2025 (2) TMI 527 - AT - Customs

Refund claim - refund allowed on the ground that respondent was able to pass the bar of unjust enrichment - goods were sold by the respondent on M.R.P. basis - the amount of excess duty paid by the respondent has been shown as receivable - domestically procured goods have suffered less duty and imported goods have suffered more duty. HELD THAT - The said issue as to whether on M.R.P. based goods the bar of unjust enrichment is applicable or not has been dealt with by this Tribunal in the case of M/s. Birla Corporation Ltd. 2017 (8) TMI 785 - CESTAT ALLAHABAD wherein the Tribunal observed that it is an admitted fact that the appellant have received the same price/MRP for clearances of goods on 6 December 7 December 8 December and so on. Accordingly I hold that there can be no presumption that the appellant have passed on the excess duty deposited erroneously on 7 December to the buyer of the goods. Accordingly I hold that the doctrine of unjust enrichment has been satisfied by the appellant assessee and I hold them entitled to refund of the amount in question. Conclusion - The duty burden was not passed on to buyers and therefore the refund claim was not barred by unjust enrichment. There are no merit in the appeal filed by the Revenue and accordingly the same is dismissed.

Summary

The Appellate Tribunal heard an appeal filed by the Revenue against an order allowing a refund claim by the respondent. The main issue was whether the respondent had passed the bar of unjust enrichment regarding the excess duty paid by them. The respondent, engaged in manufacturing and trading of ayurvedic products, imported goods from Nepal and sought a refund for excess duty paid during a specific period. The adjudicating authority initially denied the refund on the grounds of unjust enrichment, but the Commissioner (Appeals) later granted the refund, stating that the conditions for unjust enrichment were not met. The Tribunal considered the arguments presented by both parties.In the case, the Revenue argued that the duty component was passed on to buyers as the goods were sold on M.R.P. basis. On the other hand, the Respondent contended that they had not passed on the duty to customers but had borne it themselves, as evidenced by their financial statements and a Chartered Accountant's certificate. They argued that the excess duty paid was shown as "receivable" in their accounts and not recovered from customers. The Respondent cited precedents and decisions to support their position, emphasizing that the bar of unjust enrichment had been passed.The Tribunal analyzed the issue and referred to previous decisions such as M/s. Birla Corporation Ltd. and M/s. Girish Foods & Beverages (P) Ltd. where similar issues were addressed. They highlighted that in cases where duty was paid under protest or where the duty burden was not passed on to buyers, the bar of unjust enrichment was considered satisfied. The Tribunal distinguished the facts of the current case from the precedent cited by the Revenue, emphasizing that in this instance, the duty was not reflected in the final product's value but was based on M.R.P. The Tribunal concluded that the duty burden was not passed on to buyers, and therefore, the refund claim was not barred by unjust enrichment.Ultimately, the Tribunal dismissed the Revenue's appeal, stating that they did not find any merit in the arguments presented. The decision was pronounced in open court on 12.02.2025.