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2023 (11) TMI 159 - AT - Central ExciseRefund claim - rejection of claim of the appellant for non-production of challans showing nil payment of duty on those goods in the warehouse - principles of unjust enrichment - HELD THAT - It is well-settled that show cause notice is the foundation of all proceedings and in appellate disposal, only the issue in appeal may be argued or abetted. Failure to challenge assessment as an impediment to sanction of refund was not an issue thus far in the present dispute and in the absence of appeal/memorandum of cross-objections on behalf of Revenue, a fresh ground entered by Learned Authorized Representative does not merit consideration. The original authority has premised ineligibility with the finding that the date of sale of goods being undisputedly after the levy came into force, there is no alternative but for duty to be discharged. This is an improper appreciation of the nature of this levy and, more so, on induction of impugned goods into the list of taxable goods. Being a tax on manufacture, goods produced prior to the levy having come into force are not to be subjected to duties of central excise - stock transfer , as an internal nomenclature, has nothing to do with clearance of goods which would be subjected to dutiability from 1st March 2011. It is clear from the communication of the Central Board of Excise Customs (CBEC) supra that the specific aspect referred to in the order of the original authority is restricted to goods lying in the registered factory premises as on date of imposition of levy which, uncontestedly, is not the issue here. As the impugned goods were not dutiable, eligibility for refund should follow. The claim of the appellant being that duty had, nonetheless, been discharged, it was incumbent upon them to demonstrate such payment. The appellant had submitted details of goods lying elsewhere and to the extent that these can be correlated, that onus will stand discharged. It is on record that the appellant had, in proceedings before the original authority, submitted that challans could be produced and it is on record that these had not been. Therefore, it is only appropriate that this be complied with and, upon such, there need be no further controversy over duty having been discharged on non-dutiable goods. Section 11B mandates that all refunds undergo the test of bar of unjust enrichment and it falls upon the appellant to successfully navigate that. The refund application restored before the original authority for fresh processing - impugned order set aside - appeal allowed.
Issues involved:
The issues involved in the judgment are the liability to duties of central excise on stock manufactured prior to a specific date, the claim for refund of duties paid, rejection of refund claim by the competent authority, challenge before the Commissioner of Central Excise (Appeals), Mumbai Zone -I, and the interpretation of legal provisions regarding duty liability on goods transferred to a warehouse. Comprehensive details: 1. The appellant, a manufacturer of branded garments excluded from central excise duties by a notification, claimed refund of duties paid on stock manufactured before a certain date. The claim was based on the lack of clarity in law and a communication from the Central Board of Excise & Customs. The appellant contended that duty liability had been discharged on the entire stock sold after the exemption was rescinded, while goods removed from the factory before the levy came into force were not liable to duty. 2. The original authority held that the transfer of goods to the warehouse was a stock transfer and duty was liable on all stock sold after the levy became applicable. The rejection of the claim was based on the absence of challans showing nil payment of duty on the goods in the warehouse. The first appellate authority emphasized the requirement of prescribed documents and the bar of unjust enrichment for refund claims. 3. The Learned Authorized Representative argued that refunds for duty liability could only be claimed through a challenge to assessment, citing a Supreme Court judgment. The issue of challenging the assessment as a prerequisite for refund sanction was not raised earlier in the dispute, and without any appeal or memorandum of cross-objections from the Revenue, the new ground raised did not merit consideration. 4. The first appellate authority raised the issue of limitation regarding the refund eligibility, but this conclusion should be based on the original authority's findings, which were not properly addressed. The original authority's finding that goods sold after the levy came into force were liable to duty was deemed improper as goods produced before the levy should not be subjected to central excise duties. 5. As the impugned goods were found to be non-dutiable, eligibility for refund was established. The appellant needed to demonstrate the payment of duty on the stock, and the submission of relevant details and challans would discharge this burden. The refund application was restored for fresh processing before the original authority to address the unjust enrichment requirement and other pre-requisites for refunds as mandated by Section 11B.
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