2023 (10) TMI 806 - AT - Central Excise

Principles of unjust enrichment - refund was granted but the same credited to the Consumer Welfare fund - refund claim was for duty paid under protest - HELD THAT - The learned Commissioner while passing the impugned order observed the Chartered Accountant s certificate did not mention that the excise duty for the past period have not been included in the commercial invoices and was borne by the appellant themselves but he failed to appreciate that as per common trade practice commercial invoices are issued when no duty is charged and once the duty is charged then excise invoice are to be issued. In this matter for the past period the appellant had paid the duty under protest so naturally only commercial invoices had been issued to their customers and this fact had also been recorded by this Tribunal in its order while remanding the matter to the learned Commissioner. The learned Commissioner had only to see whether the Chartered Accountant s certificate endorses the claim of the appellant that they have not charged the duty from their customers to whom they have already issued commercial invoices. It is found that the said certificate explicitly supported the stand of the appellant as it mentioned by stating that HCCBL has not received any amount over and above the amount mentioned in the respective Commercial invoices issued by them during the period February, 2000 to November 12, 2001. Since the Chartered Accountant s certificate has certified that the appellant has not recovered the duty amount of Rs.6,02,000/- from their customers, the same is not hit by the bar of unjust enrichment. The appellant is therefore entitled for refund claimed. Appeal allowed.

Summary

Issues involved:
The judgment deals with the issue of whether the authorities were justified in crediting a refund claim to the Consumer Welfare Fund due to unjust enrichment, despite granting the refund.

Issue 1 - Refund claim and unjust enrichment:
The appellant, engaged in manufacturing Mineral Water and Aerated Water, filed a refund claim for duty paid under protest for the period February 2000 to December 2001. The authorities credited the refund to the Consumer Welfare Fund on grounds of unjust enrichment. The Tribunal, in a previous order, remanded the matter to the Commissioner for further findings. The Commissioner, in the impugned order, rejected the appeal, stating that the Chartered Accountant's certificate did not prove that the duty elements were not included in the commercial invoices.

Issue 2 - Commercial vs. excise invoices:
The appellant, after paying duty under protest post-December 2001, started issuing excise invoices for waste and scrap clearance. The Commissioner noted that the Chartered Accountant's certificate did not explicitly state that duty was not included in the commercial invoices. However, the Tribunal found that common trade practice involves issuing commercial invoices when no duty is charged and excise invoices when duty is charged. The certificate explicitly stated that the duty amount was not recovered from customers.

Issue 3 - Chartered Accountant's certificate and unjust enrichment:
The Tribunal highlighted that the Chartered Accountant's certificate supported the appellant's claim that they did not recover the duty amount from customers. The certificate explicitly stated that no amount over and above the commercial invoice amounts was received. Based on this, the Tribunal held that the refund claim was not affected by unjust enrichment, allowing the appeal and setting aside the impugned order.

In conclusion, the Tribunal found in favor of the appellant, allowing the refund claim as the Chartered Accountant's certificate confirmed that the duty amount was not passed on to customers, thereby negating the unjust enrichment argument.