2018 (2) TMI 782 - AT - Central Excise

Refund claim of the excess duty paid - denial on the ground of unjust enrichment - Held that - the duty paid by the appellant has not been borne by the user of the vehicle - the appellant has been able to pass bar of unjust enrichment therefore the appellant is entitled to claim refund of duty paid by them - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on unjust enrichment.

Analysis:
The appellant appealed against the rejection of their refund claim for excess duty paid, contending that they had passed the duty incidence to the ultimate customers. The appellant, a manufacturer of specialized motor vehicles, sold vehicles through dealers at a higher price due to outdated computerized systems. The lower authorities rejected the refund claim, stating that although the appellant issued credit notes to pass on the benefit of central excise duty, it was unclear if the duty incidence was passed on to the ultimate customers. The appellant argued that as the vehicles were meant for consumers and dealers did not pay the duty component, the demand was not hit by unjust enrichment, citing a relevant decision. The learned Advocate and A.R. presented opposing views.

Considering the submissions, the Tribunal examined a letter from one of the appellant's dealers, Volkswagen Group Sales India Private Limited, stating that they did not pay the excess excise duty charged by the manufacturer and did not pass it on to their dealers or customers. The dealer's certificate confirmed that the excess amount due to the specialized nature of the vehicles was not paid by them and was not charged to the actual users of the vehicles. Based on these facts, the Tribunal concluded that the duty paid by the appellant was not borne by the end-users, thereby allowing the appellant's appeal and granting them the refund of the duty paid.

In conclusion, the Tribunal set aside the impugned order, ruling in favor of the appellant based on the evidence provided by the dealer, which established that the excess duty was not passed on to the customers. This decision was made after a thorough analysis of the facts and circumstances of the case, ultimately allowing the appellant's claim for a refund of the excess duty paid.