2025 (1) TMI 337 - AT - Central Excise

Refund of central excise duty under Section 11B of the Central Excise Act, 1944 - Self Assessment - Claim on the ground that excess payment of such duty made due to wrong valuation of goods - rejection on the ground that appellant have failed to justify that the burden of central excise duty paid by them and have not been passed on to the customers - principles of unjust enrichment - HELD THAT - In the present case appellant have paid the duty of self assessment basis. Whether the issue with regards to applicability of Section 4A or Section 4 for making assessment of duty could not have been raised by the appellant in these proceedings of refund in terms of Section 11B of Central Excise Act, 1944 needs to be considered in the light of decision of Hon ble Supreme Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV 2019 (9) TMI 802 - SUPREME COURT (LB) . Hon ble Supreme Court has specifically held that ' The provisions under Section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self- assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution for refunding amount. It is not assessment or re- assessment proceedings at all. Apart from that, there are other conditions which are to be satisfied for claiming exemption, as provided in the exemption notification. Existence of those exigencies is also to be proved which cannot be adjudicated within the scope of provisions as to refund. While processing a refund application, re- assessment is not permitted nor conditions of exemption can be adjudicated.' Nothing has been brought on record to show that the self assessment made by the appellant at the time of clearance of these goods was ever appealed against by the appellant before the Commissioner (Appeals) in terms of Section 35 of Central Excise Act, 1944 or the order of self assessment has been modified. In absence of such modification the submissions made by the appellant in these proceedings under Section 11B challenging the self assessment made for claiming this refund cannot be said to be proper. In view of the above referred decision of Hon ble Supreme Court were in it has been specifically held that refund proceedings under Section 11B are executionary in nature. Conclusion - The refund proceedings are in the nature of execution for refunding amount. It is not assessment or re-assessment proceedings at all. The appellant failed to prove entitlement to a refund under Section 11B. There are no merits in this appeal - appeal dismissed.

2023 (3) TMI 534 - AT

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the appellant is entitled to a refund of central excise duty under Section 11B of the Central Excise Act, 1944, on the basis that the goods were supplied free of cost (FOC) and not meant for retail sale.
Whether the doctrine of unjust enrichment applies in this case, preventing the refund of excise duty claimed by the appellant.
Whether the appellant has successfully demonstrated that the incidence of duty was not passed on to the customers, as required under Section 12B of the Central Excise Act, 1944.
Whether the appellant can challenge the self-assessment of duty in the refund proceedings under Section 11B of the Central Excise Act, 1944.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Refund under Section 11B

Relevant Legal Framework and Precedents: Section 11B of the Central Excise Act, 1944, provides the framework for claiming a refund of excise duty. The appellant relied on various precedents to argue that goods supplied FOC should not be assessed under Section 4A of the Excise Act.
Court's Interpretation and Reasoning: The Tribunal noted that the appellant's claim was based on the assertion that the goods were not meant for retail sale and thus not subject to Section 4A valuation. However, the Tribunal emphasized that the refund proceedings are not the appropriate forum to challenge the self-assessment of duty.
Key Evidence and Findings: The appellant failed to provide sufficient evidence to demonstrate that the goods were exempt from MRP requirements or that the self-assessment was incorrect.
Application of Law to Facts: The Tribunal held that the appellant's self-assessment was not appealed or modified, and thus, the refund claim could not challenge the assessment.
Treatment of Competing Arguments: The Tribunal rejected the appellant's reliance on precedents, emphasizing the Supreme Court's stance that refund proceedings cannot be used to reassess duty.
Conclusions: The appellant was not entitled to a refund under Section 11B as the self-assessment stood unchallenged.

Issue 2: Doctrine of Unjust Enrichment

Relevant Legal Framework and Precedents: The doctrine of unjust enrichment, as codified in Section 12B of the Central Excise Act, presumes that the duty incidence is passed on to the buyer unless proven otherwise.
Court's Interpretation and Reasoning: The Tribunal reiterated that the burden of proof lies with the appellant to demonstrate that the duty was not passed on to the customers.
Key Evidence and Findings: The appellant's Chartered Accountant certificate was not considered credible as it was produced much later and not during the original proceedings.
Application of Law to Facts: The Tribunal found that the appellant did not provide adequate evidence to rebut the presumption of duty being passed on.
Treatment of Competing Arguments: The Tribunal dismissed the appellant's argument that the doctrine of unjust enrichment was inapplicable, citing established legal principles and precedents.
Conclusions: The refund claim was barred by the doctrine of unjust enrichment as the appellant failed to prove that the duty burden was not passed on.

Issue 3: Challenge to Self-Assessment in Refund Proceedings

Relevant Legal Framework and Precedents: The Tribunal referred to Supreme Court judgments that refund proceedings are not a forum to challenge or reassess self-assessment orders.
Court's Interpretation and Reasoning: The Tribunal emphasized that self-assessment orders must be appealed or modified through appropriate channels before a refund can be claimed.
Key Evidence and Findings: The appellant did not appeal the self-assessment, nor was there any modification to the assessment order.
Application of Law to Facts: The Tribunal applied the Supreme Court's reasoning that refund proceedings are executionary and not meant for reassessment.
Treatment of Competing Arguments: The Tribunal rejected the appellant's attempt to challenge the self-assessment in the refund claim, citing the need for procedural compliance.
Conclusions: The appellant could not challenge the self-assessment during the refund proceedings.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "The refund proceedings are in the nature of execution for refunding amount. It is not assessment or re-assessment proceedings at all."
Core Principles Established: The Tribunal reinforced the principles that refund claims cannot be used to challenge self-assessment orders and that the doctrine of unjust enrichment applies unless the burden of duty is proven not to have been passed on.
Final Determinations on Each Issue: The appeal was dismissed as the appellant failed to prove entitlement to a refund under Section 11B, the doctrine of unjust enrichment barred the refund, and the self-assessment could not be challenged in the refund proceedings.

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