2015 (10) TMI 1541 - AT - Central Excise

Denial of refund claim - Unjust enrichment - appellant have booked excess duty paid under the head of expenditure in the profit and loss account - Held that - It is undisputed fact that amount for which refund is sought for is towards the excess payment of duty and was booked by the appellant as expenditure in the profit and loss account, it clearly shows that incidence of duty has been passed on to the person whom the appellant made sale during the relevant period. - If the revised balance sheet for the entire period are found correct and if the same has been audited or if the appellant produced evidence of acknowledgement of such revised balance sheet to the concerned Income Tax authority then refund claim of the appellant shall not be hit by unjust enrichment. Since revised balance sheet have not been produced either before the original authority or before the Ld. Commissioner (Appeals) the matter requires to be remanded to original adjudicating authority. - Matter remanded back - Decided in favour of assessee.

Summary

Issues involved:
Refund claim rejected on the ground of unjust enrichment due to excess duty paid and booked as expenditure, appellant's appeal rejected, revised balance sheet showing refund amount as receivable, original authority and Commissioner (Appeals) decisions challenged.

Analysis:

Issue 1: Refund claim rejection on the ground of unjust enrichment
The appeal was against the rejection of a refund claim by the Commissioner (Appeals) based on unjust enrichment. The appellant had paid excess duty, which was booked as expenditure in the profit and loss account but not shown as receivable in the balance sheet. The appellant argued that the duty was not passed on to the customer as the correct value was charged in subsequent transactions. The appellant presented a Chartered Accountant Certificate to support this claim. The Revenue contended that booking the amount as expenditure implied passing on the duty incidence. The Tribunal noted that the revised balance sheet now reflected the refund amount as receivable under 'Loans and Advances,' potentially negating the unjust enrichment argument.

Issue 2: Presentation of revised balance sheet
The appellant's counsel submitted revised balance sheets for multiple financial years, showing the refund amount as receivable. The Revenue objected, stating that the revised balance sheets were not presented before the lower authorities. The Tribunal emphasized the importance of verifying the correctness and genuineness of the revised balance sheets to determine if the refund claim should be granted without falling under unjust enrichment. Consequently, the matter was remanded to the original adjudicating authority for further examination.

Conclusion:
The Tribunal remanded the case for verification of the revised balance sheets to ascertain the legitimacy of the refund claim. If the revised balance sheets are found to be accurate and the refund amount is shown as receivable, the refund can be sanctioned. The original adjudicating authority was directed to complete the reassessment within three months, ensuring the appellant's right to a fair hearing and submission of necessary documents. The appeal was disposed of through remand for further evaluation based on the revised balance sheet evidence.