2017 (12) TMI 594 - AT - Central Excise

Refund claim - unjust enrichment - Held that - there is no dispute on the fact that refund was payable to the respondent on merit - even in the case of captive consumption the unjust enrichment will be applicable as held by the Hon ble Supreme Court in the case of UOI Vs. Solar Pesticide Pvt. Ltd. 2000 (2) TMI 237 - SUPREME COURT OF INDIA - appeal dismissed - decided against Revenue.

Summary

Issues involved:
Refund claim rejection on grounds of unjust enrichment for goods transferred to sister units for captive use.

Analysis:
The Department filed an appeal against the rejection of refund claims amounting to ? 56,90,418 by the Original authority, which were later allowed by the Commissioner (A). The dispute centered around the assessable value of goods transferred to sister units for captive use. The Department contended that unjust enrichment applied even in cases of captive consumption, citing relevant legal precedents. However, the respondent argued that the goods were cleared to their own units without availing Cenvat Credit, as certified by the Cost Accountant and Range Superintendent. The Tribunal considered a previous decision where a refund was allowed for similar circumstances, emphasizing that the burden of excise duty had not been passed on to the sister units.

The Tribunal noted that the appellant had provided evidence, including an undertaking from the buying unit and a Chartered Accountant certificate, to support their claim that Cenvat Credit was not availed by the sister units. The Tribunal found that the appellant had discharged the burden of unjust enrichment, as the Revenue failed to produce evidence to the contrary. Relying on the persuasive value of the previous decision involving the same assessee, the Tribunal ruled in favor of the respondent, dismissing the Revenue's appeal and disposing of the cross objection.

In conclusion, the Tribunal upheld the Commissioner (A)'s decision to allow the refund claims, emphasizing that the burden of unjust enrichment had been satisfactorily addressed by the respondent in demonstrating that the excise duty burden had not been shifted to the sister units. The judgment serves as a precedent for similar cases involving captive consumption and refund claims based on the absence of Cenvat Credit utilization by the receiving units.