2017 (5) TMI 506 - AT - Central Excise

Refund claim - excess duty paid due to downward revision of price - denial on the ground of unjust enrichment - Held that - The respondents have furnished evidence to show that APCPDCL has made payments as per provisional prices in terms of the relevant purchase order and complying with the price variation clause - They have also furnished a Chartered Accountant certificate to substantiate that the incidence of duty has not been passed on - refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against rejection of refund claim
- Doctrine of unjust enrichment
- Passing on the duty to the customer

Analysis:
The appeal before the Appellate Tribunal CESTAT HYDERABAD was filed by the Department challenging the order of the Commissioner(Appeals) that set aside the rejection of the refund claim. The case involved the respondents, who are manufacturers of electrical transformers, supplying to Government Discoms. The dispute arose when the prices of transformers were reduced after the initial payment and excise duty had been paid. The Department contended that the duty had been passed on to the customer, APCPDCL, as the respondents had recovered the duty at the time of sale. The Department argued that the refund claim was hit by the doctrine of unjust enrichment. However, the Commissioner(Appeals) accepted the evidence provided by the respondents, including financial statements and a Chartered Accountant certificate, and held that the refund was not hit by unjust enrichment. The refund claim was sanctioned by the Commissioner(Appeals), leading the Department to appeal before the Tribunal.

During the proceedings, the Department reiterated its grounds of appeal, emphasizing that the duty had been passed on to the customer APCPDCL as the respondents had collected the entire amount at the time of sale, including duty. The Department argued that the Commissioner(Appeals) erred in allowing the refund claim based on this premise. Despite issuing a notice, no one appeared on behalf of the respondent during the hearing. The Tribunal considered the arguments presented by the Department, which centered on the contention that the duty incidence had already been passed on to the customer.

The Tribunal examined the evidence provided by the respondents, which included ledger extracts, financial statements, and a Chartered Accountant certificate. The documents demonstrated that the respondents had borne the duty incidence themselves and that APCPDCL had made payments as per provisional prices, adjusting the amounts due to price revisions. The Tribunal found that the evidence supported the conclusion that the duty incidence had not been passed on to the customer. Therefore, the Tribunal upheld the decision of the Commissioner(Appeals) to sanction the refund, dismissing the appeal filed by the Department as lacking merit. The impugned order was deemed to require no interference, and the appeal was ultimately dismissed.