2007 (12) TMI 109 - AT - Service Tax

Appeal against decision of comm.(A) of sanction of refund - respondent did not submit any evidence in support of unjust enrichment there is force in submission of revenue that comm.(A) cannot allow the refund claim on the basis of new evidence, which is hit by Rule 5 - no evidence shall be admitted unless the comm.(A) records in writing the reasons for its admission - impugned order not sustainable - matter remanded to ad. authority to examine the evidences in relation to unjust enrichment

Summary

Issues:
1. Appeal against order directing refund under Section 11B of Central Excise Act.
2. Unjust enrichment claim.
3. Admission of new evidence before Commissioner (Appeals).

Analysis:
1. The appeal was filed by the Revenue against an order directing a refund of Rs.1,08,109 under Section 11B of the Central Excise Act. The respondent had filed a refund application for excess tax payment, which was initially sanctioned but later denied on the grounds of unjust enrichment. The Commissioner (Appeals) allowed the refund claim, prompting the Revenue to appeal.

2. The Revenue contended that the respondent failed to provide evidence supporting the claim of unjust enrichment, which is a crucial factor in refund cases. The Revenue argued that allowing the refund based on new evidence without proper justification violates Rule 5 of the Central Excise (Appeals) Rules, 2001. The Tribunal noted that the Commissioner (Appeals) did not record any reasons for admitting new evidence, rendering the impugned order unsustainable. However, the respondent did submit the necessary evidence before the Commissioner (Appeals), leading to a remand back to the adjudicating authority for further examination of the evidence related to unjust enrichment.

3. The respondent's counsel argued that the Commissioner (Appeals) had thoroughly examined all documents provided by the respondent and had the authority to decide on the refund claim without remanding the matter. Despite this, the Tribunal found merit in the Revenue's argument regarding the lack of proper documentation and justification for admitting new evidence. As a result, the appeal was allowed for remand to the adjudicating authority for a detailed examination of the evidences related to unjust enrichment.

This judgment highlights the importance of providing sufficient evidence to support refund claims, especially concerning the principle of unjust enrichment. It also underscores the procedural requirements for admitting new evidence before appellate authorities, emphasizing the need for proper justification and documentation in such cases.