2013 (4) TMI 981 - AT - Central Excise

Tribunal upholds refund, rejects Revenue's appeal on duty demand based on invalid proforma invoice

COMMISSIONER OF CENTRAL EXCISE, PUNE-I Versus S.S. ENGINEERS

COMMISSIONER OF CENTRAL EXCISE, PUNE-I Versus S.S. ENGINEERS - 2014 (313) E.L.T. 429 (Tri. - Mumbai) Issues involved: Dropping of demand by adjudicating authority leading to refund, sanctioning of refund claim by Commissioner (Appeals) without unjust enrichment bar.The judgment pertains to the dropping of demand by the adjudicating authority and the consequent refund of Rs. 50,00,000 to the respondents, as well as the sanctioning of the refund claim by the Commissioner (Appeals) without applying the bar of unjust enrichment. The issues revolve around the validity of demanding duty based on a proforma invoice and the applicability of unjust enrichment in the case.The respondents, engaged in Turnkey Projects of erection and commissioning of machinery for sugar plants, faced a show cause notice for demanding differential duty based on a proforma invoice not accepted by buyers. The adjudicating authority found the proforma invoice lacked legal sanctity and dropped the proceedings as no evidence showed receipt of any amount over the transaction value. The Revenue appealed this decision in Appeal No. E/830/2012-Mum.Following the dropping of proceedings, the respondents filed a refund claim of Rs. 50 lakhs, which was deposited during the investigation. The adjudicating authority sanctioned the refund, deposited into the Consumer Welfare Fund, and the Commissioner (Appeals) upheld the refund claim. The Revenue appealed this decision in Appeal No. E/85559/2013-Mum.The Tribunal concurred with the adjudicating authority that demanding duty based on a proforma invoice lacking legal sanctity was not valid, as the buyers did not accept the invoice or make any payment against it. Therefore, the question of demanding differential duty did not arise, leading to the dismissal of Revenue's appeals.Regarding the issue of unjust enrichment, as the respondents did not receive any amount exceeding the transaction value, the Tribunal found no basis for applying unjust enrichment. Consequently, the Revenue's appeals were dismissed, affirming the decisions of the lower authorities.In conclusion, both appeals of the Revenue were dismissed by the Tribunal, emphasizing the lack of merit in the Revenue's arguments and upholding the decisions of the adjudicating authority and the Commissioner (Appeals).*(Pronounced in Court)*