2018 (2) TMI 1453 - AT - Central Excise

Refund claim - price variation clause - Since the discharge of Central Excise Duty is based on the price variation clause the appellant sought permission for provisional assessment for payment of Central Excise Duty Said provision assessments were finalized and refund arose - rejection of refund on the ground of unjust enrichment - Held that - there is no dispute as to the facts the first appellate authorities order in all these appeals in Order-ln-Appeal 30/06/2008 held in favour of appellant on merits has not been challenged by the revenue before higher Judical fora. Hence, on merits in all these appeals appellant entitled to refund of the excess duty paid due the deductions towards non achievement of GPF and we hold so. The ratio of the decision of the Hon ble High Court Gujarat-Accra Pac (I) Pvt Ltd 2013 (2) TMI 795 - GUJARAT HIGH COURT would apply, wherein it was held that once an Issue is decided and against which no further proceedings are carried then such decision IS bending of all parties. Unjust enrichment - Held that - Singareni Collieries Company Ltd (SCCL) is a Government of India undertaking - from the certificate submitted to lower authorities it is indicated that appellant had not passed on the incident of Central Excise Duty to the recipient of the goods hence it has to be held that the appellant has passed hurdle of unjust enrichment in the cases in hand and should given the refund of amount paid excess. Appeal allowed - decided in favor of appellant.

Issues Involved:
1. Refund of Central Excise Duty due to non-achievement of Guaranteed Powder Factor (GPF).
2. Unjust enrichment.

Detailed Analysis:

1. Refund of Central Excise Duty due to non-achievement of Guaranteed Powder Factor (GPF):

The appellant, engaged in the manufacture of explosives, supplied explosives to Singareni Collieries Company Ltd (SCCL) under an agreement that included a Guaranteed Powder Factor (GPF) clause. The GPF determines the volume of rock that can be excavated using the supplied explosives. If the appellant failed to achieve the GPF, SCCL made deductions from the payment, which included excise duty and sales tax/VAT. The appellant sought a refund of the excess duty paid due to these deductions. The provisional assessments were finalized, and the refund claims were initially rejected on merits. However, the first appellate authority allowed the refund on merits but remanded the matter to reconsider the issue of unjust enrichment. The adjudicating authority credited the refund amount to the Consumer Welfare Fund, finding that the appellant had not crossed the hurdle of unjust enrichment. The first appellate authority again rejected the refund claim on merits in subsequent orders.

The appellant argued that the first order of the Commissioner (Appeals) in their favor on merits was not contested by the revenue, thus attaining finality. The appellant also submitted a certificate from SCCL indicating that the deductions were inclusive of excise duty and sales tax/VAT, which was not considered by the lower authorities. The appellant cited various tribunal decisions supporting their claim that deductions for non-achievement of GPF should be considered for refund.

2. Unjust Enrichment:

The appellant contended that the issue of unjust enrichment was not properly addressed by the first appellate authority. They submitted a certificate from SCCL, a Government of India undertaking, stating that the deductions made from the appellant's bills were inclusive of excise duty and sales tax/VAT. This certificate was produced before the lower authorities but was not taken into account. The appellant argued that this certificate demonstrated that they had not passed on the incidence of central excise duty to the recipient of the goods, thus overcoming the hurdle of unjust enrichment.

Judgment:

The tribunal carefully considered the submissions and perused the records. It noted that the first appellate authority's order in favor of the appellant on merits was not challenged by the revenue, thus attaining finality. Consequently, the appellant was entitled to a refund of the excess duty paid due to deductions for non-achievement of GPF. The tribunal found the first appellate authority's findings in the impugned orders on merits to be incorrect and unsustainable.

Regarding unjust enrichment, the tribunal referred to the certificate from SCCL, which indicated that the deductions were inclusive of excise duty and sales tax/VAT. This certificate demonstrated that the appellant had not passed on the incidence of central excise duty to the recipient, thus overcoming the hurdle of unjust enrichment. Therefore, the appellant was entitled to the refund of the excess amount paid.

The tribunal set aside the impugned orders and allowed the appeals with consequential reliefs.

Conclusion:

The tribunal concluded that the appellant was entitled to a refund of the excess duty paid due to deductions for non-achievement of GPF and had successfully overcome the hurdle of unjust enrichment. The impugned orders were set aside, and the appeals were allowed with consequential reliefs.

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