2018 (12) TMI 2 - AT - Central Excise

Refund claim of duty paid - duty were paid on the products which were exempted under N/N. 6/2002 dated 01.03.2002 - rejection of refund on the ground that exemption is not available to the respondent because they had not claimed it before clearing the goods from the factory gate - denial of refund also on the ground of unjust enrichment - Held that - There is nothing in the notification which requires assessee to claim the benefit of this notification prior to the removal of goods from the factory and therefore, first appellate authority correctly sanctioned refund on merits. Unjust enrichment - Held that - The established legal principle is that the burden of proof that the duty incidence has not been passed on to the customer rests upon the claimant. The respondent herein has adequately discharged this duty and the documents submitted by them have been examined in detail by the first appellate authority while allowing their appeal - What is being claimed is just the duty paid by them on their final product which has not been passed on to their customers. Therefore, the question of indirectly passing on the incidence of duty to the customers does not arise. Refund is to be allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Claim for refund of duties paid on PVC pipes exempted under Notification No.6/2002.
2. Rejection of claim by lower authority, subsequent appeal, and allowance by first appellate authority.
3. Revenue's appeal against the first appellate authority's decision based on merits and unjust enrichment.

Analysis:
1. The appeal involved a claim for a refund of duties paid on PVC pipes exempted under Notification No.6/2002. The respondent, a manufacturer, filed the refund claim for duties paid on products used in a water supply scheme. The lower authority initially rejected the claim due to lack of supporting documents. However, the first appellate authority allowed the appeal, finding the claim admissible on merits and not hit by unjust enrichment as the duty burden was not passed on to customers.

2. The revenue's appeal was based on two grounds: merits and unjust enrichment. They argued that the respondent did not claim the exemption benefit at the time of goods removal from the factory gate, making them ineligible for a refund. Additionally, the revenue contended that the burden of proof regarding unjust enrichment was not adequately addressed by the first appellate authority.

3. The Tribunal analyzed the exemption notification and found no requirement for the assessee to claim the benefit before goods removal from the factory gate. Therefore, the first appellate authority correctly sanctioned the refund on merits. Regarding unjust enrichment, the burden of proof lies with the claimant, which the respondent adequately discharged. The Tribunal concluded that as the duty claimed for refund was on the final product and not indirectly passed on to customers, the revenue's appeal was rejected, upholding the impugned order.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by both parties, and the Tribunal's reasoning for upholding the decision in favor of the respondent.