2016 (2) TMI 588 - AT - Central Excise

Tribunal upholds refund claim, rejects Revenue's appeal on unjust enrichment issue.

Commissioner of C. Ex. & S.T., Allahabad Versus UAL Uttar Pradesh

The Tribunal upheld the Commissioner's decision to allow the refund claim, dismissing the Revenue's appeal. It found that the respondent demonstrated the ... Refund claim - Commissioner (A) has allowed the refund claim holding that respondent has passed the bar of unjust enrichment - Held that:- On passing of duty of incidence is to be seen in a way that whether the buyer has claimed the credit of duty paid by the respondent or not. Admittedly the buyer of the respondent are not registered with Central Excise Department, therefore, claiming the credit of duty paid by the respondent does not arise. In these circumstances, the credit note issued by the respondent to their buyers is a sufficient document to hold that respondent has passed the bar of unjust enrichment. As discussed above, the fact is on record that buyer of the respondent are not registered dealer and have not taken Cenvat credit of the duty paid by the respondent. In that case, credit note issued by the respondent is sufficient proof of passing the bar of unjust enrichment. In these circumstances, hold that respondent is entitled for refund claim of excess duty paid by them at the time of provisional clearance of the goods. - Decided in favour of assessee Issues:Refund claim based on unjust enrichment.Analysis:The appeal concerns a refund claim where the Commissioner allowed the claim, but the Revenue challenged it. The respondent, a manufacturer of Asbestos Cement products, initially paid duty provisionally, which was later reduced upon final assessment. The respondent issued credit notes to non-registered buyers to support their claim of passing the bar of unjust enrichment. The Revenue contended that the respondent failed to prove that the ultimate consumer was not burdened with the duty element. The respondent argued that since the buyers were not registered with the Central Excise Department, claiming Cenvat credit on the invoices did not apply, and the credit notes demonstrated the absence of unjust enrichment. The Tribunal analyzed the facts and relevant case laws cited by both parties.The Tribunal examined whether the duty incidence had been passed on to the buyers by the respondent. Since the buyers were not registered with the Central Excise Department, the possibility of them claiming credit of duty paid did not arise. The issuance of credit notes by the respondent was considered sufficient evidence that the bar of unjust enrichment had been passed. The Tribunal distinguished the cited case laws, stating they were not applicable to the current situation. The Tribunal emphasized that the buyers not being registered dealers and not availing Cenvat credit supported the respondent's claim. Consequently, the Tribunal upheld the Commissioner's decision to allow the refund claim, dismissing the Revenue's appeal.In conclusion, the Tribunal found that the respondent had successfully demonstrated the passing of the bar of unjust enrichment through the issuance of credit notes to non-registered buyers. The decision was based on the specific circumstances of the case and the absence of evidence indicating that the duty burden had been transferred to the ultimate consumer. The Tribunal's ruling upheld the refund claim and dismissed the Revenue's appeal, affirming the Commissioner's order.