2018 (4) TMI 892 - AT - Central Excise

Refund claim - finalization of the provisional assessment - denial on the ground of unjust enrichment - Held that - the observation of the learned Commissioner with reference to Section 12 B of the Act is misplaced, as there is no material on record to assume that the appellant have passed on more duty liability then what is indicated in its invoices - it is evident that the appellant had paid more duty at the time of clearance from the factory to depot, but have ultimately charged and realized less duty on the sale effected from the Depot. The refund has been denied simply based on presumptions, which is not tenable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund denial based on unjust enrichment in provisional assessment finalization for 'Aerated Water' and 'Post Mix Canisters'.

Analysis:
The issue in the appeals revolved around the denial of refund to the appellants, who are manufacturers of 'Aerated Water' and 'Post Mix Canisters', based on the concept of unjust enrichment upon finalization of provisional assessment. The Assistant Commissioner, in the Orders-in-Original, acknowledged the duty overpayment by the appellants and deemed them eligible for a refund, subject to unjust enrichment conditions. However, the refund claims were rejected on the grounds that the appellants failed to provide sufficient evidence to prove non-passing of the duty incidence to customers.

The appellants contended that all necessary documents establishing non-passing of duty incidence were submitted during the finalization of provisional assessment. They argued that the prices at which excise duty was paid provisionally were higher than the prices at which goods were sold to customers, indicating excess duty payment by the appellants themselves. Refund claims for previous years were granted under similar circumstances, supported by the same set of documents. The Commissioner (Appeals) upheld the refund denial, citing missing invoices and lack of Central Excise duty details in some invoices as reasons for rejecting the claim based on unjust enrichment.

In the judgment, it was noted that the appellant had submitted all essential documents during finalization for tax liability determination, and the Assistant Commissioner had computed the final tax liability based on these documents. The Tribunal referenced a previous case to emphasize that non-separate display of Excise duty on invoices does not automatically imply passing on the duty incidence. The Tribunal found no justification for the lower courts' observations that the appellant did not provide sufficient evidence or vouchers to discharge the unjust enrichment onus. Moreover, the Tribunal highlighted that there was no concrete finding regarding the passing of duty incidence to customers, and the denial of refund was based on presumptions rather than evidence.

Conclusively, the Tribunal allowed the appeals, setting aside the impugned orders and directing the Adjudicating Authority to grant the refund within 60 days from the order date, along with applicable interest, as per rules.