2019 (11) TMI 480 - AT - Central Excise

Refund of duty paid - duty paid under protest - Benefit of N/N.16/82 dated 04 February, 1982 - concessional rate of duty - Polyester Staple Fiber - denial of refund on the ground of unjust enrichment - HELD THAT - Inasmuch as the Lower Authority have not verified and examined the said invoices, we deem it fit to set aside the impugned order and remand the matter to the Original Adjudicating Authority - Needless to say that the appellant would produce the entire documentary evidences before him and would establish, either from the said invoice or from any other evidence that the duty element of which refund is being claimed by them does not stands collected from their customers. Appeal allowed by way of remand.

Summary

Issues:
1. Benefit of Notification No.16/82 dated 04 February, 1982 denied by Central Excise Authority.
2. Refund claim of duty paid during 1983-84 denied on grounds of unjust enrichment.

Analysis:
1. The appellant, engaged in manufacturing 'Polyester Staple Fiber,' was initially denied the benefit of Notification No.16/82 dated 04 February, 1982 by the Jurisdictional Central Excise Authority. Consequently, the appellant started paying duty on their final product under protest in the years 1983-84. However, the Tribunal later allowed the appellant's claim and held in their favor, recognizing their entitlement to the concessional rate of duty under the said Notification.

2. Subsequently, the appellant claimed a refund of the duty paid during the period 1983-84. The issue arose when the refund claim was rejected on the grounds of unjust enrichment by the Commissioner (Appeals). It was observed that since the duty element was shown in the gate passes issued for the clearance of the final product, it was presumed that the duty had been collected by the appellant from their customers. The appellant contended that although the duty element was reflected in the gate passes, the invoices clearly indicated that only the value of the final product without the duty element was being collected from customers. The advocate highlighted that the attention of the Lower Authorities was not drawn to these invoices, and relied on a previous Tribunal decision in favor of the appellant.

3. The crucial issue to be determined in this case was unjust enrichment. The onus to prove that the duty element was not collected from customers rested on the appellant, requiring them to produce evidence to support their claim. The advocate argued that the appellant possessed invoices demonstrating the non-collection of the duty element from customers, thereby establishing that the refund claim was not tainted by unjust enrichment. As the Lower Authority had not examined these invoices, the Tribunal decided to set aside the impugned order and remand the matter to the Original Adjudicating Authority. The appellant was directed to present all documentary evidence, including the invoices, to establish that the duty element for which a refund was sought had not been collected from customers. The Tribunal also directed consideration of a previous Final Order in favor of the appellant.

In conclusion, the Tribunal's decision focused on the issue of unjust enrichment and emphasized the appellant's responsibility to provide evidence to support their claim for a refund of duty paid. The case highlights the importance of thorough examination of documentary evidence to establish whether the duty element had been collected from customers, ultimately impacting the eligibility for a refund.