2007 (4) TMI 12 - AT - Central Excise

Tribunal grants refund, overturns revenue's decision.

The Tribunal allowed the appeal, setting aside the impugned order and granting relief to the appellants. It was determined that the refund claimed was ... Refund – Appellant claim for refund of excess duty paid to revenue is rejected in a decision of lower authority – Concerned authority after undertaking all the details decided that appellant is liable for refund Issues:Challenge against the impugned order based on refund claims and unjust enrichment.Analysis:The appeal was filed against an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals-II) Hyderabad, regarding the clearance of Dot Matrix and Line Matrix products from the factory to the depots. The duty was paid at the stock transfer price during clearance, with provisional assessment. Subsequently, correct duty liability was calculated based on normal transaction value, leading to refund orders granted to the appellants. However, the revenue issued a Show Cause Notice claiming the refunds were erroneous and hit by unjust enrichment. The lower authorities upheld the revenue's proposals, which the appellants strongly contested.Upon hearing both parties, it was established that the refund arose due to the variance between stock transfer price and normal transaction value. The appellants paid higher duty during clearance but collected duty based on normal transaction value upon selling the goods, resulting in no unjust enrichment as the duty burden was borne by the appellants. The contention that refunds from finalizing provisional assessments cannot be recovered without challenging the assessments was supported by various legal precedents, emphasizing the need to challenge refund orders before issuing recovery notices.Given the above observations, the Tribunal concluded that the appellants were entitled to the refund, unjust enrichment did not apply, and the Show Cause Notice issued without challenging the refund order was unsustainable. Consequently, the appeal was allowed, and the impugned order was set aside, providing consequential relief to the appellants.