2009 (7) TMI 657 - AT - Central Excise

Refund- Unjust enrichment- This appeal filed by the assessee is against the rejection of the refund claim for Rs.1,66,240/-. The Department, in a show cause notice proposed to reject the refund claim on merits, limitation and unjust enrichment. Held that- they have admitted that duty was paid on the excess transportation charges recovered from the buyers and that such payment of duty was made by way of debit in CENVAT account and that regular statutory invoices were issued to the buyers handing down the duty liability to them. This fact could only reinforce the department s case that the burden on the assessee to adduce evidence against the bar of unjust enrichment is yet to be discharged. I have not found any evidentiary material on record against the bar of unjust enrichment in this case.

Summary

Issues:
- Rejection of refund claim for excess transportation charges
- Time-barred claim for refund
- Inclusion of excess transportation charges in transaction value
- Burden of proof on unjust enrichment

Rejection of Refund Claim for Excess Transportation Charges:
The appeal was filed against the rejection of a refund claim for excess transportation charges amounting to Rs.1,66,240. The assessee had recovered transportation charges in excess of the actual amount spent and paid duty on such excess charges. The original authority rejected the claim as time-barred and inadmissible since the excess charges were included in the transaction value of goods under Section 4 of the Central Excise Act. The burden was on the assessee to prove that the duty incidence was not passed on to the buyers, but they failed to do so. The Commissioner (Appeals) upheld the rejection, leading to the present appeal.

Time-Barred Claim for Refund:
The original authority held that a part of the refund claim amounting to Rs.1,02,267 for a specific period was time-barred. The appellant contested this decision, claiming that evidence existed to show that the duty burden was not transferred to the buyers. However, the lower authorities rejected this argument, emphasizing that the excess transportation charges formed part of the transaction value of goods and, therefore, the duty paid on them was not refundable.

Inclusion of Excess Transportation Charges in Transaction Value:
The Tribunal considered whether the appellant was entitled to a cash refund of duty amounting to Rs.63,975, which was within the time limit for filing the claim. Both lower authorities had rejected this claim on the grounds of unjust enrichment and on merits, stating that the excess transportation charges were part of the transaction value of goods under Section 4 of the Act. The Tribunal highlighted a Supreme Court judgment that excise duty could not be levied on transportation profit, but noted that the concept of 'transaction value' had replaced the old concept of 'deemed price.' The burden was on the assessee to demonstrate that the excess charges were not part of the transaction value and that the duty burden was not passed on to the buyers, which they failed to do.

Burden of Proof on Unjust Enrichment:
The Tribunal emphasized that the burden of proof against unjust enrichment rested with the assessee. Despite the appellant admitting to paying duty on excess transportation charges and passing on the duty liability to buyers through invoices, they failed to provide evidence to counter the unjust enrichment claim. The Tribunal found no evidentiary material on record to support the appellant's case against unjust enrichment, ultimately leading to the rejection of the refund claim in its entirety.