2024 (4) TMI 819 - AT - Central Excise

Refund of Excess duty, claimed pursuant to finalisation of provisional assessments - duty burden has already been passed on to the ultimate consumer at the time of clearance of goods or not - principles of unjust enrichment - HELD THAT - In the respondent s own case PRINCIPAL COMMISSIONER OF CENTRAL TAX VERSUS M/S. VIKRANT TYRES LTD, PRESENTLY KNOWN AS JK TYRES AND INDUSTRIES PLANT-I 2021 (10) TMI 586 - KARNATAKA HIGH COURT , the Hon ble High Court Karnataka considering more or less similar arguments and scrutiny of the claims from the angle of applicability of unjust enrichment and the refund sanctioned by the Revenue to the respondent from time to time, held that The authorities have admitted that the credit notes were issued by the assessee to their dealer representing various discounts which have been actually passed on, in accordance with marketing circulars/policies. It is also observed that on verification of sample depot invoices at the time of completion of provisional assessment, that the assessee has not issued any cenvatable invoice from the depot which are prescribed document for availment of cenvat credit under Cenvat Credit Rules, 2004. Thus, it cannot be held that the assessee has not subjected to the test of unjust enrichment. The said judgment of the Hon ble High Court is binding on all concerned being the judgment of the jurisdictional High Court in view of the judgment of the Larger Bench of the Tribunal in J.K. TYRE INDUSTRIES LTD. VERSUS ASST. COMMR. OF C. EX., MYSORE 2016 (11) TMI 911 - CESTAT BANGALORE . Besides, the aforesaid judgment of the Hon ble Karnataka High Court has been accepted by the Revenue. The impugned order of Learned Commissioner(Appeals) is upheld and the Revenue s appeals being devoid of merit are dismissed.

Summary

Issues Involved:
The judgment involves issues related to refund claims of excess duty, unjust enrichment, and applicability of legal provisions u/s Section 12B of the Central Excise Act, 1944.

Refund Claims of Excess Duty:
The appeals were filed by the Revenue against the Order-in-Appeal passed by the Commissioner of Central Excise, Mangalore. The respondents, engaged in the manufacture of Tyres, Tubes, and flaps, requested provisional assessment of their goods due to discounts passed on to customers. After final assessments, refund claims were filed for excess duty paid. The Revenue contended that the duty burden had already been passed on to the ultimate consumer at the time of clearance, making the test of unjust enrichment applicable.

Unjust Enrichment and Legal Provisions:
The main issue revolved around whether the respondents had passed the test of unjust enrichment in relation to the refunds claimed after finalization of provisional assessments. The Revenue argued that the burden of duty had been passed on to the buyer, making the claim for refund questionable under Section 12B of the Central Excise Act, 1944. The respondent's advocate cited CBEC instructions and a High Court judgment to support their position that the test of unjust enrichment was not applicable in this scenario.

Judgment and Legal Precedents:
The Tribunal considered arguments from both sides and examined relevant legal provisions and precedents. It was noted that the Hon'ble High Court of Karnataka had previously ruled on a similar case, emphasizing the need to establish that the burden of duty had not been passed on to any other person for a refund claim to be valid. The Tribunal upheld the decision of the Learned Commissioner(Appeals) based on the binding nature of the High Court judgment and dismissed the Revenue's appeals as lacking merit.