2017 (3) TMI 292 - AT - Central Excise

Refund claim - excise duty paid on discounts passed on to the dealers and stockists, subsequent to clearances - denial on the ground that the appellant has not resorted to provisional assessment and also for the reason that the refund amount has not passed the test of unjust enrichment - Held that - The said point was considered by the Tribunal in the appellant s own case 2016 (8) TMI 493 - CESTAT HYDERABAD , where it was held that the appellant paid duty on the value including the discount that is to be allowed and therefore opting for provisional assessment is not required. Unjust enrichment - Held that - The appellant has produced documents such as Chartered Accountant Certificate, Ledger account as well as the Balance Sheet. The appellant has therefore established that the burden of duty has been borne by the appellant. In view thereof, following the decisions laid in the appellant s own case 2016 (8) TMI 493 - CESTAT HYDERABAD , the appellant is eligible for refund. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Rejection of refund claim for excise duty paid on discounts passed on to dealers and stockists
- Failure to resort to provisional assessment
- Test of unjust enrichment not satisfied

Analysis:
1. Rejection of Refund Claim: The appellant filed a refund claim for excise duty paid on discounts passed on to dealers and stockists. The department denied the refund claim citing non-resort to provisional assessment and failure to pass the test of unjust enrichment. The Commissioner (Appeals) observed that the appellant satisfied the first three parameters but failed to fulfill the fourth condition related to provisional assessment. However, the Tribunal, in a previous case, held that the absence of provisional assessment does not disentitle the appellant from claiming a refund. The Tribunal emphasized that the relevance of assessment, provisional or otherwise, is only for the computation of the time limit for filing a refund claim, not for the eligibility of the refund.

2. Failure to Resort to Provisional Assessment: The Commissioner (Appeals) noted that the appellant did not opt for provisional assessment, which led to the rejection of the refund claim. However, the Tribunal, in line with previous judgments, clarified that the absence of provisional assessment does not automatically disqualify the appellant from claiming a refund. The Tribunal emphasized that the criterion of provisional assessment is irrelevant when the refund claim is filed within the specified time limit from the date of clearance of goods.

3. Test of Unjust Enrichment: The second ground for rejecting the refund claim was the failure to establish that the burden of duty had not been passed on. The appellant provided documents such as a Chartered Accountant Certificate, Ledger accounts, and Balance Sheet to demonstrate that the burden of duty had been borne by the appellant. Citing a judgment by the Honorable Apex Court, the Tribunal held that when the burden of duty is borne by the assessee, the refund of excess duty paid cannot be denied. Therefore, based on the evidence presented, the Tribunal concluded that the appellant had established that the burden of duty had been borne by them, making them eligible for the refund.

In conclusion, the Tribunal set aside the impugned order rejecting the refund and allowed the appeal, providing consequential reliefs as necessary. The judgment emphasized that the absence of provisional assessment does not preclude the appellant from claiming a refund and highlighted the importance of demonstrating that the burden of duty had not been passed on to qualify for a refund of excess duty paid.