2017 (2) TMI 880 - AT - Central Excise

Refund claim - unjust enrichment - rejection on the ground that the credit note has been issued after clearance of the goods - Held that - it is not coming out whether the buyer M/s Swaraj Mazda Ltd. has availed the Cenvat Credit of excess duty paid by the appellant. In that circumstance, the matter needs examination at the end of the Adjudicating Authority to verify the fact whether on the excess duty paid by the M/s Swaraj Mazda Ltd. has not taken Cenvat Credit of the excess duty for which debit note has been issued to the appellant - appeal allowed by way of remand.

Summary

Issues:
Refund claim rejection on grounds of unjust enrichment.

Analysis:
The appellant, a job worker, cleared goods to the buyer paying excess duties, later rectified through debit notes. The refund claim was rejected due to the absence of credit notes post-clearance. The issue at hand is whether the appellant, upon receiving a debit note from the buyer, is entitled to a refund of excess duty paid. Reference to the case of CCE Vs. Addison & Co. Ltd. highlights a similar scenario where the Assessee, an EOU, refunded excess duty to buyers and successfully obtained a refund. The judgment emphasized that if the duty burden was borne by the Assessee, refund entitlement exists, regardless of credit note submission timing. The Tribunal noted the need to verify if the buyer availed Cenvat Credit on the excess duty paid by the appellant. Consequently, the matter was remanded to the Adjudicating Authority for further examination. The appellant was directed to provide relevant documents, including a Chartered Accountant's certification on the buyer's Cenvat Credit status. The Adjudicating Authority was instructed to issue an appropriate order post-verification and hearing.

This judgment underscores the importance of determining whether the duty burden was ultimately borne by the Assessee, impacting refund eligibility. The case law reference establishes precedent for refund entitlement post-excess duty rectification, irrespective of credit note submission timing. The Tribunal's decision to remand the matter for verifying the buyer's Cenvat Credit utilization reflects a meticulous approach to ensure accurate assessment before granting the refund. The directive for document submission and verification, along with the opportunity for a hearing, upholds procedural fairness and legal compliance in addressing refund claims based on unjust enrichment grounds.