2023 (3) TMI 172 - AT - Central Excise

Refund of central excise duty - Service Air Trolley (SAT 300) supplied to Indian Air Force - It is the case of the appellant that though the invoices mentioned central excise duty on the goods supplied, they have not collected the duty from the buyer as the goods are exempted from central excise duty - Refund rejected on the ground of unjust enrichment. HELD THAT - Undisputedly, the appellants have mentioned the excise duty in the invoices. Then presumption envisaged in Section 12 B of the Central Excise Act, 1944 is attracted. However, this presumption is a rebuttable one. It is for the appellant to establish that they have not collected the duty from the buyer. Appellant has furnished a certificate from the buyer to show that price in the supply order is without including the excise duty. The appellant has now produced Certificate issued by the Chartered Accountant along with relevant Financial Statement, to establish that the incidence of duty has not been passed on to the buyer. However, these documents require verification as these were not presented before the authorities below. The matter requires to be remanded to the original authority, who shall consider the issue of refund afresh on the basis of the documents including the CA certificate and the audited financial statement produced by the appellant. The appellant shall be given an opportunity of personal hearing. Appeal allowed by way of remand.

Summary

Issues:
1. Refund claim of central excise duty for "Service Air Trolley" supplied to Indian Air Force.
2. Rejection of refund claim on the ground of unjust enrichment.
3. Appellant's contention of not passing on the duty to the buyer.
4. Discrepancy in the invoices and the supply order regarding excise duty.
5. Requirement of verification of documents for establishing non-passing of duty incidence.

Analysis:
The appellant filed a refund claim for central excise duty on "Service Air Trolley" supplied to Indian Air Force, contending that the duty incidence was not passed on to the buyer as the goods were exempted from duty. However, the claim was rejected on the basis of unjust enrichment, with authorities citing the presumption under Section 12 B of the Central Excise Act, 1944 that duty incidence is passed on when mentioned in invoices. The appellant argued that the duty was not collected from the buyer, supported by a supply order indicating nil excise duty and a certificate from the buyer. The Tribunal noted the discrepancy in the invoices splitting the value into assessable and duty components.

The appellant presented a Chartered Accountant Certificate and financial statements to prove non-passing of duty incidence, which were not submitted to the lower authorities. The Tribunal emphasized the need for verification of these documents and remanded the matter to the original authority for reconsideration. The appellant was granted a personal hearing in this regard. The Tribunal held that the appellant must establish the non-collection of duty from the buyer to be eligible for a refund, despite the presumption under Section 12 B. The appeal was allowed for remand, setting aside the impugned order for further examination based on the additional documents provided.

In conclusion, the judgment focused on the appellant's burden to prove non-passing of duty incidence to claim a refund, requiring verification of documents not previously submitted to the lower authorities. The case highlights the importance of establishing the factual basis for refund claims and addressing discrepancies between invoices and supply orders to avoid unjust enrichment issues.