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2024 (12) TMI 792 - AT - Central ExciseRejection of refund claim under exemption notification No.12/2012-C.E. due to non-fulfillment of conditions - Rejection of refund claim under exemption notification No.108/95-C.E. due to procedural lapses - unjust enrichment. Rejection of refund claim under exemption notification No.12/2012-C.E. due to non-fulfillment of conditions - case of appellant is that the said proviso to Sl.No.41 was brought in only by an amendment by Notification No.12/2015-CE dated 01.03.2015, and was therefore not applicable for the relevant period - Unjust enrichment - HELD THAT - The period involved in this refund claim is March 2013 whereas the condition inserted in the proviso was by notification No. 12/2015-C.E., dated 1-3-2015, and thus would not govern the aforementioned period. During March 2013, the requirement of condition 41 was for the goods to be exempted from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under section 3 of the said Customs Tariff Act when imported into India. Thus, by the very existence of a customs exemption notification simpliciter, namely, by virtue of the exemption provided at Sl.No.507 of the notification No.12/2012-Cus dated 17-03-2012, the said condition 41 as it existed for the relevant period, stood satisfied, so as to entitle the appellant to the benefit of Sl.No.336 of the notification No.12/2012-CE dated 17-03-2012 - the learned Appellate Authority erred in placing reliance on the proviso that came to be inserted subsequently by notification No. 12/2015-C.E., dated 1-3-2015, for denying the appellant the benefit of the said Sl.No.336 of the aforementioned Notification No.12/2012-CE ibid. It is pertinent that the clearances of the goods originally were without payment of duty claiming the benefit of the exemption notification and duty was paid as per the directions of the jurisdictional superintendent. When the customer is aware of its entitlement to exemption it stands to reason that they will not entertain a request by the appellant to recoup the duty that was paid on the jurisdictional officer s directions. In such circumstances, there is no reason to disbelieve the CA certificate enclosed to the appeal paperbook to show that the duty paid has not been passed on and it merits acceptance as sufficient proof that the refund due to the appellant is not hit by the bar of unjust enrichment. Rejection of refund claim under exemption notification No.108/95-C.E. due to procedural lapses and unjust enrichment - non-production of the necessary certificate at the time of clearance of goods - non-discharge of burden of proof cast on them to overcome the bar of unjust enrichment - HELD THAT - The excise duty certificate indicates that the appellant is a sub vendor of M/s. Shyam Indus Power Solution Pvt ltd. The excise duty certificate further certifies that the said equipment and material are intended for use by MPMKVVCL and that it is to be financed by Asian Development Bank through loan No.2732-IND duly approved by the Government of India. The certificate also states that it is issued in pursuance of the requirement under Notification No.108/95-CE dated 28-08-1995 as amended and that excise duty exemption may be allowed against the above supplies by the main contractor sub-contractor as listed in Annexure I - The fact that the appellant had not produced the said certificate at the time of clearance of goods has weighed with the learned appellate authority and he has expressed his disagreement with the appellant s contention that it is a procedural lapse while rejecting the claim. Since the exemption is to the goods supplied, the aforementioned certificate countersigned and issued in the manner stated would be the mandatory requirement that fulfills the eligibility clause and requires a strict compliance. Once such a certificate has been issued and is in existence, the production of the same before the jurisdictional officer is only of a directory nature, and which being a procedural requirement to ensure the genuine nature of the transaction and that the goods are indeed intended for use as claimed, can be fulfilled even post facto. Indisputably the certificate dated 10.01.2013 so produced was contemporaneously in existence at the time of clearance of the goods, the said clearances being made in February 2013 and June 2013. The grievance is only on its subsequent production - the belated production of the certificate is a procedural lapse that is condonable and insufficient to deny the substantial benefit of the notification given these facts that the goods have been consigned clearly indicating the consignee address as MPMKVVCL in the invoices, there is no allegation that the goods have not been received or not put to their intended use, and the said excise duty exemption certificate, complete in all respects, was issued and in existence - the benefit of the said exemption notification is required to be extended to the appellant. Unjust enrichment - HELD THAT - The customer who is aware of its entitlement to exemption and has provided the exemption certificate has categorically asserted that excise duty will not be paid to the appellant given that the exemption is mentioned in their purchase order citing the relevant exemption Notification No.108/95 dated 28.08.1995. In such circumstances, there is no reason to disbelieve the CA certificate enclosed to the appeal paperbook to show that the duty paid has not been passed on and it merits acceptance as sufficient proof that the refund due to the appellant is not hit by the bar of unjust enrichment. The impugned order is set aside - appeal allowed.
Issues Involved:
1. Rejection of refund claim under exemption notification No.12/2012-C.E. due to non-fulfillment of conditions. 2. Rejection of refund claim under exemption notification No.108/95-C.E. due to procedural lapses and unjust enrichment. Issue-wise Detailed Analysis: 1. Rejection of Refund Claim under Exemption Notification No.12/2012-C.E.: The appellant challenged the rejection of their refund claim premised on exemption notification No.12/2012-C.E. dated 17-03-2012. The central issue was the appellant's alleged failure to fulfill the conditions outlined in the notification. Specifically, the appellate authority denied the refund under Sl.No.336 of the notification, arguing that the appellant did not meet the conditions stipulated in condition No.41, which required customs duty exemption under Sl.No.507 of notification No.12/2012-Cus. The appellant contended that the proviso to condition No.41, which mandated compliance with customs conditions, was not applicable during the relevant period (March 2013) as it was introduced later by Notification No.12/2015-C.E. The tribunal found merit in the appellant's argument, noting that the proviso was indeed introduced after the relevant period. Therefore, the appellant was entitled to the exemption under Sl.No.336, as the customs exemption condition was satisfied by the existence of the customs notification No.12/2012-Cus. Additionally, the tribunal addressed the issue of unjust enrichment, accepting the Chartered Accountant's certificate as proof that the duty paid was not passed on to the customer, thereby not barred by unjust enrichment. 2. Rejection of Refund Claim under Exemption Notification No.108/95-C.E.: The appellant's refund claim under exemption notification No.108/95-C.E. was rejected due to non-production of the necessary certificate at the time of clearance and failure to prove non-passing of duty incidence. The appellant argued that the requirement to produce the certificate before clearance was procedural, not substantive, and that the substantial conditions for exemption were met. The tribunal agreed, citing precedent that procedural lapses should not deny the substantive benefit of exemption. The tribunal noted that the certificate was contemporaneously in existence at the time of clearance and that its subsequent production was a procedural lapse that could be condoned. On the issue of unjust enrichment, the tribunal accepted the Chartered Accountant's certificate and correspondence from the appellant's customer, which confirmed that the duty was not passed on, thus overcoming the bar of unjust enrichment. Conclusion: The tribunal allowed both appeals, setting aside the impugned orders and granting consequential relief to the appellant. The tribunal emphasized that procedural lapses should not deny substantive benefits when the eligibility criteria are met, and unjust enrichment claims must be substantiated with evidence, which the appellant successfully provided in both cases.
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