2017 (5) TMI 811 - AT - Central Excise

Refund of Additional Excise Duty - denial on the ground of unjust enrichment - whether in a case where goods have been sold by the appellant, cum-duty and the price is fixed, in that circumstances, merely mentioning AED in the invoices as per the statutory requirement of the Central Excise Rules, the bar of unjust-enrichment is applicable to the facts or not? - Held that - The said issue has been dealt by the Hon ble Punjab & Haryana High Court in the case of Uniproducts (India) Limited 2009 (1) TMI 207 - PUNJAB & HARYANA HIGH COURT , where it was held that in pursuance to Rule 52A of the Rules the assessee is required to furnish various particulars/declarations as per Serial No. (ix) to (xiii) of the proforma as reproduced above. It is not a case where the assessee had paid any duty and recovered the same. Therefore, the doctrine of undue enrichment would not be attracted - bar of unjust-enrichment is not applicable to the facts of this case - refund allowed - decided in favor of assessee.

Summary

Issues: Refund claim denied on the ground of unjust enrichment.

Analysis:
The appellant, a 100% EOU, faced a dispute regarding the requirement to pay Additional Excise Duty (AED) during the impugned period. The appellant showed AED in their invoices as per statutory requirement, charging the gross amount from customers. The appellant contested the liability of AED, which was later held in their favor. Subsequently, they filed a refund claim for the AED paid, which was sanctioned but transferred to the Consumer Welfare Fund due to the alleged unjust enrichment. The Revenue argued that since the duty amount was shown in the invoices and recovered from customers without giving them credit, the appellant failed to pass the bar of unjust enrichment. The Revenue also highlighted the lack of satisfactory evidence regarding clearances made in DTA, questioning the entitlement to refund claims for direct and sample sales.

The appellant contended that they sold goods inclusive of all duties to sister units or in the open market, mentioning the AED paid in the invoices as required by law. They argued that as the prices were fixed inclusive of duties, the bar of unjust enrichment should not apply to their case. The appellant cited a decision of the Punjab & Haryana High Court in support of their argument. After considering both sides, the tribunal focused on the key issue of whether mentioning AED in invoices, as per statutory requirements, in a cum-duty sale scenario implies unjust enrichment. Referring to the High Court's decision in a similar case, the tribunal concluded that the doctrine of undue enrichment does not apply when duty declaration in invoices is a statutory requirement and not a case of duty payment and recovery. Relying on the precedent set by the High Court, the tribunal held that the bar of unjust enrichment did not apply in this case. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.