2025 (1) TMI 840 - AT - Central Excise

Refund of excess Central Excise Duty paid for the months of November 2015 and December 2015 - rejection of refund claim based on the evidence provided by the appellant - principles of unjust enrichment - HELD THAT - The appellant had submitted the details of errors in ER-1 returns filed and details of correct figures that should have been considered while verifying the correctness of total duty actually payable and refund claimed vide their letter dated 18.02.2016. They have also submitted the attested copies of invoices issued in relation to clearances made during the period in dispute vide letter dated 03.12.2016 which clearly supports the correct figures as submitted by the appellant vide letter dated 18.02.2016. The excess duty paid by the Appellant has been reflected as Advances and loans in Note 18 of the Annual Accounts of 2015-16. However the lower authorities have simply brushed aside the accounting entries available in the Annual Accounts for the year 2015-16 without giving any valid finding as to why they are not acceptable - The Appellant has submitted enough evidence to substantiate their claim of excess payment of duty. The documents submitted by the Appellant along with the Chartered Accountant submitted by them establishes that there was an excess payment of duty by the Appellant during the months of November 2015 and December 2015. Principles of unjust enrichment - HELD THAT - The Appellant has not produced any documents regarding crossing of the bar of unjust enrichment. Accordingly the matter is required to be remanded back to the adjudicating authority for the purpose of verification of the documents on the eligibility of refund from the unjust enrichment angle. Conclusion - The documents submitted by the Appellant establish that there was an excess payment of duty by the Appellant during the months of November 2015 and December 2015 and the Appellant is eligible for the refund subject to verification of unjust enrichment . The impugned order is set aside and the issue is remanded back to the adjudicating authority only for the limited purpose of verification of the issue of unjust enrichment before he sanctions the refund claim - Appeal disposed off by way of remand.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the appellant is entitled to a refund of excess Central Excise Duty paid for the months of November 2015 and December 2015.
Whether the lower authorities erred in rejecting the refund claim based on the evidence provided by the appellant.
Whether the issue of 'unjust enrichment' has been adequately addressed and whether it bars the refund claim.
Whether the procedural requirements regarding provisional assessment and revision of returns were correctly interpreted and applied by the authorities.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Refund of Excess Excise Duty

Relevant Legal Framework and Precedents: The appellant's claim is based on the Central Excise Rules, which govern the payment and refund of excise duties. The procedural guidelines for filing returns and claiming refunds are crucial to this issue.
Court's Interpretation and Reasoning: The tribunal found that the appellant had submitted sufficient evidence, including invoices and a Chartered Accountant's certificate, to substantiate the claim of excess duty payment.
Key Evidence and Findings: The appellant provided detailed records of duty paid and payable, attested invoices, and a CA certificate, which were not adequately considered by the lower authorities.
Application of Law to Facts: The tribunal applied the principles of excise duty payment and refund, concluding that the appellant had indeed made an excess payment, warranting a refund.
Treatment of Competing Arguments: The tribunal noted the lower authorities' dismissal of the appellant's evidence as a failure to apply proper scrutiny and reasoning.
Conclusions: The tribunal concluded that the appellant is entitled to a refund, subject to verification of unjust enrichment.

Issue 2: Procedural Compliance and Evidence Submission

Relevant Legal Framework and Precedents: Rule 7(1) of the Central Excise Rules pertains to provisional assessments, which was a point of contention.
Court's Interpretation and Reasoning: The tribunal found that the appellant's submission of evidence was sufficient to establish the claim, and procedural lapses, if any, should not bar the refund.
Key Evidence and Findings: The appellant's submission of revised figures and invoices was deemed adequate to verify the excess payment.
Application of Law to Facts: The tribunal emphasized the importance of substantive evidence over procedural technicalities in determining duty liability.
Treatment of Competing Arguments: The tribunal criticized the lower authorities for not specifying what additional evidence was needed and for exceeding the scope of the show cause notice.
Conclusions: The tribunal found procedural compliance in the appellant's submissions and criticized the lower authorities' handling of the evidence.

Issue 3: Unjust Enrichment

Relevant Legal Framework and Precedents: The doctrine of unjust enrichment prevents refund claims if the incidence of duty has been passed on to another party.
Court's Interpretation and Reasoning: The tribunal noted the lack of evidence regarding unjust enrichment and remanded the issue for further verification.
Key Evidence and Findings: The tribunal found that the appellant had not provided sufficient evidence to overcome the bar of unjust enrichment.
Application of Law to Facts: The tribunal remanded the case to the adjudicating authority to verify the unjust enrichment aspect before sanctioning the refund.
Treatment of Competing Arguments: The tribunal acknowledged the lower authorities' concerns but emphasized the need for additional evidence from the appellant.
Conclusions: The tribunal remanded the case for further examination of unjust enrichment, directing the appellant to provide relevant evidence.

3. SIGNIFICANT HOLDINGS

Verbatim Quotes: "I hold that the documents submitted by the Appellant establish that there was an excess payment of duty by the Appellant during the months of November 2015 and December 2015 and the Appellant is eligible for the refund, subject to verification of 'unjust enrichment'."
Core Principles Established: The tribunal emphasized the importance of substantive evidence over procedural technicalities in determining duty liability and the need for thorough verification of unjust enrichment claims.
Final Determinations on Each Issue: The tribunal set aside the impugned order and remanded the case for limited verification of unjust enrichment, affirming the appellant's entitlement to a refund based on the evidence provided.

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