2015 (10) TMI 1340 - AT - Central Excise

Denial of refund claim - Unjust enrichment - Held that - Tribunal came to the conclusion that in such a case by issuing mere debit note does not pass the bar of unjust enrichment. The decision of the Rajasthan Processors (India) Pvt. Ltd. (1994 (1) TMI 275 - SUPREME COURT) have no relevance to the facts of this case, as in that case there was no reduction of duty in the finance bill and on the basis of that the supplier of goods filed refund claim and issued credit note to the buyers. But, fact was not ascertainable whether buyers have reversed the cenvat credit to duty paid by them or not. I have gone through the decision of Ispat Industries Ltd. (2014 (12) TMI 271 - CESTAT MUMBAI) wherein it has been ascertainable that excess duty has been reversed in the cenvat credit account by the buyer and same is the case here. Therefore, when the fact is ascertained, duty credit has not been availed by the buyer of the goods, in that situation the appellant has discharged their burden of unjust enrichment and same in this case, therefore, I hold that the appellant is entitled for refund claim with these terms impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Refund claim rejection based on unjust enrichment.

Analysis:
The appellant appealed against the rejection of their refund claim due to the failure to pass the bar of unjust enrichment. The appellant supplied printed sheets to their sister unit at a higher excise duty rate, later realizing the correct duty rate and issuing a credit note to reverse the excess duty. The refund claim was denied by lower authorities citing unjust enrichment. The consultant argued that the sister unit had indeed reversed the excess duty, passing the bar of unjust enrichment. The consultant relied on a specific case law to support this claim. On the contrary, the respondent contended that initially, the sister unit had taken the credit, indicating failure to pass the bar of unjust enrichment. The respondent also cited relevant case laws to support their argument.

The Tribunal considered the submissions from both parties. It was undisputed that the appellant paid excess duty, and the sister unit reversed the credit, following which a credit note was issued for the excess duty paid. The respondent relied on a case where the issue was the reversal of cenvat credit by the buyers, highlighting the importance of ascertaining whether the credit had been reversed. The Tribunal differentiated this case from the present one, emphasizing that in the current scenario, the excess duty had been reversed in the cenvat credit account by the buyer, similar to the case law cited by the consultant. As the appellant had demonstrated that the duty credit was not availed by the buyer, thereby discharging the burden of unjust enrichment, the Tribunal concluded in favor of the appellant. The impugned order was set aside, and the appeal was allowed with consequential relief.