2024 (7) TMI 684 - AT - Central Excise

Refund claim - International Competitive Bidding (ICB) as per Sl. No. 336 of Notification No.12/2012-CE dated 17.03.2012 - denial of exemption only on the ground that at the time of clearance of goods, the Appellants have not fulfilled the condition under clause (b) of condition No.93 of Customs Notification No.12/2012-Cus dated 17.03.2012, which provided that in the case of imports by a Central Public Sector undertaking, the quantity, total value, description and specifications of the imported goods are certified by the Chairman and Managing Director of the said Central Public Sector Undertaking - principles of unjust enrichment. HELD THAT - When the condition was amended on 01.03.2015, it was not practically possible for the appellant to obtain a required certificate within the same month. Therefore, the appellant has chosen to clear the goods on payment of duty, subsequently, admittedly the appellant have obtained certificate. Thereafter all the conditions of Notification No. 12/12-CE dated 17.03.2012 and Notification No. 12/2012-Cus dated 17.03.2012 and conditions thereof stands complied with. In this position, merely because the certificate required for availing the exemption notification was not available at the time of clearance of the goods, the exemption could not have been denied. Piece of paper i.e. certificate is only a procedural requirement but the nature of supply is predominant for granting the exemption which was never been in dispute, after obtaining certificate the procedural requirement also stands fulfilled. It is a settled law by the Hon ble Apex Court in the various judgments that benefit of Notification can be claimed at any stage if otherwise the same is eligible to the assessee. Therefore even though at the time of clearance of the goods the appellant have paid the duty but after obtaining the certificate, all the conditions prescribed under notification stand complied with - In some of the judgments, it is categorically held that merely because at the time of clearance of goods certificate was not available, however the same was submitted later on the substantial benefit of exemption cannot be denied. Therefore, the issue is no longer res-integra. Principles of unjust enrichment - HELD THAT - The adjudicating authority has categorically dropped the proceeding under Section 11B(2) holding that there is no unjust enrichment in this case. This observation was also endorsed by the Learned Commissioner (Appeals) in the impugned order. The appellant is eligible for exemption notification and consequential refund of the duty paid at the time of clearance of goods. Therefore, the impugned order is set aside - Appeal allowed.

Summary

Issues:
1. Eligibility for exemption under Notification No. 12/2012-CE and Notification No. 12/2012-Cus.
2. Denial of exemption due to non-fulfillment of certificate requirement.
3. Validity of refund claim and procedural lapses.
4. Unjust enrichment considerations.

Analysis:

Issue 1: Eligibility for exemption under Notifications:
The Appellants were engaged in manufacturing machinery classified under Chapter 84 & 85 and were awarded a contract for supply of plant and machinery for a Hydroelectric project. The project was certified by the Ministry of Power, making it eligible for exemption under Notification No. 12/2012-CE and Notification No. 12/2012-Cus. The Appellants fulfilled the eligibility criteria for exemption under the said notifications.

Issue 2: Denial of exemption due to non-fulfillment of certificate requirement:
The Adjudicating authority rejected the refund claim citing non-production of the required certificate from the PSU at the time of goods clearance. However, the Tribunal noted that the certificate requirement was introduced in an amended notification after the goods were cleared. The Appellants subsequently obtained the necessary certificate, fulfilling all conditions for exemption. The Tribunal emphasized that the nature of supply is crucial for granting exemption, and the procedural lapse of certificate submission did not invalidate the Appellants' eligibility for exemption.

Issue 3: Validity of refund claim and procedural lapses:
The Appellant's counsel argued that the refund claim was legitimate, supported by precedents where delayed submission of required documents did not bar the eligibility for exemption. The Tribunal agreed, stating that once all conditions were met, including obtaining the certificate, the Appellants were entitled to claim the exemption and seek a refund of the duty paid at the time of clearance. The Tribunal overturned the previous orders and allowed the appeal, granting consequential relief to the Appellants.

Issue 4: Unjust enrichment considerations:
The Adjudicating authority and the Commissioner (Appeals) found no unjust enrichment in the case, leading to the dropping of proceedings under Section 11B(2). The Tribunal concurred with this finding, further supporting the Appellants' eligibility for exemption and refund of duty paid.

In conclusion, the Tribunal ruled in favor of the Appellants, holding that they were eligible for the exemption notification and entitled to a refund of the duty paid at the time of goods clearance. The judgment emphasized the importance of the nature of supply over procedural requirements and highlighted that delayed submission of necessary documents does not negate eligibility for exemption.