2015 (4) TMI 993 - AT - Central Excise

Denial of refund claim - Unjust enrichment - Commissioner (A) held that as appellant has failed to produce any tangible evidence that they have passed the bar of unjust enrichment - Held that - On perusal of the calculation sheet provided by the appellant and the invoices we find that while granting discount to their customers, the appellant included the prices reduction plus duty component and same has been ignored by the lower authorities while examining their refund claim. In these circumstances, we hold that it is the fact in record which is evident that the appellant has been able to prove that they have not recovered excess duty from their customers. Therefore, we hold that appellant has discharged the burden of unjust enrichment and consequently, is entitled for refund claim. - Decided in favour of assessee.

Summary

Issues:
- Appeal against rejection of refund claim
- Unjust enrichment

Analysis:
1. Appeal against rejection of refund claim:
The appellant, a manufacturer of Color Roll Films, filed a refund claim for excess duty paid after reducing prices due to a market recession. The authorities rejected the claim citing failure to pass the bar of unjust enrichment. The Commissioner (A) initially sanctioned the refund claim, but it was challenged by the revenue before the Tribunal. After remand, the Commissioner (A) rejected the claim again for lack of tangible evidence. The appellant contended that they provided discounts to customers, including price reduction and duty, as evident from invoices. They argued that they did not receive excess duty from buyers and paid it from their own account, thus discharging the burden of unjust enrichment.

2. Unjust enrichment:
The appellant's advocate presented invoices and a calculation sheet showing that the discounts to customers included price reduction and duty components. The Tribunal observed that the lower authorities had overlooked this crucial aspect while assessing the refund claim. By analyzing the provided documents, it was evident that the appellant had not recovered excess duty from customers. Consequently, the Tribunal held that the appellant had successfully proven that they did not pass on the excess duty to customers, thereby discharging the burden of unjust enrichment. As a result, the impugned order was set aside, and the appeal was allowed with consequential relief.

This judgment highlights the importance of demonstrating unjust enrichment in refund claims and the significance of providing clear evidence to support such claims. The detailed analysis of invoices and calculation sheets played a crucial role in establishing that the appellant had not passed on the excess duty to customers, ultimately leading to the Tribunal allowing the appeal and granting the refund claim.