2017 (9) TMI 864 - AT - Central Excise

Refund of excess duty paid - confusion in the method of valuation - refund rejected on the ground of time bar and unjust enrichment - Held that - as regard the time bar, since refund was admittedly filed first time within the stipulated time as prescribed under Section 11B. Subsequent re-submission of refund claim cannot be taken as filing of refund claim first time - the refund is not time-barred. Unjust enrichment - Held that - though the appellant have submitted C.A. certificate, affidavit of the director, copies of credit note and ledger of the buyers, but as per findings of both lower authorities, it is observed that they have not properly verified these documents - the adjudicating authority must verify all these documents. Appeal allowed by way of remand.

Summary

Issues:
1. Time bar for filing refund claim
2. Unjust enrichment in the case

Time Bar for Filing Refund Claim:
The case involved the appellant, engaged in the manufacture of Surgical Dressings, who cleared goods between January and February 2007, paying Central Excise duty based on MRP value under Section 4A. However, confusion arose regarding whether the value should be governed by Section 4 or Section 4A. The department clarified that the value should be under Section 4, leading to an excess payment of duty. The appellant filed a refund claim on 6-8-2007, which was returned due to deficiencies. The claim was re-submitted on 10-3-2008. The adjudicating authority rejected the claim citing time bar and unjust enrichment. The Commissioner(Appeals) upheld the decision, prompting the appeal before the Tribunal.

Unjust Enrichment:
The appellant contended that the re-submission of the refund claim should not be considered a delay as the initial claim was filed on time. They argued that the documents submitted, including a C.A. certificate, credit notes, ledger, and director's affidavit, proved that the excess duty incidence was not passed on. The appellant cited relevant judgments to support their position. On the other hand, the Revenue argued that since duty was charged at the time of goods clearance and credit notes were issued later, the duty incidence had already passed to customers, invoking unjust enrichment. They relied on a specific case to support their stance. The Tribunal, after considering both sides, found that the refund claim was not time-barred as the initial claim was filed within the stipulated time. However, regarding unjust enrichment, it noted that the lower authorities had not thoroughly verified the documents. The Tribunal emphasized the need for proper verification of buyer's ledger to determine if the credit note effect was correctly adjusted. The Tribunal set aside the impugned order, remanding the matter for a fresh decision based on the observations made.

This comprehensive analysis of the judgment addresses the issues of time bar for filing the refund claim and unjust enrichment, outlining the arguments presented by both parties and the Tribunal's decision based on the facts and legal precedents cited during the proceedings.