2018 (10) TMI 24 - HC - Central Excise

Refund claim - unjust enrichment - Tribunal not considered the Appellants submissions with regard to the CA certificate in support of its claim - principles of Natural Justice. Held that - The impugned order does not deal with the Appellant s contention that the burden stands discharged by virtue of the Chartered Accountant s certificate. The impugned order of the Tribunal merely relied upon decisions of its coordinate benches to conclude that the Appellant has not discharged its burden of establishing that duty has not been passed on by the Appellant s to its customers. In none of the cases relied upon by the impugned order of the Tribunal was the claim to establish absence of unjust enrichment supported by a Chartered Accountant s certificate as in this case. The substantial question of law as formulated is answered in the negative i.e. in favour of the Appellant and against the Respondent Revenue - appeal allowed.

Summary

Issues:
Challenge to order denying refund on grounds of unjust enrichment without considering CA certificate.

Analysis:
The appeal under Section 35 G of the Central Excise Act, 1944 challenged an order passed by the Tribunal dismissing the appeal and upholding the denial of refund on the ground of unjust enrichment. The main contention raised by the Appellant was whether the Tribunal was justified in rejecting the claim of refund without considering the CA certificate supporting the claim. The appeal was admitted based on this substantial question of law.

The Appellant argued that the impugned order failed to address the submission and reliance on the Chartered Accountant certificate to establish that the burden of duty had not been passed on to customers. The Appellant emphasized that passing credit notes alone did not discharge the burden of proof regarding unjust enrichment. Reference was made to a Supreme Court decision where it was noted that if a Chartered Accountant's certificate is produced and accepted by the Tribunal, the burden of not passing on the duty is considered discharged.

The High Court observed that the impugned order did not address the Appellant's contention regarding the Chartered Accountant's certificate. The Tribunal had relied on decisions of its coordinate benches to conclude that the Appellant had not established that duty had not been passed on to customers. However, the Court noted that none of the cases relied upon by the Tribunal had the support of a Chartered Accountant's certificate to establish the absence of unjust enrichment, as in the present case.

Consequently, the substantial question of law was answered in favor of the Appellant and against the Revenue. The impugned order was set aside, and the appeal was restored to the Tribunal for fresh disposal in accordance with the law. The appeal was allowed in favor of the Appellant based on the failure to consider the evidence provided through the Chartered Accountant's certificate.