2016 (12) TMI 900 - AT - Central Excise

Supreme Court rules in favor of Telephone Equipment manufacturer in refund claim appeal

The Supreme Court allowed the appellant's appeal against the rejection of a refund claim based on unjust enrichment. The appellant, a Telephone Equipment ... Rejection of refund claim - unjust enrichment - Held that: - I find from the grounds of appeal that the appellant have specifically mentioned that they have raised total bill amounts as per the Invoices for the period in question amounting to ₹ 31,11,678/against which their buyer only paid an amount of ₹ 29,33,866/-. Thus there a apparent difference of amount not received ₹ 1,77,812/- which is the amount claimed as refund. In view of the arithmetical data given by the appellant, it appears that there are been failure by the courts below to examine the evidence, that is the books of account and ledgers of the appellant Accordingly for the extending substantial justice to the appellant, I set aside the impugned order and remit the matter back to the Adjudicating Authority with direction to call for and examine the Ledger and Books of Accounts f including the Balance Sheets, along with Certificate from Chartered Accountant. If the amount is still lying outstanding and or receivable in the books of accounts, in that case it cannot be said that the appellant have received the amount from its buyers, attracting the provisions of unjust enrichment. The Appellant is also directed to appear before the adjudicating authority within a period of 60 days from the date of receipt of a copy of this order and seek an opportunity of hearing - appeal allowed by way of remand. Issues:Appeal against rejection of refund claim on grounds of unjust enrichment.Analysis:The appellant, a manufacturer of Telephone Equipment, had cleared goods under section 4A of the Central Excise Act 1944. The revenue demanded differential duty and the appellant paid under protest. The Tribunal and Supreme Court ruled in favor of the appellant. The appellant claimed a refund of excess duty paid, which was rejected on grounds of unjust enrichment by the Assistant Commissioner. The appellant contended that they had not collected the differential duty from buyers. The Commissioner (Appeals) upheld the rejection due to lack of documentary evidence. The appellant failed to appear for the appeal, leading to an ex-parte disposal. The appellant provided evidence of the difference in bill amounts received and paid by buyers, indicating the claimed refund amount. The Tribunal found a failure to examine the appellant's books of account and directed the Adjudicating Authority to review them, along with a Chartered Accountant's certificate, within 60 days. If the amount remains outstanding in the accounts, unjust enrichment cannot be established, allowing the appellant an opportunity for a hearing.The judgment allowed the appeal by way of remand, emphasizing the need to examine the appellant's financial records to determine unjust enrichment accurately.