2017 (9) TMI 866 - AT - Central Excise

Refund of excess duty paid - rejection on the ground of unjust enrichment - Held that - The matter needs verification of the dealers invoices to the effect of credit note given by the dealer. Though the Ld. Counsel has submitted the chart but it is not supported by any invoices issued by the dealer to the ultimate consumer therefore the matter needs to be re-considered on the factual matrix - appeal allowed by way of remand.

Summary

Issues:
1. Refund claim rejected on grounds of unjust enrichment.
2. Examination of whether the amount of credit note issued was passed on to the actual consumer.
3. Verification required regarding the passing on of excess paid duty to the ultimate consumer.

Issue 1 - Refund claim rejected on grounds of unjust enrichment:
The appellant, engaged in manufacturing motor vehicles, cleared goods under provisional assessment, providing discounts to dealers. Subsequently, additional discounts were extended to dealers, leading to an excess payment of excise duty. The appellant issued credit notes for the differential and additional discounts and filed a refund claim. The original authority rejected the claim citing unjust enrichment. The Commissioner (Appeals) upheld the decision. The Tribunal initially allowed the appeal, following a judgment of the Madras High Court, but the Revenue appealed to the Bombay High Court, which remanded the matter back to the Tribunal for further examination.

Issue 2 - Examination of passing on of credit note amount to the actual consumer:
The appellant's counsel argued that as per the High Court judgment, it was essential to determine if the credit note amount was passed on to the actual consumer. A comparison chart was submitted, but invoices supporting the claim were not provided at the time. The Revenue contended that the duty had been passed on to the consumer before the credit note issuance, and merely issuing a credit note did not negate this fact.

Issue 3 - Verification of passing on of excess paid duty to the ultimate consumer:
The High Court emphasized the need to verify if the excess paid duty had not been passed on to the ultimate consumer. It directed a re-examination of the matter by the adjudicating authority to determine if the credit note amount had reached the consumer. The Tribunal remanded the case for further verification based on the High Court's observations, highlighting the importance of examining dealer invoices to establish the passing on of the credit note amount to the ultimate consumer.

In conclusion, the Tribunal remanded the case to the adjudicating authority for a fresh decision in accordance with the law and the High Court's directives. The matter required detailed verification to establish whether the excess paid duty had been passed on to the ultimate consumer, emphasizing the significance of examining dealer invoices to determine the impact of the credit note issuance on the consumer.