2010 (6) TMI 356 - AT - Central Excise

Tribunal Grants Refund: Duty Burden Not Passed On

The Tribunal overturned the appellate authority's decision and restored the order of adjudication, granting the refund to the appellant. The Tribunal ... Refund – unjust enrichment - issuance of credit note to the concerned buyer before the end of financial year – Held that: - no evidence on record to show that the buyers shall not be given credit in their accounts - no investigation done at the buyers end by the Revenue - burden is not passed on, or it has been reversed, the claim of refund cannot be denied discarding revenue's argument that mechanism of issuance of debit notes and credit notes, if countenanced, it will open flood gates for pilferage of revenue - stay application has become infrustuous Issues:Claim for refund of excess duty invoiced by the appellant.Analysis:The appellant claimed a refund of Rs. 3,30,507, stating that they invoiced excess duty not payable according to law. The show cause notice highlighted the discrepancy in duty payment by the appellant. The appellant's counsel argued that the authorities did not properly examine the evidence supporting the refund claim. Various documents were presented, including credit notes, a Chartered Accountant's Certificate, and balance sheet extracts, to demonstrate that the duty burden was not passed on to buyers. The counsel contended that the appellant was not unjustly enriched and was entitled to the refund. The appellate authority had reversed the adjudication order without sufficient examination of the evidence, which the counsel sought to rectify.The appellant's counsel emphasized that the evidence proved the duty liability was not transferred to buyers, justifying the refund claim. The counsel pointed out that the appellate authority had erred in reversing the adjudication order without proper consideration of the evidence presented. The counsel relied on the Chartered Accountant's Certificate, credit notes issued to buyers, and balance sheet extracts to support the claim that the appellant had not realized the duty amount from buyers. The counsel argued that the appellant should not be denied the refund as they were not unduly enriched and had followed proper procedures in issuing credit notes and maintaining financial records.Referring to relevant case laws, the counsel highlighted instances where the burden of duty not passed on to buyers justified refund claims. The counsel cited the High Court judgments emphasizing that if the burden of duty was not transferred, the claim for refund could not be denied. The counsel argued that the revenue's concerns about potential revenue loss through credit notes were unfounded, as proper documentation and evidence supported the appellant's refund claim. The counsel urged for the restoration of the adjudication order granting the refund based on the evidence presented.The Tribunal examined the evidence presented by the appellant, including credit notes, financial records, and the Chartered Accountant's Certificate. It was noted that there was no evidence to suggest that the duty burden was passed on to buyers, and the appellant had followed proper procedures in issuing credit notes. The Tribunal agreed that the appellant was entitled to the refund as per the show cause notice and that the appellate authority had erred in reversing the adjudication order without sufficient examination of the evidence. Citing relevant case laws, the Tribunal emphasized that if the duty burden was not transferred, the claim for refund could not be denied. The Tribunal overturned the appellate authority's decision and restored the order of adjudication, granting the refund to the appellant.