2009 (5) TMI 222 - AT - Central Excise

Refund Job work under Compounded Levy Scheme - The respondent paid duties under Compounded Levy Scheme. The dispute in respect of gallery portion of a stenter was the subject matter of litigation, which was finally decided by the Apex Court. As the duty was paid by the assessee on the capacity inclusive of gallery portion, they sought refund of the excess duty so paid by them. - the manufacturing activity was carried on job charges basis. - The invoices do not reflect any duty of excess and only job charges were being collected by the assessee. - Such job charges were inclusive of duty and determined solely on the basis of market forces and were independent of duty payable under the Compounded Levy Scheme. The respondents have also placed on record the certificates issued by the Chartered Accountant showing that no separate recoveries were made by the respondents from their merchant-manufacturers held that refund cannot be denied on ground of unjust enrichment refund allowed

Summary

Issues:
- Dispute over refund of excess duty paid under Compounded Levy Scheme
- Unjust enrichment presumption rebuttal by the appellants

Analysis:
1. The case involved an appeal by the Revenue against the order passed by the Commissioner (Appeals) regarding the refund of excess duty paid by the assessee under the Compounded Levy Scheme. The dispute centered around the gallery portion of a stenter, which was previously litigated and decided by the Apex Court. The assessee sought a refund of the excess duty paid, which was sanctioned by the Assistant Commissioner. The Revenue filed an appeal against this order, which was dismissed by the Commissioner (Appeals), leading to the present appeal before the Appellate Tribunal.

2. The Revenue contested a part of the refund, arguing that the appellants failed to rebut the presumption of unjust enrichment. The Commissioner (Appeals) noted that the assessee operated under the Compounded Levy Scheme on a job charges basis, with invoices reflecting no duty of excess, only job charges. The duty paid for the gallery portion was a fraction of the total duty under the scheme. Moreover, other similarly situated manufacturers had been refunded the excess duty collected for the gallery portion. The Commissioner found that since the appellants did not sell the processed fabric but performed job work and collected job charges, the question of recovering excess duty did not arise. The job charges were inclusive of duty and determined independently of the duty payable under the scheme.

3. The Commissioner also considered certificates from a Chartered Accountant, indicating that no separate recoveries were made by the appellants from their merchant-manufacturers. In the absence of effective rebuttal by the Revenue in their appeal, the Tribunal upheld the Commissioner's reasoning. The issue was thoroughly discussed by the Commissioner, and no flaws were identified in the decision. Consequently, the appeal filed by the Revenue was rejected, affirming the refund of the excess duty to the assessee.

This detailed analysis highlights the key aspects of the judgment, focusing on the dispute over the refund of excess duty under the Compounded Levy Scheme and the crucial issue of rebutting the presumption of unjust enrichment raised by the Revenue.