2022 (11) TMI 1087 - AT - Central Excise

Refund claim of excess Central Excise duty paid - rejection of refund claim on the ground that the effective date as per the sub-section 5 of Section 5A of the Central Excise Act, 1994 would be the day of issue of Notification, irrespective of the facts that whether it was published and offered for sale by the Director of Publicity and Public Relations of the CBEC, or not - principles of unjust enrichment - HELD THAT - The background of the refund claim is that the appellant though paid excess duty but the rate of duty was revised downward by notification. Only due to the reason that system was not updated, the duty was paid on the higher rate, the appellant though shown the higher duty in the invoices, subsequently, the excess paid duty was adjusted and the same was given reduction in the subsequent updated payment recovered from buyers of the goods. To this effect, the appellant filed refund claim on the ground that the differential duty on account of enhancement rate was not payable by them due to late receipts of the Notification which should come into force from the date of its publication and offer for sale. Relevant provisions is made under sub-section (5) of Section 5A of Central Excise Act, 1994. From the said provision it is absolutely clear that any Notification issued under sub-section (1) or sub-section (2A) come into force on the date when it is published and offered for sale on the date of issue - it is undisputed fact in the present matter that the Notification were not offered for sale by the Directorate of Publicity and were put on the CBEC website on the next date around 11 45 hours on 13.11.2014 in respect of Notification No. 22/2014 CE dated 12.12.2014 and on the late evening of 02.12.2014 in respect of Notification No. 24/2012-CE dated 02.12.2014. Therefore, both the Notification will be effective from its publication and refund on this ground is admissible to the Appellant. Principles of unjust enrichment - HELD THAT - The ld. Commissioner (Appeals) in impugned order as regard the issue of unjust enrichment held that once the issue on merits is decided against the appellant there is no requirement of going into the aspect of unjust enrichment - Thus this issue has not been considered. Since in the present matter issue of unjust enrichment not properly considered by the Ld. Commissioner (Appeals), the matter needs to be remanded to the adjudicating authority for passing a fresh order only in respect of unjust enrichment - appeal allowed by way of remand.

Summary

Issues:
Refund claim admissibility based on the effective date of Central Excise Duty notification, unjust enrichment determination.

Refund Claim Admissibility:
The case involved a refund claim by the appellant for excess duty paid on Motor spirits and High Speed Diesel due to an increase in Central Excise Duty. The lower authorities rejected the claim based on the effective date of the notification. The appellant argued that the duty was paid after a month and not passed on at the time of clearance. The Tribunal found that the duty revision notification did not specify the effective date, and since the notifications were not offered for sale immediately, they would be effective from the date of publication. Relying on precedents, the Tribunal allowed the refund claim, emphasizing that the duty incidence was not passed on at the time of clearance.

Unjust Enrichment Determination:
The Tribunal noted that the issue of unjust enrichment was not adequately considered by the lower authorities. As the Commissioner (Appeals) did not delve into this aspect after deciding against the appellant on merits, the Tribunal remanded the matter for a fresh determination solely on unjust enrichment. The Tribunal directed the adjudicating authority to verify if the duty incidence had been passed on to customers and ordered a de novo order based on this aspect. The Tribunal set aside the impugned order and granted the appellant an opportunity to present supporting documents for a proper assessment of unjust enrichment.

In conclusion, the Tribunal allowed the appeal by remanding the matter for a fresh order on unjust enrichment, emphasizing the need for a thorough examination of whether the duty incidence had been passed on to customers. The Tribunal highlighted the importance of proper consideration of unjust enrichment in refund cases and granted the appellant an opportunity to present relevant documents for a fair determination.