2017 (3) TMI 850 - AT - Central Excise

Refund claim - unjust enrichment - Revenue contends that the Divisional Asstt. Commissioner had not sent the verification report which was required to be taken into consideration while deciding the issue of unjust enrichment - Held that - As the Respondent has able to prove that the higher duty paid by them at the time of provisional assessment recovered from the buyers wherein all the amount shown in the balance amount recoverable from the department - the respondent has complied with the condition of CBEC Circular 23.06.2004 and after examining all these issues the Ld. Commissioner (A) has sanctioned the refund claim same is in accordance with law - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Refund claim based on excess duty payment during finalization of provisional assessment.
2. Application of unjust enrichment principle.
3. Discrepancy in verification report submission.
4. Appeal against the sanctioning of refund claim by the Ld. Commissioner (A).

Analysis:

Issue 1: Refund claim based on excess duty payment during finalization of provisional assessment
The respondent, engaged in manufacturing pressure cookers, filed a refund claim for overpaid duty during the period of final assessment after provisional assessment was completed. The refund claim was initially sanctioned, but later questioned due to the application of the unjust enrichment principle. The Revenue issued a show cause notice to reject the claim, leading to an appeal by the respondent against the rejection.

Issue 2: Application of unjust enrichment principle
The Revenue contended that the refund claim should not have been sanctioned as the respondent failed to prove the absence of unjust enrichment, citing a CBEC Circular. However, the Ld. Commissioner (A) upheld the refund claim based on evidence provided by the respondent, including invoices showing higher discounts given and a certificate confirming no recovery of additional duty from dealers.

Issue 3: Discrepancy in verification report submission
The Revenue raised concerns about the absence of a verification report from the Divisional Asstt. Commissioner, which was deemed necessary to consider the issue of unjust enrichment. Despite the lack of this report, the Ld. Commissioner (A) found in favor of the respondent based on the evidence presented, indicating no recovery of extra duty from buyers.

Issue 4: Appeal against the sanctioning of refund claim by the Ld. Commissioner (A)
The Revenue appealed against the decision of the Ld. Commissioner (A) to sanction the refund claim, arguing that the respondent had not met the requirements of proving no unjust enrichment. However, the appellate tribunal found that the respondent had sufficiently demonstrated compliance with the CBEC Circular and upheld the decision to sanction the refund claim.

In conclusion, the appellate tribunal dismissed the Revenue's appeal, affirming the sanctioning of the refund claim by the Ld. Commissioner (A) based on the evidence provided by the respondent regarding the absence of unjust enrichment and compliance with relevant regulations.