2017 (2) TMI 1031 - AT - Central Excise

Refund claim - rejection on the ground of bar of unjust enrichment - Held that - it is evident that the appellant has not received the excess duty from the DOT. Moreover, to pass the bar of unjust enrichment, it is to be seen from the facts of the case, whether the assessee has passed the duty component on the buyer and the buyer has paid the same to the assessee. In this case, the appellant has been able to succeed to prove that the appellant has not received any amount over and above after reducing the price which is evident from the earlier order of this Tribunal and the same has been accepted by both sides - the appellant has been able to pass the bar of unjust enrichment - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on unjust enrichment.

Analysis:
The appellant, engaged in manufacturing optical fiber cable and accessories, filed a refund claim for excise duty on two items following a price reduction by the Department of Telecommunication (DOT). The claim was initially rejected due to unjust enrichment. However, the Tribunal found that the appellant had not received higher prices from DOT and had not passed on the duty burden to buyers. The Tribunal remanded the matter to the original authority for reconsideration.

In the subsequent proceedings, the authorities again rejected the claim citing unjust enrichment, as the duty amount was shown in the appellant's expenses. The appellant argued that DOT did not pay any amount exceeding the reduced prices, supported by a certificate from a chartered accountant confirming no excess duty was received. The appellant's contention was opposed on the grounds of lack of evidence from buyers and the duty component being shown as an expenditure in the profit and loss account.

Upon hearing both sides, the Tribunal analyzed the facts to determine if the appellant had recovered excess duty from DOT and passed it on to buyers. It was established that DOT did not pay more than the reduced prices, and the appellant had not received any excess duty. The appellant successfully demonstrated, with the accountant's certificate, that no excess duty was received. Consequently, the Tribunal held that the appellant had not passed on the duty component to buyers and was eligible for the refund claim, setting aside the previous order and allowing the appeal with consequential relief.