2023 (12) TMI 746 - AT - Central Excise

Scope of appeal - Refund of excess paid duty - price variation clause - rejection on the ground of unjust enrichment - HELD THAT - Admittedly the Adjudicating Authority found the refund admissible on merits. However, the same was rejected on the ground of unjust enrichment - it is further held that other than this issue of unjust enrichment, the Commissioner (Appeals) have travelled beyond the scope of the appeal and his other observations are by way of obiter dicta. Unjust enrichment - HELD THAT - Admittedly Appellant have not received the full amount as per the invoices and further at the time of finalisation of the supply bill, under the contract in question, the buyer of the goods South Central Railway, have made adjustment of both the downward revision of the price including the excise duty, which is evident from the communication dated 18.08.2010 which have been annexed in the appeal paper book. Thus, it is evident that, as the buyer of the goods have paid reduced adjusted amount, the Appellant never received the amount of duty being claimed as refund, being excess duty paid, admittedly - Appellant have satisfied that it is the Appellant who have borne the burden of duty for the amount of Rs. 5,26,244/-. Accordingly, the Appellant is entitled to refund of the amount of Rs.4,77,292/-, which is not barred by limitation. The impugned order is set aside - appeal allowed.

Summary

Issues involved:
The appeal concerns the rejection of a refund claim totaling Rs. 5,26,244/- due to unjust enrichment.

Details of the Judgment:
1. The appellant sought a refund of excess excise duty payment of Rs. 5,26,244/- for Pre-Stressed Concrete (PSC) sleepers supplied to Railways. The price of sleepers was decreased post-clearance, resulting in the payment of excess duty. The Original Authority rejected a portion of the refund as time-barred and the rest on the grounds of unjust enrichment, stating that the burden of excess duty was passed on to the buyer.

2. The Commissioner (Appeals) upheld the rejection, emphasizing that the duty charged was mentioned in the invoices and the agreement with the Railways. The Commissioner noted that the appellant should have opted for provisional assessment and that there was no provision to adjust the transaction value post-removal based on price reduction. The refund was deemed unavailable on both merit and unjust enrichment grounds.

3. The appellant challenged the decision before the Tribunal, arguing that the Commissioner (Appeals) erred in ignoring evidence of downward price revision and unjust enrichment. The appellant contended that they did not receive the differential amount, including duty, due to the price revision.

4. The Tribunal observed that the refund application was made under Section 11B of the Act, which allows for refund of excise duty if not passed on to another person. The Tribunal found that the appellant had not received the full amount as per the invoices and that the buyer had made adjustments for the downward price revision, including the excise duty. Therefore, the Tribunal held that the appellant had borne the burden of duty and was entitled to a refund of Rs. 4,77,292/-, not barred by limitation.

5. The Tribunal set aside the impugned order, allowing the appeal and directing the Adjudicating Authority to grant the refund along with interest within 60 days. The decision was pronounced in open court on 14.12.2023.