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2019 (6) TMI 1018 - AT - Central ExciseAdjustment of short paid duty against the refund claimed by the appellant for excess amount of duty paid - contention of the Revenue is that since the assessment was not provisional in accordance with Rule 7 of the Central Excise Rules, 2002, therefore, the appellant is precluded from adjusting the excess/shortage of duty against their liability - HELD THAT - A number of disputes on setting off of excess duty paid against short payment has withstood the test of law. In terms of the decision in MY CAR PUNE PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I 2015 (10) TMI 457 - CESTAT MUMBAI such adjustments are possible but only upon sanction of the refund claims. The appellant herein has furnished the refund claims and we find that there has been no proper disposal of those claims. Such disposal would require an ascertainment of eligibility for refund at the threshold and, upon it being shown the incidence of duty has not been passed on, to be allowed as refund. The right to refund of eligibility amount is vested in the hands of the individual/entity who has borne the duties and it cannot be retained by the exchequer. In order to ensure that there is a proper compliance with the settled law on sanction, as well as adjustment, of refund, the impugned order is set aside and matter remanded back to the adjudicating authority to decide the claim afresh - appeal allowed by way of remand.
Issues Involved:
1. Refund claims for excess duty paid. 2. Adjustment of excess duty against short-paid duty. 3. Provisional assessment and its implications. 4. Bar of unjust enrichment in refund claims. Issue-wise Detailed Analysis: 1. Refund Claims for Excess Duty Paid: The appellant claimed refunds for various periods, with specific amounts detailed for each period. The initial claims were rejected or partially allowed, leading to multiple appeals and remands. The Tribunal referenced previous decisions, such as *Savita Chemicals Ltd v. Commissioner of Central Excise, Belapur*, which emphasized that the appellant is entitled to adjust short-paid duty against excess paid if the assessment was provisional. The Tribunal noted that the adjudicating authority had held the self-assessment as provisional, thus supporting the appellant's claim for adjustment. 2. Adjustment of Excess Duty Against Short-Paid Duty: The appellant sought to adjust the excess duty paid against the short-paid duty. The Tribunal referred to the decision in *Toyota Kirloskar Auto Parts Pvt Ltd v. Commissioner of Central Excise, LTU, Bangalore*, which held that after the final assessment, if there is an excess duty paid, it should be adjusted against any shortfall before imposing interest. The Tribunal in the present case found that this principle applies, and the excess duty paid by the appellant should be adjusted against the short-paid duty. 3. Provisional Assessment and Its Implications: The Tribunal discussed the nature of provisional assessments, highlighting that the appellant had consistently claimed provisional assessment, supported by documentation. The Tribunal cited *Raptakos Brett & Co Ltd v. Commissioner of Central Excise, Mumbai III*, reinforcing that provisional assessments allow for adjustments of excess payments against shortfalls. The Tribunal concluded that the assessments in question were indeed provisional, thus permitting the adjustments sought by the appellant. 4. Bar of Unjust Enrichment in Refund Claims: The Tribunal addressed the respondent's argument regarding the bar of unjust enrichment, which requires proof that the duty incidence was not passed on to another party. The Tribunal referenced *My Car Pune Pvt Ltd v. Commissioner of Central Excise, Pune I*, which stated that adjustments of excess payments against short payments are permissible only after the refund claims have been sanctioned, ensuring no unjust enrichment. The Tribunal emphasized that the appellant must demonstrate that the duty incidence was borne by them to be eligible for refunds. Conclusion: The Tribunal set aside the impugned order and remanded the matter back to the adjudicating authority for fresh consideration. The adjudicating authority was directed to reassess the refund claims, ensuring compliance with the principles of provisional assessment and unjust enrichment. The Tribunal emphasized the need for a thorough verification process to ascertain eligibility for refunds and proper adjustments of excess payments against shortfalls. The decision aligns with established legal precedents, ensuring that the appellant's rights are upheld while adhering to statutory provisions. Order Pronounced in Open Court on 20.06.2019.
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