2014 (3) TMI 197 - AT - Central Excise

Denial of refund claim - Unjust enrichment - Infirmity in the Cost Certificate - Held that - appellant have arrived at the cost of production of said goods at Rs. 17,101.17 PMT in the said CAS-4 certificate and arrived at the assessable value amounting to Rs. 18,811.29 PMT for the purpose of payment of duty. It is available on the record that in an another matter the appellant have paid an additional amount of duty Rs. 11,58,160.00 alongwith interest amounting to Rs. 2,91,000.00 on the basis of same CAS-4 Cost Certificate in respect of those invoices in which duty was paid at prices below 18,811.29. The payment of this additional amount of duty on the basis of the same CAS-4 Cost Certificate has been accepted by the department as no contrary fact is available on the record. In this regard, I feel that adjudicating authority can t take two stands on a single cost certificate because the law does not permit such discrimination i.e. acceptance of a certificate for the purpose of recovery and rejection of the same certificate for the purpose of refund - said structural items have been used within the factory for erection of sheds etc. i.e. like capital goods - Following decision of Grasim Industries Vs. CCE 2003 (6) TMI 92 - CESTAT, CHENNAI - Decided against Revenue.

Summary

Issues involved:
1. Interpretation of Valuation Rules for excisable goods issued for captive use.
2. Application of the doctrine of unjust enrichment in the case of goods used captively.

Analysis:

Issue 1: Interpretation of Valuation Rules for excisable goods issued for captive use

The case involved the appellant, engaged in the manufacture of iron and steel products, who cleared structural materials for captive use within their factory. The appellant claimed a refund of excess duty paid, stating that duty should be levied at 110% of the cost of goods as per Rule 8 of the Valuation Rules. The original adjudicating authority rejected the claim citing issues with the Cost Certificate and unjust enrichment. The Commissioner (Appeals) held that Rule 8 of the Valuation Rules applied, requiring duty payment at 110% of the cost of production. The Commissioner noted discrepancies but acknowledged the consistent use of the same CAS-4 Cost Certificate for duty payment. The Tribunal agreed with the Commissioner, emphasizing the need for uniformity in adopting the cost for both payment and refund purposes.

Issue 2: Application of the doctrine of unjust enrichment

The Commissioner (Appeals) addressed the unjust enrichment aspect, referencing a previous CEGAT decision regarding capital goods used for captive consumption. The decision highlighted that items used like capital goods, such as in the case of constructing sheds, are not subject to unjust enrichment. Applying this rationale, the Commissioner concluded that the doctrine of unjust enrichment did not apply in the appellant's case. The Tribunal upheld this finding, stating that as the goods were used captively for construction purposes, the provisions of unjust enrichment were not applicable. Consequently, the Tribunal found no errors in the Commissioner's order and dismissed the Revenue's appeal.

In conclusion, the Tribunal affirmed the Commissioner (Appeals)'s decision, emphasizing the consistent application of the Valuation Rules and the inapplicability of unjust enrichment in the case of goods used captively for construction activities. The judgment provides clarity on the interpretation of valuation rules and the doctrine of unjust enrichment in similar scenarios.