2015 (12) TMI 863 - AT - Central Excise

Denial of refund claim - Unjust enrichment - Held that - On perusal of books of accounts of 2007-08 and CA certificate, it is clear that amount of refund is accounted for under head of loans and advances in the asset sides of the balance sheet. In my view if this treatment is given to the refund amount in the books of account, it is sufficient ground for establishing that the incidence of such duty has not been passed on. However this treatment of the amount reflecting in the year when the duty was paid but it should continue till the sanction of the refund claim. It is apparent from the order that despite undertaking by the advocate during the hearing the appellant has failed to produce the balance sheet for the year 2008-09 to the adjudicating authority. Therefore treatment of this amount in the books of account could not be known or ascertained by the adjudicating authority in absence of said documents. In view of the above facts, I am of the view that the matter needs to be remanded to the adjudicating authority - Decided in favour of assessee.

Summary

Issues Involved:
Unjust enrichment in central excise duty refund claim.

Analysis:
The appeal was against the Order-in-Appeal dated 9/2/2010, where the refund claim for central excise duty was rejected due to unjust enrichment. The appellant filed the claim on 29/8/2008 for duty wrongly paid in relation to clearance to SEZ under a letter of undertaking. The Commissioner (Appeals) remanded the matter to the adjudicating authority, who again rejected the claim on the grounds of unjust enrichment. The appellant contended that the duty incidence was not passed on, supported by documents like balance sheet, statement of accounts, and CA certificate. However, the adjudicating authority demanded the balance sheet for 2008-09, which was not submitted, leading to the rejection of the claim.

The main issue revolved around establishing unjust enrichment for the refund claim. The appellant's argument was based on the treatment of the refund amount in the books of accounts, showing it under loans and advances, indicating that the duty incidence was not transferred. However, the absence of the balance sheet for 2008-09 hindered the verification of the accounting treatment of the refund amount. The Tribunal noted that the appellant failed to produce crucial documents despite an undertaking during the hearing, leading to a lack of clarity on the treatment of the amount in the books of account.

The Tribunal concluded that the matter needed to be remanded to the adjudicating authority for reconsideration solely on the unjust enrichment aspect. The appellant was directed to submit the balance sheet and CA certificate for the date of refund claim sanction within a month, ensuring a fair opportunity for a personal hearing. The adjudicating authority was instructed to review the refund claim within a further month. The appeal was disposed of with these directions, emphasizing the importance of submitting all necessary documents for a proper assessment of unjust enrichment in the refund claim.