2019 (3) TMI 1091 - AT - Central Excise

Revised refund claim - refund claimed on the ground that the value adopted at the time of removal from the factory gate was higher than the value prevailing at or about the same time at the depot for the same goods - main ground on which the Commissioner (Appeals) has disallowed the refund claim is that the appellant has not followed Rule 7 of the Central Excise Valuation Rules, 2000 - scope of remand - Held that - It can be seen that the adjudicating authority had gone into the question as to whether the appellant had adopted a higher value at the factory gate than the value of goods cleared at the Kit Stores. After perusing the invoices, the said issue was found to be in favour of the appellant. The issue of unjust enrichment was also examined by the adjudicating authority. Thus, after complying with the remand direction, the adjudicating authority has sanctioned the refund of ₹ 13,23,279/-. Hence, the conclusion arrived by the Commissioner (Appeals) in the impugned Order that the adjudicating authority had not examined the aspect of Rule 7 of the Central Excise Valuation Rules, 2000, etc., is beyond the scope of remand. Further, there has been no Show Cause Notice issued till now by the Department for recovery of the erroneous refund. In such circumstances, the entire exercise of analyzation by a further remand, as requested by the Ld. AR for the Department, is futile. The sanction of refund by the adjudicating authority is right and proper - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Whether the refund claim is in accordance with Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.
2. Whether the refund claim is barred by unjust enrichment.
3. Whether the Commissioner (Appeals) exceeded the scope of remand in denying the refund claim.

Issue-wise Detailed Analysis:

1. Rule 7 Compliance:
The appellants filed a refund claim for ?13,23,279/- due to the higher value adopted at the factory gate compared to the depot. A Show Cause Notice was issued alleging non-compliance with Rule 7 of the Central Excise Valuation Rules, 2000. The appellants revised their refund claim to ?16,65,845/- in line with Rule 7. The Original Authority initially rejected the claim but later sanctioned ?13,23,279/- after remand. The Commissioner (Appeals) later disallowed the refund, stating non-compliance with Rule 7. However, the Tribunal found that the Original Authority had complied with the remand directions and examined the price reduction and unjust enrichment, thus the rejection by the Commissioner (Appeals) was beyond the scope of remand.

2. Unjust Enrichment:
The Tribunal noted that the Original Authority had examined the issue of unjust enrichment. The appellants had cleared goods from the Kit Stores under commercial invoices without passing the excise duty element to the customers. The Original Authority found no excess duty was collected from customers, thus concluding that the refund was not barred by unjust enrichment. The Tribunal upheld this finding, stating that the Commissioner (Appeals) had erred in concluding otherwise.

3. Scope of Remand:
The remand order directed the Original Authority to examine the price reduction at the Kit Stores and the issue of unjust enrichment. The Tribunal observed that the Original Authority had followed these directions and sanctioned the refund accordingly. The Commissioner (Appeals) had gone beyond these directions by re-examining Rule 7 compliance, which was not within the scope of the remand. The Tribunal held that the Commissioner (Appeals)'s order was beyond the scope of remand and thus unsustainable.

Conclusion:
The Tribunal concluded that the Original Authority's sanctioning of the refund was proper and in compliance with the remand directions. The Commissioner (Appeals)'s order rejecting the refund was set aside. The appeal filed by the appellant was allowed with consequential reliefs as per law.