2005 (9) TMI 9 - AT - Central Excise

Refund Unjust enrichment - CA certificate produced showing that duty incidence not passed on and amount is shown as duty receivable - appellants having borne duty burden eligible to its refund

Summary

Issues:
Appeal against rejection of refund claim on grounds of unjust enrichment and entitlement to exemption under Notification No. 6/2002-C.E.

Analysis:
The appeal involved a dispute regarding the entitlement to a refund claim under Notification No. 6/2002-C.E. for the exemption of duty on pipes procured for a water distribution project. The appellants had entered into an agreement with a municipal corporation where they were solely responsible for bearing taxes and duties. The manufacturer had paid the duty on the pipes, which the appellants had borne and not passed on to the municipal corporation. The Deputy Commissioner rejected the refund claim, citing that duty had already been recovered from the municipal corporation. The Commissioner (Appeals) upheld this decision based on the concept of unjust enrichment, implying that the burden of duty had been passed on. The appellants contended that they were entitled to the exemption and filed for a refund claim. They argued that even if the manufacturer did not claim the exemption, the buyer could still claim it through a refund claim, as established in previous case laws. The appellants provided substantial evidence, including certificates, invoices, and certifications from a Chartered Accountant, to prove that they had borne the duty burden and not passed it on. The Tribunal found the Commissioner's decision unsustainable, emphasizing that the documents presented by the appellants were genuine and sufficient to support their claim. The Tribunal ruled in favor of the appellants, allowing the appeal and granting consequential relief.

This judgment highlights the importance of substantiating refund claims with concrete evidence of duty payment and non-passing of the burden to avoid unjust enrichment issues. It also clarifies that the entitlement to exemption can be claimed by the party bearing the duty burden, even if the manufacturer does not claim it. The decision underscores the significance of documentary evidence and certifications to support refund claims and challenges the assumption of unjust enrichment without substantial proof.