2015 (6) TMI 537 - AT - Central Excise

Denial of refund claim - appellants had paid full duty on the motor spirit obtained by them for blending with ethanol - concessional rate of duty under Notification No. 28/2002-CE dated 13.05.2002 - appellants had not followed the procedure prescribed under the Rules - Unjust enrichment - appellant had not shown the duty liability separately in their invoices - Held that - Commissioner (Appeals) has relied on the fact that the Commissioner (Appeals) in the first round of litigation had already taken a view that the assessee is free to apply for registration and departmental officer will examine merits and grant refund if they are otherwise eligible for refund. He has interpreted this to mean that the procedure relating to registration was held to be unnecessary in this case having regard to the facts and circumstances. The unjust enrichment issue also was considered by the Commissioner and he held that when there is no change in the price, it cannot be said that assessee has benefited unjustly. - assessee had already applied for the registration which was granted on 14.02.2003 that is within less than a month of the receipt of the first consignment. Therefore both on procedural aspect as well as on unjust enrichment aspect, the appeal filed by the Revenue cannot be considered in their favour. - Decision in the case of assessee s own previous case followed 2010 (10) TMI 399 - CESTAT, AHMEDABAD - Decided against Revenue.

Summary

Issues:
- Eligibility for refund of duty paid on motor spirit obtained for blending with ethanol under concessional rate of duty.
- Non-compliance with procedure under Central Excise Rules.
- Unjust enrichment claim by the Revenue.
- Grant of registration certificate and subsequent refund claim.

Analysis:
1. Eligibility for Refund: The appeal concerns the eligibility of the respondent-assessee for a refund of duty paid on motor spirit obtained for blending with ethanol under a concessional rate of duty. The Commissioner initially allowed the refund claim, leading to the Revenue's appeal.

2. Non-Compliance with Procedure: The original authority rejected the refund claim citing non-compliance with the procedure prescribed under the Central Excise (Removal of Goods at Concessional Rate of Duty for manufacture of Excisable Goods) Rules, 2001. The Revenue contended that the appellants failed to follow the required procedure, thereby challenging the admissibility of the refund claim.

3. Unjust Enrichment Claim: The Revenue raised an objection of unjust enrichment, arguing that the appellants had not shown a separate duty liability in their invoices. The average benefit due to Ethanol clearance was highlighted, indicating a potential unjust enrichment issue.

4. Grant of Registration Certificate: The respondent filed cross-objections, explaining their efforts to obtain a registration certificate for blending motor spirit with ethanol. The registration was eventually obtained after receiving the motor spirit, and the refund claim was subsequently made.

5. Decision and Rationale: The Tribunal analyzed the submissions and upheld the Commissioner's decision to allow the refund. It was noted that the Commissioner had previously ruled that the registration procedure was unnecessary in this case, based on the circumstances. The Tribunal also found that the unjust enrichment claim was not valid, citing a previous decision in a similar case. The Tribunal concluded that the Revenue's appeal lacked merit, as the assessee had applied for registration promptly after receiving the motor spirit, meeting the procedural requirements.

In conclusion, the Tribunal rejected the Revenue's appeal and granted consequential relief to the assessee, emphasizing the compliance with procedural aspects and dismissing the unjust enrichment claim.