Tribunal rules in favor of sugar-free granule manufacturers in refund claim case involving unjust enrichment.

The tribunal allowed the appeal in favor of the appellants, manufacturers of sugar-free granules, in a case where a refund claim was rejected on grounds of unjust enrichment. The buyers issued debit notes to adjust the excess duty paid, which was not received by them. Citing legal precedents, the tribunal held that the issuance of debit notes in such circumstances does not amount to unjust enrichment, as the property had already passed to the buyers upon supply of goods. The tribunal set aside the refund claim rejection and granted relief to the appellants.

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Issues:
Refund claim rejection on grounds of unjust enrichment.

Analysis:
The appellants, manufacturers of sugar-free granules, mistakenly paid duty on the higher side in a consignment to M/s. Cadila Healthcare Limited. The buyers refused to pay the excess amount, issuing debit notes instead. The refund claim was denied citing unjust enrichment. The advocate argued that since the amount on invoices was never received, debit notes were issued to adjust the billing. Citing a High Court case, it was noted that once goods are supplied, the property passes to the purchaser, and the price is reduced by debit and credit notes. Another decision emphasized that issuance of debit notes where the buyer has not paid does not indicate unjust enrichment. The tribunal, in line with established law, set aside the order and allowed the appeal, providing relief to the appellants.

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