2022 (5) TMI 794 - AT - Central Excise

Refund claim - deposit/amount paid under protest - unjust enrichment - presumption could be drawn against an appellant or not - HELD THAT - The reasons attributed for rejecting the refund are not sustainable since, as held by the Hon ble Bombay High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE, PUNE 1 COMMISSIONERATE VERSUS M/S SANDVIK ASIA LTD. 2015 (10) TMI 719 - BOMBAY HIGH COURT , the entries in the Books of Accounts are immaterial and irrelevant and no presumption could be drawn against an appellant if it is shown on the expense side. It is the well settled position of law that unless the Revenue has any documentary evidence, the statute does not permit any action to be taken based only on assumptions and presumptions. Moreover, the appellant has filed a certificate issued by a Chartered Accountant to the effect that the appellant had not passed on the incidence of CENVAT Credit to its customers/any other person, which the Revenue has nowhere disputed nor is there any attempt made to dislodge the veracity of the said certificate by any concrete evidence. It is also a matter of record that the appellant had reversed the same subsequently after removal of goods and hence, there is no scope to even allege that the same was charged or collected from the appellant s customers. The reasons attributed and the denial thereof are without any basis and hence, unsustainable - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of refund of CENVAT Credit on Construction Services.
2. Justification of denial based on unjust enrichment.
3. Applicability of documentary evidence in tax disputes.
4. Relevance of Chartered Accountant certificate in proving non-passing of incidence.

Analysis:
1. The appeal was filed against the denial of refund of CENVAT Credit on Construction Services. The appellant had deposited an amount under protest after an objection was raised during a Revenue audit. The Adjudicating Authority confirmed the demand, leading to subsequent appeals culminating in the CESTAT allowing the appeal and upholding the correctness of availing CENVAT Credit on Construction Services by the appellant.

2. The application for refund was rejected on the grounds of unjust enrichment. However, the Tribunal found the reasons for rejecting the refund unsustainable. Citing a Bombay High Court judgment, it emphasized that entries in the Books of Accounts are immaterial unless proven otherwise. The Tribunal highlighted that action cannot be taken based solely on assumptions and presumptions without documentary evidence.

3. The Tribunal noted that the Revenue failed to provide any concrete evidence to dispute the certificate issued by a Chartered Accountant, confirming that the appellant had not passed on the incidence of CENVAT Credit. The Tribunal observed that the appellant had reversed the credit subsequently, indicating that it was not charged or collected from customers. It emphasized the importance of concrete evidence in tax disputes and the need to dislodge the veracity of certificates with proof.

4. Considering the lack of basis for denial and the supporting judgments cited by the appellant, the Tribunal set aside the impugned order, allowing the appeal with consequential benefits as per the law. The decision highlighted the importance of substantiated claims and the necessity for Revenue to provide documentary evidence in tax matters to support their contentions.