2023 (10) TMI 879 - HC - Central Excise

Violation of principles of unjust enrichment - failure to prove that duty burden has not been passed ignoring the evidence of records in the form of Books of Accounts, certificate from Oil marketing PSUs, especially in the backdrop of presumptive statutory provisions under Section 12B of Central Excise Act, 1944 - HELD THAT - The assessee has shown duty element in the invoices as per the provisions of S.12-A of the Act. It is also stated that the same has not been recovered from their customers and the excess paid amount of Rs.32,65,057/- is shown as outstanding balance as receivables in their balance-sheet - Nonetheless, nothing concrete has been placed on record that the duty element shown in the invoices issued to customers has not been recovered from the customers. Under such circumstances, the concurrent finding of Tribunal that it is a case of unjust enrichment cannot be faulted with and the assessee has rightly been held not entitled to refund of Rs.32,65,057/- as excess amount of excise duty. In none of the documents viz. Books of Accounts or certificate from Oil marketing PSUs, as mentioned in the substantial question framed, the assessee has shown to have not actually recovered the excess excise duty from the buyers. The substantial question of law is answered in the affirmative and in favour of the revenue - Appeal dismissed.

Summary

Issues involved:
The judgment deals with an appeal under Section 35G of the Central Excise Act, 1944 challenging the order of the Customs, Excise and Service Tax Appellate Tribunal, focusing on the issue of unjust enrichment and burden of proof regarding passing on of excise duty to buyers.

Summary:
The controversy in the case revolves around Section 12B of the Central Excise Act, 1944, which presumes that the incidence of duty has been passed on to the buyer unless proven otherwise. The Assessee, M/s GAIL (India) Limited, filed a refund claim for excess excise duty for the period January 1999 to October 1999, which was rejected by the authorities at various levels.

The Lower Appellate Authority and the Tribunal both concluded that the Assessee failed to provide concrete evidence that the excess excise duty had not been recovered from the buyers. Despite producing a certificate from a Chartered Accountant indicating short recovery of duty, the Assessee did not present any certificate from customers for the relevant period showing non-payment of excise duty.

The Tribunal referred to a similar matter involving the Assessee where a refund claim was rejected due to the duty incidence being passed on to buyers, as evidenced by invoices showing higher duty levels. The absence of evidence in the form of Books of Accounts or certificates from Oil marketing PSUs supporting the Assessee's claim of non-recovery of excess excise duty led to the dismissal of the appeal.

In conclusion, the Tribunal upheld the decision that the Assessee failed to prove that the duty burden had not been passed on to the buyers, affirming the principle of unjust enrichment. The appeal was dismissed in favor of the revenue.