2017 (7) TMI 237 - AT - Central Excise

Refund claim of the duty already paid during the disputed period - unjust enrichment - Held that - in the absence of evidence merely on the basis of credit notes, it cannot be established that incidence of duty paid by the appellants have not been passed on to any other person. In the interest of justice, one opportunity can be given to the appellants to substantiate their claims in respect of unjust enrichment by submitting all other documents, like, parties ledger, balance sheets, etc. to prove that of credit note has been rightly accounted for and the amount of credit notes has been paid to the customers or the credit notes adjusted in the customers ledger and the same is reflecting in the balance sheet - appeal allowed by way of remand.

Summary

Issues:
Dutiability of sub-station equipment support structures and transmissions towers under Chapter sub-heading 7308.90, rejection of refund claim based on unjust enrichment.

Analysis:
The case involved a dispute regarding the dutiability of sub-station equipment support structures and transmissions towers. The appellants paid duty during the disputed period, which was later dropped by the adjudicating authority in denovo proceedings. Subsequently, a refund claim was filed amounting to ?54,36,668, which was rejected by the adjudicating authority on the grounds of unjust enrichment and a revisit to the merit of the case. The Commissioner (Appeals) upheld the rejection based on unjust enrichment, without revisiting the merit. The main issue revolved around whether the refund claim was affected by unjust enrichment.

The appellant argued that unjust enrichment did not apply as they had issued credit notes to customers, indicating that the duty burden was borne by them and not passed on. They referred to a letter from MSEB requesting a refund of excise duty paid, supporting their claim. The Revenue, however, contended that the appellant failed to provide sufficient evidence besides credit notes to prove the duty was actually refunded to customers. They relied on specific decisions to support their stance.

The Tribunal carefully considered both arguments and found that the issue centered on unjust enrichment. The Commissioner's findings highlighted that while credit notes were issued, there was a lack of evidence showing the amount was credited to customers. Without further documentation, it could not be established that the duty burden was not passed on. The Tribunal emphasized the need for additional evidence such as ledger entries and balance sheets to substantiate the claim of unjust enrichment. Consequently, the appeal was allowed by remanding the case to the adjudicating authority for a fresh decision based on the observations made, with a directive to conclude the process within three months for timely resolution.