2018 (8) TMI 1331 - AT - Central Excise

Tribunal grants refund to tire manufacturer for excess excise duty paid

The Tribunal ruled in favor of the appellant, a tire manufacturer, allowing the refund of excess excise duty paid on goods sold through a consignment ... Refund of excess Excise Duty paid - refund was rejected on the ground that no excess duty had been paid by the appellant in respect of the excisable goods removed from the factory and sold to the ultimate consumer - unjust enrichment - Held that:- It’s evident that the appellant had paid excess excise duty, than the duty amount actually payable on the goods ultimately sold to the consumers. The invoice and other documents available in the case records, clearly show that the excess duty has been paid by the appellant. Doctrine of unjust enrichment - Held that:- The Chartered Accountant firm in its certificate dated 25.06.2015 has certified that the Balance Sheet maintained by the appellant clearly showed that excise duty has not been claimed from the buyer of the goods and the same has been reflected in “Excise Duty Refund Receivable Account” - the refund claim will not be denied on the ground of doctrine of unjust enrichment. Appeal allowed - decided in favor of appellant. Issues:Refund of excess excise duty paid, applicability of Rule 7 of Central Excise Valuation Rules, doctrine of unjust enrichment.Refund of Excess Excise Duty Paid:The appellant, engaged in manufacturing tyres and tubes, filed a refund application claiming excess excise duty paid when selling goods from its consignment agent's premises. The authorities rejected the refund application, asserting no excess duty was paid. The appellant argued that goods sold through the consignment agent should be governed by Rule 7 of the Central Excise Valuation Rules, making the excess duty paid at the factory gate eligible for refund. The appellant presented invoices showing goods sold at a higher price from the factory than from the consignment agent, supporting its claim for refund.Applicability of Doctrine of Unjust Enrichment:The appellant contended that the doctrine of unjust enrichment did not apply as it had borne the duty incidence without transferring it to any other party. A certificate from a Chartered Accountant firm confirmed that the appellant had not claimed excise duty from the buyer and had reflected it in a specific account. The Tribunal found that the appellant had indeed paid excess excise duty, which was not passed on to the buyer or any other person. Consequently, the Tribunal held that denying the refund claim on the grounds of unjust enrichment would cause financial loss to the appellant, as it had already borne the excess duty.Judgment:After considering the arguments and evidence, the Tribunal concluded that the appellant was entitled to the refund of excess excise duty paid. The Tribunal set aside the impugned order denying the refund benefit, ruling in favor of the appellant and granting the consequential benefit of refund. The judgment highlighted that the appellant had paid excess duty, which had not been passed on to any other party, justifying the refund without invoking the doctrine of unjust enrichment.