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TMI Blog2013 (11) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... nciple of unjust enrichment for its refund - This amount should have been refunded without even refund application. Revenue’s contention is that the amount of excise duty is included is cost of goods in the year 2001-2002. But I find that out of the ₹ 18,75,000/-, ₹ 8,40,120/- has already been paid and adjusted by the Department without considering the cost structure of goods. Therefore is my view that bar of unjust enrichment cannot be now applied to rest of ₹ 10,34,880/- in this case. - Decided in favor of assessee. - Appeal No.E/3511/2005-EX[DB] - FINAL ORDER NO. 57605/2013 - Dated:- 11-9-2013 - Mr. D.N. Panda and Mr. Rakesh Kumar, JJ. For the Appellant : Shri P.R. Mullick, Advocate For the Respondent : Shri Sanjay Jain, DR JUDGEMENT PER: RAKESH KUMAR In this case the factory premises of the appellant, manufacturer of MS tubes and pipes, was visited by Jurisdictional Central Excise Officers on 15.09.2001 and they found shortage of the finished goods and cenvated raw-materials. During investigation of the case, on the persuasion of the investigating officers the appellant deposited an amount of Rs.18,75,000/- under protest by debit en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -02, it cannot be assumed that this amount has been passed on as increased cost and hence increased sale price of the goods and that in view of these submissions, the impugned order rejecting the refund claim on the ground of unjust enrichment is not sustainable. 4. Shri Sanjay Jain, ld. DR, defended the impugned order by reiterating findings of the Commissioner (Appeal) and submitted that once the amount in shown in profit and loss account as Revenue expenditure, the same gets included in the costing of the product and therefore in this case, since the duty whose refund had been claimed has been recovered from the customers in form of increased cost and hence higher sale price, the refund claim is hit by unjust enrichment. He therefore, pleaded that there is no infirmity in the impugned order. 5. We have considered the submissions from both the sides and perused the record. The only point of dispute in this case is as to whether the amount whose refund is being claimed is hit by unjust enrichment or not. 6. Firstly, the provisions of Section 11B would be applicable to a refund claim only if the claim is for refund of excess Central Excise duty paid. The bar of unjust enrichm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not even excise duty paid on any goods cleared under an invoice issued to a buyer, while presumption under section 12B applies only in respect of excise duty paid on any goods cleared under an invoice. Therefore section 12 B read with section 12A is not applicable to this case and no presumption can be made that the amount of Rs.10,34,880/- where refund is sought, had been recovered from the customers as increased cost and hence increased price. The burden would be on the Department to prove that this amount had been recovered from the buyers as increased price. In this regard no presumption can be made that just because this amount has been shown as revenue expense in the profit loss account for the year 2001-02, it has contributed towards costing of the goods resulting in higher cost and higher sale price and has been recovered from the customers. No price data of that period has been produced. 8. In our view, therefore, the Revenues stand that the refund claim is hit by unjust enrichment is not only totally incorrect but absurd and as such the impugned order is not sustainable. Appeal is, therefore, allowed. PER: D.N. PANDA 9. I have listened to the dictation of my le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account whether that is a case of absorption of the duty burden in sale price and recovered from the buyers. The material facts recorded above admittedly shows that the amount in dispute did not appear on the balance sheet in the asset side for recovery from the Department. Once there is no such disclosure of recovery from the Department and exhibited by Balance Sheet, definitely the amount in question was adjusted in the cost of manufacture through profit and loss account as excise duty as has been done by appellant in this case and admitted by it as well as absorbed by sale value. Thus the amount sought to be refunded by appellant was already recovered by him through sale. Therefore, it has no locus standi to seek refund from Revenue to be unjustly enriched at the cost of Revenue. The amount in dispute having been a constituent of the cost of manufacture, it cannot be said that such cost was not absorbed by sale price. This is the basic matching principle of accounting which is followed by manufacturing concerns depicting the accounting elements in the debit side of the profit and loss account to represent cost. Such material facts were governing features of the case which was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of refund in question. He submits that if the refund is granted their profit amount will go up from Rs. 84 lakhs to about Rs. 95 lakhs and there is no question of any increase in the cost of the price of product. He submits that since refund pertains to advanced deposit paid by them unjust enrichment is not applicable to their case. 19. Ld. Departmental Representative appearing for the Revenue submitted that once the amount is shown in Profit and Loss Account as revenue expenditure same gets included in the costing of the product and the duty paid is recovered from the customers by way of increased cost and hence higher sale price attracting the bar of unjust enrichment. Ld. DR also relied upon the decision of the Supreme Court in case of Solar Pesticide Pvt. Ltd. Reported in 2000 (116) ELT 401 (S.C.) in which it was held by the Court that duty paid on raw material gets added to price of finished goods and incidence of duty is considered to have been passed to buyers. He further submits that refund has rightly been rejected by the lower authorities on the ground of unjust enrichment. 21. Heard both sides. 22. I find that the issue involved in the present case is appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Rs. 18,75,000/-, Rs. 8,40,120/- has already been paid and adjusted by the Department without considering the cost structure of goods. Therefore is my view that bar of unjust enrichment cannot be now applied to rest of Rs. 10,34,880/- in this case. 27. Revenue also relied on case of Solar Pesticide Pvt. Ltd. (Supra). In that case refund pertained to duty of customs paid on raw material and the court observed that raw material is used in the manufacture of final product duty portion has gone into cost of final product and subsequently gets passed on the buyers of final products. This case is distinguishable for the present case as refund claim is not in respect of raw material but pertains to goods already cleared by the appellant and amount was paid during the investigation 28. In view of above, I agree with view of Shri Rakesh Kumar, Member (Technical) and reference is answered accordingly. Registry is directed to place the matter before referred Bench. (Pronounced in court on 04.09.2013) MAJORITY ORDER PER: D.N. PANDA In view of the answer of Third Member in reference of difference of opinion between Members of the Bench, this appeal is disposed holding tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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