2018 (1) TMI 686 - AT - Central Excise

Refund of excess duty paid - unjust enrichment - Held that - the appellants herein being a SSI Unit, and not registered with the Central Excise Department, and cannot have charged Central Excise duty from their buyers - from the facts on record and from the copy of invoice produced by way of sample, it is clear that no Central Excise duty have been charged from the buyers of goods. Thus, whatever amount the appellant collected have to be treated as cum-duty price - refund of excess duty paid along with interest under the rules allowed - appeal allowed.

Summary

Issues Involved:
1. Whether the refund claim made by the appellant-manufacturers is hit by the doctrine of unjust enrichment.

Analysis:
The appeals filed by the appellant-manufacturers revolve around the issue of whether their refund claim is impacted by the doctrine of unjust enrichment. The appellants, unregistered units manufacturing coated abrasives, filed a refund claim based on the belief that they were entitled to exemption under Notification No. 8/2003-CE for branded goods manufactured for a specific company. Subsequently, they paid central excise duty along with interest for the relevant financial years after realizing their error. The adjudicating authority sanctioned a partial refund, citing a Supreme Court decision and rejecting the interest component. The Revenue challenged this decision, arguing that the appellants did not include excise duty in the price of goods and thus were not entitled to a refund based on cum-duty price benefit. The Commissioner (Appeals) sided with the Revenue, denying the refund on the grounds that the duty was paid voluntarily and not included in the price charged. However, the interest refund was upheld. The appellants appealed to the Tribunal, emphasizing that no excise duty was separately shown in the invoices, making the price cum-duty. They contended that the doctrine of unjust enrichment did not apply as no additional amount was collected post-invoicing. The Tribunal examined the facts, noting that as an SSI unit, the appellants could not charge central excise duty, and no duty was collected from buyers. Consequently, the Tribunal concluded that the appellants were entitled to the refund of excess duty paid along with interest, overturning the Commissioner (Appeals) decision.

In conclusion, the Tribunal allowed the appeals, determining that the appellants were eligible for the refund of excess duty paid along with interest. The decision was based on the finding that no central excise duty was charged from buyers, and the amount collected should be treated as cum-duty price. The Tribunal held that the Commissioner (Appeals) decision was untenable and set it aside, granting the appellants the relief sought.