2015 (10) TMI 1956 - AT - Central Excise

Provisional clearances - Unjust enrichment - whether with the settlement of the prices on the lower side, subsequent to clearance of the goods, in terms of the provisional assessments, will the bar of unjust enrichment will apply or not - Held that - provisions of unjust enrichment will not apply when the goods stand cleared on payment of duty at the higher assessable value, which is subsequently finalized at lower rate in terms of the provisional clearances. The Commissioner (Appeals) has given a finding of fact that the appellant had issued credit notes to their buyers, M/s. Coal India Ltd., who have adjusted the differences from the outstanding payments of the assessee. If that be so, it cannot be said that the respondent have recovered the excess duty amount from their customers so as to be hit by the bar of unjust enrichment. Accordingly, we find no infirmity in the impugned order of the Commissioner (Appeals). - Decided against Revenue.

Summary

Issues:
1. Application of unjust enrichment in case of settlement of prices post goods clearance.

Analysis:
The central issue in this appeal revolves around the application of the principle of unjust enrichment in a scenario where prices are settled at a lower value after the clearance of goods based on provisional assessments. The Tribunal referred to several previous decisions to analyze this issue, including Union of India v. A.K. Spintex Ltd., Special Blasts Ltd. v. CCE, CCE, Nagpur v. Solar Capitals Ltd., and others. The consistent ratio from these judgments is that unjust enrichment does not apply if goods were cleared at a higher assessable value initially, which was later finalized at a lower rate post-clearance based on provisional assessments.

The Commissioner (Appeals) in the present case found as a matter of fact that the appellant had issued credit notes to their buyers, M/s. Coal India Ltd., who then adjusted the differences from the outstanding payments. This action indicates that the excess duty amount was not recovered from the customers, thereby not falling under the purview of unjust enrichment. Consequently, the Tribunal found no fault in the decision of the Commissioner (Appeals) and rejected the Revenue's appeal.

In conclusion, the Tribunal upheld the principle that unjust enrichment does not apply when goods were cleared at a higher value initially, subsequently adjusted to a lower rate post-clearance based on provisional assessments, and where the excess duty amount was not recovered from the customers. The decision of the Commissioner (Appeals) was deemed appropriate in this context, leading to the rejection of the Revenue's appeal.