2023 (11) TMI 252 - AT - Central Excise

Refund claim - rejection on the ground of time limitation - relevant date for filing the refund claim under Section 11B on the basis of the date of finalization of assessment - Section 11 B of the Central Excise Act, 1944 - rejection also on the ground of unjust enrichment - HELD THAT - From the perusal of the Section 11 B (1) along with explanation at (eb) it is quite evident that relevant date in the cases of the finalization of assessment, is not the date of finalization of provisional assessment but is the date of adjustment of duty after the final assessment thereof. In the case of refunds arising as result of finalization of assessment will be the date when either that amount is paid to the appellant or credited to the fund. In the present case neither has been done till date, nay, on the date when the application for the refunds have been filed under Section 11 B. That being so the refund claim cannot have been held as time barred for the reason that the relevant date for counting the period of limitation has not even started - the rejection of three refund claims on the ground of time bar cannot be upheld. Unjust enrichment - HELD THAT - The duty in this case is paid by the appellant on the normal transaction value and not the actual transaction value. The actual transaction value at which the goods were sold by the appellant may be different from the normal transaction value determined on the basis of maximum aggregate quantity of sale value. Further it was for the reason that correct assessable value could not have been determined at the time of clearance of the goods from the factory gate, the assessment were ordered to be provisional. The actual assessable value is as per the finalization order and duty determined accordingly. Appellants have produced a certificate dated December 15, 2021 from the Chartered Accountant, G Ganesh to establish that they have not passed on the burden of the duty to their customers - in view of the Certificate of Chartered Accountant it is abundantly evident that appellant have rebutted the presumption of having passed on the burden of duty claimed as refund to the consumer. Hence the rejection of the refund claims on this ground also is not justified. There are no merits in the impugned order and the same is set aside - appeal allowed.

Summary

Issues Involved:
1. Time Limitation for Filing Refund Claims
2. Unjust Enrichment
3. Provisional Assessment and Final Assessment Orders

Summary:

1. Time Limitation for Filing Refund Claims:
The appeal was directed against the rejection of six refund claims by the Commissioner (Appeal), who upheld the Deputy Commissioner's order. The Deputy Commissioner rejected the refund claims on the grounds that they were filed after one year from the date of finalization of provisional assessments, thus barred by limitation under Section 11B of the Central Excise Act. The Tribunal noted that the relevant date for computing the limitation should be the date of adjustment of duty after final assessment, not the date of finalization of assessment. Since the refund claims were filed before the expiry of one year from the date of the Joint Commissioner's order (30.12.2016), they were not barred by limitation.

2. Unjust Enrichment:
The Deputy Commissioner also rejected the refund claims on the grounds of unjust enrichment, stating that the appellant had failed to prove that the incidence of duty had not been passed on to the consumers. The Tribunal observed that the appellant provided a Chartered Accountant's certificate confirming that the duty burden was not passed on to the customers. The Tribunal referred to the Hon'ble Supreme Court's decision in Addison & Co Ltd., which supported the acceptance of such certificates as evidence. Therefore, the rejection of refund claims on the grounds of unjust enrichment was not justified.

3. Provisional Assessment and Final Assessment Orders:
The Tribunal noted contradictions in the impugned order regarding the determination of the relevant date for filing refund claims. The final assessment orders were subject to the outcome of show cause notices related to the inclusion of freight in the assessable value. The Tribunal emphasized that under Rule 7 of the Central Excise Rules, 2002, the refund arising from finalization of provisional assessments should be paid to the claimant or credited to the Consumer Welfare Fund without the requirement of further application under Section 11B. The Tribunal found that the rejection of refund claims on the grounds of limitation and unjust enrichment was contrary to the provisions of Rule 7 and the Central Excise Manual.

Conclusion:
The Tribunal set aside the impugned order, holding that the refund claims were not time-barred and were not hit by unjust enrichment. The appeal was allowed.