1997 (1) TMI 205 - AT - Central Excise

Summary

Issues: Refund claim rejection based on unjust enrichment; Calculation of duty based on assessable value; Authenticity of customer certificate; Application of doctrine of unjust enrichment.

In the present case, the appellant, a manufacturer of polyester film, filed a refund claim after realizing a mistake in calculating duty based on the cum-duty price instead of the assessable value. The Asstt. Collector rejected the refund claim citing unjust enrichment, as duty was collected assuming a higher assessable value. The Collector (Appeals) remanded the case to verify the genuineness of a certificate from the customer confirming non-reimbursement of excess duty. However, the Asstt. Collector diverged from the directions and demanded a Chartered Accountant Certificate instead. The ld. Commissioner (Appeals) upheld this decision, leading to the appeal before the Tribunal.

The appellant argued that the duty calculation error did not affect the assessable value, citing a Supreme Court case precedent. They contended that no unjust enrichment occurred as the excess duty was not passed on to the customer, supported by the customer's certificate. The appellant sought the rightful refund of mistakenly paid duty.

On the other hand, the respondent contended that since duty was calculated and presumably collected at a higher rate, refunding it would lead to unjust enrichment. The respondent reiterated the lower authorities' findings.

After considering both sides, the Tribunal found that the appellant's mistake in duty calculation was genuine, supported by the customer's certificate confirming non-payment of excess duty. The Tribunal noted that the Collector (Appeals) had directed verification of this certificate, which remained unchallenged. Consequently, the Tribunal held that the refund was due to the appellants, as there was no unjust enrichment in this scenario. The appeal was allowed, with the appellants entitled to consequential relief as per the law.