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2018 (10) TMI 388 - AT - Central ExciseRefund of excise duty extra paid - test of unjust enrichment - excise duty extra paid on the discount amount which is returned by him to his dealers in the form of credit notes - Held that - This issue has also came up before this Tribunal in the appellant-assessee s own case for the previous period COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, INDORE VERSUS M/S. BRIDGESTONE INDIA PVT. LTD. 2015 (9) TMI 981 - CESTAT NEW DELHI wherein the department was in appeal and it has been held on the same issue by this Tribunal that in this particular business model of the appellant assessee, no excise element is being retained by them, that is to say that benefit of reduced price are being passed on to the ultimate customers and therefore, there is no question of unjust enrichment. In the present case, it can be seen that though the appellant assessee has charged the price of ₹ 2953/- inclusive of excise duty from their buyer, further his dealer after receiving the trade/ quantity discount has sold the same product at the reduced rate of ₹ 2,888/- to his customers. Thus it can be seen that the benefit of discount offered to the dealers by the manufacturers assessee has been ultimately been passed on to the ultimate customers. From the financial statement of the assessee also, it can be seen that for financial year 2016-2017 and 2017-2018 wherein under the head of other Current Assets, the appellant assessee had declared cenvat credit receivable. Thus, it can be seen that the appellant has been keeping the provision of such refund in his books of accounts which also proves the transparency in the transaction of the assessee - thus, the burden of duty has not been passed down to the customers by the appellant assessee and same has been borne by the appellant assessee themselves and therefore, they are certainly entitled for refund of excess paid by them on the discount amounts returned by them to the dealers in the form of credit notes. Refund allowed - appeal allowed - decided in favor of appellant.
Issues:
Refund of excise duty based on quantity discounts provided to dealers and the concept of unjust enrichment. Analysis: The appellant, engaged in manufacturing excisable goods, provided quantity discounts to dealers, leading to a refund claim of excess excise duty paid on discounted amounts. The Deputy Commissioner rejected the claim citing unjust enrichment, indicating the burden of excise duty passed on to customers. The Commissioner (Appeals) upheld the decision, prompting the appellant to appeal. The appellant argued that discounts were part of normal trade practice, with reduced prices passed on to buyers through credit notes. Citing previous tribunal decisions, the appellant contended that no unjust enrichment occurred as discounts were transparently passed on. The Departmental Representative supported the Order in Appeal's findings. The Tribunal noted that in the appellant's business model, no excise element was retained, ensuring reduced prices reached end customers. Examples showed discounts passed down to ultimate buyers, demonstrating no unjust enrichment. Financial statements revealed provisions for refund, supporting the transparency of transactions. Relying on a Supreme Court decision, the Tribunal held that as the burden of duty was not passed on, the appellant was entitled to the refund. The Commissioner (Appeals) decision was set aside, allowing the appeal with consequential benefits for the appellant.
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