2017 (7) TMI 395 - AT - Central Excise

Refund claim - finalization of provisional assessment - refund rejected on the ground of unjust enrichment and issue of limitation - Held that - the Original Authority and Appellate Authority did not have advantage of said certificate for appreciation of transactions between the appellant and their customers - The certification of the transactions between the appellant and their customers is essential for understanding as to whether in the practice of accounting as stated in the said certificate dated 04/04/2017 is there any chance of higher duty incidence getting passed on to the customer and appellant be in a position to pay less excise duty to the exchequer and get enriched by the difference between the two through refund - matter remanded with a direction to re-examine the issue of unjust enrichment and decide the matter afresh on merit - appeal allowed by way of remand.

Issues involved:
1. Refund claim rejection based on unjust enrichment and limitation grounds.
2. Applicability of Rule 9B of the Central Excise Rules, 1944 for passing refund without a separate application.
3. Lack of documentary evidence regarding the passing on of duty incidence to customers.
4. Appeal for remand based on the submission of a certificate by a Chartered Accountant.

Analysis:
1. The appeal was against the Order-in-Appeal dated 28/02/2011 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Lucknow. The appellant, engaged in the manufacture of telecom equipment, applied for provisional assessment due to non-finalization of price contracts. The Adjudicating Authority concluded that the appellant overpaid duty and advised them to file a refund claim. However, the refund was rejected by the Assistant Commissioner citing unjust enrichment and limitation issues. The Commissioner (Appeals) upheld the rejection, stating the appellant failed to prove that the duty incidence was not passed on to customers. The Tribunal remanded the matter, directing the appellant to provide a certificate from a Chartered Accountant to re-examine the unjust enrichment issue.

2. The appellant argued that the Original Authority had access to documentary evidence supporting the duty payment. They contended that as per Rule 9B of the Central Excise Rules, 1944, the Assistant Commissioner should have processed the refund without a separate application. The appellant claimed that the excess duty paid was rightfully eligible for a refund. However, the Tribunal focused on the need for certification of transactions between the appellant and their customers to determine the possibility of passing on higher duty incidence to customers, leading to unjust enrichment. The matter was remanded for further examination based on the Chartered Accountant's certificate.

3. The Tribunal considered the submission of a certificate by a Chartered Accountant, which highlighted the debtor-creditor relationship between the appellant and their customers. The certificate suggested that any excess payment made by customers to the appellant was adjusted in subsequent transactions. The Tribunal noted that such certification was crucial for understanding the actual financial transactions between the parties and the potential impact on duty payment. The lack of this information during the previous assessments led to the remand for a fresh examination of the unjust enrichment issue.

In conclusion, the Tribunal allowed the appeal by remanding the matter back to the Original Authority for a re-examination of the unjust enrichment issue in light of the Chartered Accountant's certificate and relevant transaction records. The appellant was directed to provide the certificate to facilitate a thorough assessment of the duty payment implications on the parties involved.

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