2023 (2) TMI 1225 - AT - Central Excise

Excess duty refund allowed after revenue wrongly rejected claim citing unjust enrichment principles

CESTAT Mumbai allowed the appeal for refund of excess duty paid. The revenue authorities had rejected the refund claim citing unjust enrichment principles ... Refund of excess duty paid - rejection on the ground of being hit by the principles of unjust enrichment - the amount ordered to be credited to consumer welfare fund. HELD THAT:- As the issue has been considered by the revenue authorities for the past and previous period in the appellant own case on the identical issue and allowed in favour of the appellant and the orders have been accepted by the same principles should be adopted in the present case in view of the decision in NAHAR SPG. & WVG. MILLS LTD. VERSUS COMMISSIONER OF C. EX., BHOPAL [2009 (2) TMI 677 - CESTAT, NEW DELHI] where it was held that the appellants fulfilled the conditions of unjust enrichment by showing that the depot price prevailing at the relevant time. The appellants submitted that at the time of verification of the sales invoices raised ex C & F Depot for finalization of provisional assessments, it has been verified by the verifying officer the sales invoices raised ex C & F depots do not show the duty element separately. In case of N G Thakkar [2012 (3) TMI 248 - BOMBAY HIGH COURT] it has been held that the decisions of the lower appellate authorities that the duty element has not been passed on to the customers is based on verification of the evidence adduced by the assessee. Following the above decision and the fact that issue has been decided by the revenue authorities themselves in similar circumstances in the appellant own case, no merits found in the impugned order - appeal allowed. Issues:Refund claim hit by unjust enrichment principles.Analysis:The appeal challenges the Order-In-Appeal upholding the rejection of a refund claim by the original authority due to unjust enrichment, directing the amount to be credited to the Consumer Welfare Fund. The appellants, dealing in excisable goods, opted for provisional assessment due to the inability to determine the correct value at clearance. Finalization of provisional assessments for April 2010 to March 2011 revealed an excess duty payment of Rs. 29,61,965, leading to a refund claim. The Assistant Commissioner sanctioned the claim but directed the amount to the Consumer Welfare Fund, a decision upheld by the Commissioner (Appeals).The appellant argued that past and subsequent periods saw similar issues decided in their favor, invoking the principle of res judicata for a favorable decision. The revenue authorities had accepted refund claims for other periods based on similar grounds, as evidenced by various orders and judgments. The appellant cited legal precedents such as Birla Corporation Ltd., Jain Vanguard Polybutlene Ltd, and Sunbel Alloys Co. of India Ltd to support their case.The Tribunal reviewed the impugned order, noting the consistent decisions in favor of the appellant in similar cases. Citing Nahar Spinning and Weaving Mills Ltd., the Tribunal emphasized that the burden of proof regarding unjust enrichment was adequately addressed by the appellants. The verification of sales invoices supported the claim that duty elements were not passed on to consumers, aligning with legal principles established in previous cases like N G Thakkar and Commissioner of Customs, New Delhi v/s. Organan (India) Ltd.Based on the evidence presented and the precedents cited, the Tribunal allowed the appeal, emphasizing the lack of merit in the original rejection of the refund claim. The decision was pronounced in open court, favoring the appellant and overturning the previous orders regarding the refund claim.