2016 (5) TMI 1044 - AT - Central Excise

Refund claim - excess duty paid as regards to abatement - refund claim sanctioned but credited to consumer welfare fund under the provisions of 11B(2) of Central Excise Act, 1944 - No evidence produced regarding unjust enrichment - Held that - it is found that appellant had submitted detailed reply along with various documents and explanation of documents. In the Order-In-Original, the adjudicating authority credited the sanctioned refund amount to the consumer welfare fund only on the basis of judgments in cases of Beckon Electronics Pvt. Ltd Vs Commissioner of Central Excise, Rajkot 2004 (2) TMI 431 - CESTAT, MUMBAI and CCE Mumbai Vs Allied Photographics India Ltd 2003 (11) TMI 91 - SUPREME COURT OF INDIA whereas the Adjudicating authority did not whisper anything about the documents submitted by the appellant. This clearly shows that no verification in respect of unjust enrichment was carried out by the Adjudicating authority.Therefore, the impugned order is set aside and appeal is allowed by way of remand to the Adjudicating authority. The appellant shall produce all the documents necessary to verify that incidence of refund amount has not been passed on to any other person. - Appeal disposed of by way of remand

Summary

Issues:

1. Appeal against Order-in-Appeal upholding Order-in-Original rejecting refund claim due to excess duty payment.
2. Appellant's submission of necessary documents and mistake in abatement percentage.
3. Adjudicating authority's decision to credit refund to consumer welfare fund based on unjust enrichment.
4. Arguments regarding unjust enrichment from both sides.
5. Lack of verification by Adjudicating authority on unjust enrichment.
6. Decision to set aside impugned order and remand the case for further verification.

Analysis:

The appeal was filed against the Order-in-Appeal upholding the rejection of a refund claim due to excess duty payment by the appellant. The appellant had cleared excisable goods on MRP based value under Section 4A but mistakenly reduced abatement at 38% instead of 40%, resulting in an overpayment of duty. The Adjudicating authority sanctioned the refund claim but credited it to the consumer welfare fund citing lack of evidence on unjust enrichment, referring to previous judgments like Beckon Electronics Pvt. Ltd. and Allied Photographics India Ltd. The Commissioner(Appeals) upheld this decision, prompting the appellant to appeal further.

The appellant, through their counsel, argued that all necessary documents were submitted to the Original authority, emphasizing the mistake in abatement percentage and asserting that the excess duty payment did not affect the MRP. They cited relevant judgments like Kinetic Engg. Ltd and Commissioner of C. Ex. Pondicherry Vs. Whirlpool of India Ltd to support their case. On the other hand, the Revenue representative reiterated the findings of the impugned order, emphasizing the applicability of unjust enrichment even in MRP-based sales and referring to judgments like Shree Baidyanath Ayurved Bhavan Ltd and Inn-Venue Hospitality Management P. Ltd.

After considering the submissions from both sides, the Tribunal found that the Adjudicating authority had not conducted a proper verification regarding unjust enrichment despite the appellant submitting detailed replies and documents. Therefore, the Tribunal set aside the impugned order and remanded the case back to the Adjudicating authority for a denovo adjudication. The Adjudicating authority was directed to verify that the refund amount incidence had not been passed on to any other person, provide a personal hearing to the appellant, and dispose of the matter within three months from the date of the Tribunal's order. The appeal was disposed of by way of remand for further verification and adjudication.