2017 (4) TMI 1167 - HC - Central Excise

Refund claim - unjust enrichment - section 11A - Held that - Section 11A of the Act shall not be applicable as it was not the case of recovery of duty on erroneous refund - The matter was remanded to the adjudicating authority by giving one additional opportunity to the appellant assessee to produce the requisite certificate from the Government and the appellant assessee failed to produce the certificate from the Government and failed to satisfy the adjudicating authority that there was no unjust enrichment and the duty paid was not passed on to the purchasers, and therefore, it cannot be said that all the authorities below have committed any error - appeal dismissed - decided against appellant.

Issues Involved:
1. Justification of rejection of refund without notice under Section 11A of the Central Excise Act, 1944.
2. Consideration of the Chartered Accountant certificate regarding the incidence of duty.
3. Ignoring evidences produced before the tribunal.
4. Summary rejection of rectification of mistake when error apparent on record was pointed out.

Issue-wise Detailed Analysis:

1. Justification of Rejection of Refund Without Notice Under Section 11A:
The appellant contended that the recovery of refund without issuing a notice under Section 11A of the Central Excise Act, 1944, was without jurisdiction and authority under law. The court analyzed whether Section 11A was applicable and concluded that it was not applicable in this case. The recovery of the refund arose due to the appellate authority's order, not because of an erroneous refund. The refund claims were initially allowed by the adjudicating authority and subsequently set aside by the tribunal, necessitating the recovery of the refunded amount. Therefore, the court held that Section 11A did not apply, as the recovery was not based on an erroneous refund but on the appellate authority's decision.

2. Consideration of the Chartered Accountant Certificate:
The appellant argued that the tribunal erred in not considering the Chartered Accountant certificate, which certified that no incidence of duty was passed on to the customers. The court noted that the adjudicating authority and the first appellate authority did not find the certificate sufficient. The tribunal had remanded the matter to the adjudicating authority, giving the appellant an opportunity to produce a certificate from the government. However, the appellant failed to produce such a certificate, and the adjudicating authority concluded that the appellant did not satisfy the requirement of unjust enrichment. The court upheld this decision, stating that the authorities did not err in their judgment.

3. Ignoring Evidences Produced Before the Tribunal:
The appellant claimed that the tribunal ignored the evidence produced before it, especially when an error apparent on record was pointed out. The court found that the tribunal had considered the evidence but found it insufficient. The tribunal's decision to reject the appeal was based on the appellant's failure to produce the requisite certificate from the government, which was necessary to prove that the duty incidence was not passed on to the customers.

4. Summary Rejection of Rectification of Mistake:
The appellant contended that the tribunal summarily rejected the rectification application without addressing the error apparent on record. The court examined whether the tribunal erred in rejecting the rectification application. It was noted that the tribunal had considered the submissions regarding the notice under Section 11A but found them irrelevant. The court agreed with the tribunal's decision, stating that the issue of notice under Section 11A was not applicable in this case. Therefore, the tribunal did not commit an error in rejecting the rectification application.

Conclusion:
The court dismissed the appeal, concluding that the tribunal and the authorities below did not err in their decisions. The rejection of the refund without issuing a notice under Section 11A was justified, as the recovery was based on the appellate authority's order. The Chartered Accountant certificate was rightly not considered sufficient, and the appellant failed to produce the required government certificate. The tribunal did not ignore the evidence, and the rectification application was correctly rejected.

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