2017 (2) TMI 373 - AT - Central Excise

Refund claim - unjust enrichment - denial on the ground that the appellant could not produce documentary evidence to show that the incidence of differential duty paid in excess by the appellant has not been passed on to the customer - Held that - the excise duty paid by the appellant over and above the 18% that at the rate of 30% was not paid by the customer i.e. CPWD to the appellant - some of the documents were submitted along with their reply to the adjudicating authority. With these evidence there is no doubt that the incidence of duty was not passed on by the appellant to the customer or to any other person - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Refund rejection on the ground of unjust enrichment due to lack of documentary evidence.

Analysis:
The issue in this case revolves around the rejection of the appellant's refund claim based on unjust enrichment, as the appellant failed to provide documentary evidence showing that the excess duty paid had not been passed on to the customer. The Commissioner (Appeals) denied the refund claim citing this reason. The appellant, represented by Shri Karl Shroff and Shri Kunal Kirpalani, argued that they had supplied goods to the CPWD and had submitted various documents to support their claim, including letters, contract documents, certificates, and invoices. They clarified in their reply to the Assistant Commissioner that the differential duty amount was not recovered from CPWD. The appellant contended that they had provided more than enough documentary evidence to prove that the duty incidence was not passed on.

The Assistant Commissioner (A.R.), Shri H.M. Dixit, supported the findings of the impugned order, reiterating the stance taken against the refund claim. However, upon careful consideration of the submissions from both sides, the Member (Judicial), Ramesh Nair, found in favor of the appellant. It was observed that the appellant had paid excise duty at a higher rate of 30% but was reimbursed by CPWD at 18%, as per the contract document. The documents submitted by the appellant, including correspondence with CPWD, clearly demonstrated that the excess duty amount was not recovered from the customer. The Member noted that the evidence presented conclusively proved that the duty incidence had not been passed on to any party. Consequently, the refund was deemed justified, and the impugned order was set aside, allowing the appeal in favor of the appellant.

In conclusion, the judgment highlights the importance of providing substantial documentary evidence to support refund claims and demonstrates how a thorough presentation of documents can overturn a decision based on unjust enrichment allegations. The case underscores the significance of maintaining a clear paper trail to substantiate claims and establish the non-passing on of duty incidences to secure favorable outcomes in such legal disputes.