tribunal emphasized that the burden of excess duty payment not being contested should lead to refund sanctioning. It highlighted that the appellant produced sufficient documentary evidence to support their claims, making the rejection by lower authorities unsustainable. The Tribunal stressed that when evidences for rebuttal under Section 11B are presented, the sanctioning authority must consider them diligently. Consequently, the impugned orders were set aside, and the matters remanded to the Original Authority for thorough verification of refund claims with a three-month deadline for final orders.

In conclusion, the appeals were allowed by way of remand, emphasizing the importance of proper verification and consideration of documentary evidence in excise duty refund claims to ensure fairness and compliance with legal provisions.