2009 (7) TMI 302 - AT - Central Excise

Refund claim of excess payment of duty - unjust enrichment duty paid on provisional contract price which was finalized at a lower price later - Tribunal in the case of Universal Cylinders Ltd. v. CCE Jaipur held that if the contract entered into assessee and their customers contain price variation clause customer refusing the price of goods deducted the difference amount from payment already made to assessee. It is further held that in these circumstances the Revenue cannot claim that incidence of duty has been borne by the assessee s customers. Hence unjust enrichment not invocable refund admissible Revenue s appeal is rejected

Summary

The Appellate Tribunal CESTAT NEW DELHI heard an appeal regarding the rejection of a refund claim by the original authority on the grounds of unjust enrichment. The case involved the supply of explosives to a subsidiary of Coal India Ltd. The Revenue filed the appeal after the Commissioner (Appeals) passed an order following a Tribunal decision in a similar case. The Department did not accept the Tribunal's decision and filed an appeal before the High Court. The Respondent argued that the Tribunal had allowed refunds on identical issues in previous cases. After hearing both sides, the Tribunal found that the Respondent, a manufacturer of explosives, supplied goods at a provisional price which was later finalized at a lower rate. The Tribunal referred to a previous case where a similar refund claim was allowed, and concluded that the appeal filed by the Revenue was rejected. The decision was based on the fact that the incidence of duty had not been borne by the Respondent's customers due to a price variation clause in the contract. The Tribunal emphasized that the Respondent had paid back the excess amount and duty to the customer, therefore justifying the refund claim. The order was dictated and pronounced in open court.