2016 (7) TMI 894 - AT - Central Excise

Claim of refund - duty was paid under protest or not - unjust enrichment - amount was not recovered from the customers - Held that - in view of the Chartered Accountant Certificate payment of duty under protest reflection of excess duty as receivable in the balance sheet and the certificates of the buyers are conclusive factors to examine the scope of the unjust enrichment and the Revenue having not rebutted the said evidence - Refund allowed - Decided against the revenue.

Summary

Issues:
Classification of products under Chapter Heading 60.01 or Heading 6307.90, refund of excise duty, unjust enrichment principle.

Analysis:
The case involved a dispute regarding the classification of Towels and Napkins by the Revenue, initially under Chapter Heading 60.01 and later changed to Heading 6307.90. The appellant continued to supply products at the same rate despite the higher duty. The Commissioner (Appeals) set aside the original classification, which was challenged by the Revenue before the Tribunal. The Tribunal upheld the assessee's stand, leading to a refund claim of excise duty paid during a specific period.

The refund claim was initially rejected due to the unjust enrichment principle as the duty was not reflected separately in invoices, implying the recovery from customers. However, the Commissioner (Appeals) sanctioned the refund after examining declarations from buyers, a Chartered Accountant Certificate, and the balance sheet showing recoverable amounts from the Revenue Department. The Revenue challenged this decision before the Tribunal.

The Tribunal considered various legal precedents, including the Hon'ble Supreme Court and High Court decisions, regarding unjust enrichment. It emphasized the importance of evidence such as declarations from customers, Chartered Accountant Certificates, and balance sheet entries to determine non-recovery of duty from customers. Referring to specific court cases, the Tribunal highlighted the significance of payment under protest, balance sheet entries, and certificates from professionals in establishing non-recovery of duty.

Ultimately, the Tribunal rejected the Revenue's appeal, citing the conclusive factors presented by the Commissioner (Appeals) as evidence of non-recovery of duty from customers. The decision was based on the Chartered Accountant Certificate, payment under protest, and balance sheet entries, which remained unrebutted by the Revenue. The Tribunal found no infirmity in the Commissioner (Appeals)' views and upheld the sanctioning of the refund claim to the respondent.