2016 (6) TMI 763 - AT - Central Excise

Refund claim - Bar of unjust enrichment - Held that - It is correct that the purchase order / agreement has a price variation clause. It is also seen that the prices are finalized much later after clearance of the transformers. It is submitted that appellants are receiving payments from DISCOMS not invoice-wise but as bulk amounts through cheques and RTGS. In case of negative price variation payments the DISCOM (distribution company) only issue negative price variation approval letters. This was produced before the original authority. Further DISCOM is a public sector undertaking. However, the appellant has now produced a Chartered Accountant certificate. The authorities below did not get opportunity to examine the same. So in my opinion it is a fit case to be remanded to re-examine whether the refund is hit by the bar of unjust enrichment. The appellant is directed to produce Chartered Accountant certificate before the original authority. In view thereof remand the matter to the original authority to re-examine the refund claim after giving reasonable opportunity for personal hearing. The appellant is at liberty to adduce any further evidence to establish their case. The impugned order is set aside and appeal is allowed by way of remand.

Summary

Issues:
Refund claim rejection based on duty incidence passed on and lack of documentary evidence.

Analysis:
The appellants, manufacturers of Electrical Transformers, had a price variation clause in their agreement with Central Power Distribution Company, resulting in excess duty payment of Rs. 1,63,757. The refund claim was rejected by the original authority and Commissioner(Appeals) citing lack of evidence that duty incidence was not passed on. The appellant submitted various documents along with the refund claim, including a Chartered Accountant certificate later, asserting that they received less amount post price finalization. The Revenue argued that the certificate was not produced earlier and needs verification.

Upon hearing both sides, it was noted that prices were finalized after transformer clearance, and payments were received in bulk from DISCOMS. The appellant produced a Chartered Accountant certificate, which was not examined by the lower authorities. Considering this, the case was remanded for re-examination on unjust enrichment. The appellant was directed to present the certificate before the original authority for further review. The matter was sent back for a fresh assessment, allowing the appellant to provide additional evidence. The impugned order was set aside, and the appeal was allowed by way of remand.