2017 (11) TMI 272 - AT - Central Excise

Principles of Unjust enrichment - refund claim - excess duty paid by mistake - Held that - the appellant though has shown the excise duty in the invoices but the same has not been taken from the buyers - also both the authorities have not considered the certificate issued by the Chartered Accountant who has verified from the records and has certified that the appellants have not collected the duty from the buyer with regard to the disputed invoices - also the appellants have not collected the duty from the buyers and have borne the duty by themselves. Therefore the principles of unjust enrichment are not applicable in the facts and circumstances of this case. The appellant has opted duty from the exemption on 10.07.2007 is also not correct because the appellants have not filed any declaration with the Department in terms of Notification 8/2003 during the entire financial period and the duty was paid by mistake and was not recovered from the buyers and therefore crediting the refund of fee being sanctioned by the original authority is not sustainable in law. Appeal allowed - decided in favor of appellant.

Summary

Issues involved: Appeal against rejection of refund on the ground of unjust enrichment.

Detailed Analysis:
1. Background: The appellant, engaged in manufacturing water filters, availed exemption under Notification 8/03 CE. Due to a mistake in calculating the exemption limit, they started paying duty from 10.07.2007, though the correct date was 10.09.2007. An excess duty of ?5,15,367 was paid by mistake, and a refund was sought but was denied on the ground of unjust enrichment.

2. Submission by Appellant: The appellant argued that the impugned order failed to consider their submissions and evidence. They contended that the Commissioner's finding that they opted to pay duty after crossing the exemption limit was incorrect as they had not filed any such declaration with the Department. They presented invoices showing the contracted price, stating that buyers had not reimbursed the excise duty, thus unjust enrichment did not apply. A Chartered Accountant's certificate supported this claim.

3. Judicial Analysis: The Tribunal noted that the appellant had not collected the excise duty from buyers and had borne the duty themselves, rendering unjust enrichment inapplicable. The Commissioner's finding that the appellant opted to pay duty from 10.07.2007 was deemed incorrect since no declaration was filed. The Chartered Accountant's certificate further supported the appellant's position. Citing precedents, the Tribunal held that when duty liability is not passed on to the buyer, unjust enrichment does not apply. Based on the evidence and circumstances, the Tribunal found the impugned order unsustainable in law and allowed the appeal with consequential relief.

4. Conclusion: The Tribunal set aside the impugned order, ruling in favor of the appellant due to the absence of unjust enrichment, the incorrect finding on the duty payment date, and the Chartered Accountant's certificate supporting the appellant's position.

(Order pronounced in Open Court on 07/09/2017)