2015 (10) TMI 274 - AT - Central Excise

Denial of refund claim - Unjust enrichment - Payment of excess duty - Appellant applied price escalation from 01.01.2009 instead of 01.07.2009, therefore, the entire amount of ₹ 3,28,136/-paid in the supplementary invoices, was in excess - Held that - Authorities below had not recorded a categorical finding about the eligibility of refund and also applicability of unjust enrichment. Besides, I find that the documents now produced by the ld.Consultant for the Appellant, were not placed before the adjudicating authority so as to enable him to scrutinize whether burden of duty had been passed to the customer and also on the aspect of eligibility of refund claim by the Appellant. Both sides agree that all the documents/evidences need to be scrutinized along with other evidences that would be produced in support of the claim. - Impugned order set aside - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Refund claim rejection on grounds of improper application of price escalation and unjust enrichment.

Analysis:
The appeal was filed against the rejection of a refund claim by the Commissioner of Central Excise (Appeals) related to the payment of differential excise duty due to an incorrect application of price escalation. The Appellant, engaged in manufacturing motor vehicle parts, raised a supplementary bill for the excess amount paid in the differential duty, which was refundable. The customer had initially availed cenvat credit but later reversed it. The refund claim was rejected by the Assistant Commissioner and upheld by the Commissioner (Appeals) on the grounds of improper refund and unjust enrichment.

The Appellant argued that the customer did not pay the mentioned amount, including the refund claim, as evidenced by the reversal of cenvat credit by the customer. The Revenue contended that the evidence presented before the Tribunal was not verified by the lower authorities and that a mere letter from the buyer was insufficient to prove that the burden of duty was not passed on to the customer. Reference was made to a previous Tribunal judgment to support this argument.

In response, the Appellant referred to a Tribunal decision where a refund was allowed based on price escalation. The Tribunal noted that the lower authorities did not conclusively determine the eligibility of the refund claim and unjust enrichment. As the documents presented by the Appellant were not reviewed by the adjudicating authority, the case was remitted back for verification of all evidence to ascertain the eligibility of the refund claim and the passing of the duty burden to the customer. The matter was set aside for fresh consideration, granting the Appellant a reasonable opportunity to present their case and produce additional evidence.

Ultimately, the appeal was allowed by way of remand, keeping all issues open for further evidence presentation by both parties.