2017 (3) TMI 1449 - AT - Central Excise

Refund claim - unjust enrichment - the prices were reduced retrospectively, therefore, the appellant s buyer issued debit notes to the appellant for non payment of duty on account of reduction of price - Held that - the buyer has issued the certificate that they have not availed the cenvat credit of differential duty on account of subsequent reversal of price of the goods and they have not paid any differential duty to the appellant. To that effect the certificate has been issued by the buyer that differential duty has not been paid to the appellant. In the absence of any contrary views, the debit notes issued by the buyer is evidence to pass the bar of unjust of enrichment - reliance was placed in the case of Commissioner of Central Excise, Madras Versus M/s Addison & Co. Ltd. 2016 (8) TMI 1071 - SUPREME COURT - the appellant is entitled for refund claim and as they have passed the bar of unjust enrichment - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on unjust enrichment.

Analysis:
The appellant filed a refund claim after receiving debit notes from the buyer due to a retrospective reduction in prices, but it was rejected on the grounds of unjust enrichment. The appellant argued that the buyer issued a certificate stating that the duty was not passed on and no cenvat credit was taken for the differential duty. The appellant relied on a Supreme Court decision in a similar case. The respondent contended that the appellant failed to provide evidence of non-receipt of the amount from the buyer. The tribunal considered the submissions and noted that the buyer's certificate confirmed no payment of differential duty to the appellant. Citing the Supreme Court's decision in Addison & Co. Ltd., the tribunal held that the appellant had met the criteria for unjust enrichment, allowing the refund claim.

In the case referred to by the tribunal, the Assessee, a 100% Export Oriented Unit, filed a refund claim for excess excise duty paid. The duty incidence was initially passed on to customers but later returned to buyers, supported by a certificate from a Chartered Accountant. The refund claim was rejected initially due to lack of documentation. However, the Appellate Authority and subsequently the Tribunal and High Court ruled in favor of the Assessee, emphasizing the absence of duty pass-on to any other person. The court dismissed the Revenue's appeal, highlighting that the Assessee had borne the duty burden, entitling them to the refund. The judgment emphasized the importance of genuine documentation in proving unjust enrichment.

Therefore, the tribunal allowed the appeal, setting aside the impugned order rejecting the refund claim on the basis of unjust enrichment. The decision was made in line with the evidence provided by the buyer's certificate and the principles established in the Addison & Co. Ltd. case.