2008 (2) TMI 152 - AT - Central Excise

Refund claim of excess amount of duty paid issuance of credit notes - consignee had not availed the credit of the excess amount of duty paid by the appellant as revealed from the certificate of the jurisdictional Superintendent of Central Excise - no dispute that the duty incidence was not availed by the customers - held that the assessee is eligible for refund unjust enrichment not applicable

Summary

Issues:
Refund claim rejection on the ground of unjust enrichment.

Analysis:
The appellant, engaged in the manufacture of sponge iron, filed an appeal against the rejection of their refund claim based on unjust enrichment. They had cleared goods at the old rate of duty despite a rate reduction from 16% Adv. to 8% Adv. on the budget day. The adjudicating authority sanctioned the refund claim, but the Revenue appealed. The Commissioner (Appeals) rejected the claim citing unjust enrichment. The appellant argued that the adjudicating authority had allowed the refund claim after verifying a certificate from the Superintendent and credit notes, referencing relevant court decisions and a Tribunal case.

The Revenue, represented by the Ld. DR, supported the Commissioner's findings, stating that the credit notes were insufficient to prove that the duty incidence had not been passed on. Upon reviewing the records and arguments from both sides, the Member found that the Superintendent's certificate confirmed that the consignee did not avail the excise duty credit. The credit notes issued by the appellant were also examined, showing that the duty incidence was not passed on to customers as Cenvat credit. The Member referred to a case where the Hon'ble Punjab & Haryana High Court rejected a similar appeal by the Revenue, questioning the impact of post-clearance adjustments like credit notes on unjust enrichment under Section 11B of the Central Excise Act, 1944. Additionally, the Member cited a Tribunal case where refund eligibility was upheld when credit notes were issued provisionally, and transactions were settled with higher payments made by the assessee.

Consequently, the Member concluded that the consignee did not avail the credit of the excess duty paid by the appellant, as confirmed by the Superintendent's certificate. Given the examination of credit notes, the Commissioner (Appeals)'s decision was overturned, and the adjudicating authority's order was reinstated, allowing the appeal for the refund claim. The order was pronounced on 4-2-2008.