2023 (4) TMI 658 - AT - Central Excise

CESTAT overturns refund rejection based on unjust enrichment, directs examination of supporting documents

The Appellate Tribunal CESTAT NEW DELHI allowed the appeal challenging the rejection of a refund by the Assistant Commissioner on the grounds of unjust ... Refund claim - principles of unjust enrichment - both the lower authorities rejected the refund holding that the appellant had not discharged its responsibility to show that it had not passed on the burden of the excise duty to any other person - HELD THAT:- Learned counsel for the appellant produced, a Chartered Accountant’s certificate by Ravindra Rathi & Co. dated 20.3.2023. However, there are no supporting documents such as the P&L Accounts and Balance sheets to this certificate. The first paragraph of the certificate indicates that the ‘principal manufacturer and the sole selling agent will not reimburse/charge any amount on account of excise duty’. The second paragraph indicates that the appellant charged excise duty from the Sole selling Agent. The third paragraph indicates that excise duty has neither been charged nor collected by the appellant - It is not clear from the above certificate ‘if the appellant charged excise duty’ as mentioned in the second paragraph of the certificate or ‘it had not collected or charged from anyone in the market’ as indicated in the third paragraph of the certificate. There are no supporting documents with this certificate which may help clear this ambiguity. This certificate was not even produced by the appellant before the lower authorities and it has just been issued by the Chartered Accountant after the impugned order was passed. The lower authorities should have an opportunity to examine this certificate and supporting documents, if any, that the appellant can produce and decide if the appellant had passed on the burden of excise duty on to anyone else or not - the matter is remanded to the original authority to examine the CA certificate dated 20.3.2023 along with any supporting documents which the appellant may produce and decide the matter after giving an opportunity to the appellant to present its case. The appeal is allowed by way of remand to the original authority. Issues:The appeal challenges the rejection of a refund by the Assistant Commissioner on the grounds of unjust enrichment, with the key dispute being whether the appellant had passed on the burden of excise duty to another party.Summary:The Appellate Tribunal CESTAT NEW DELHI heard the appeal concerning the rejection of a refund by the Assistant Commissioner on the basis of unjust enrichment. Both lower authorities had denied the refund, asserting that the appellant failed to demonstrate that it had not transferred the burden of the excise duty to any other entity. The Tribunal acknowledged that the appellant had paid the duty under protest and that the issue was not about the merits of the refund claim or the limitation. The Revenue representative conceded that rejecting the refund based on unjust enrichment was incorrect. The appellant presented a Chartered Accountant's certificate stating that the principal manufacturer and sole selling agent did not charge or reimburse excise duty, but the certificate lacked supporting documents like P&L accounts and balance sheets. The Tribunal noted ambiguity in the certificate regarding whether the appellant had charged excise duty to the sole selling agent or not collected it from the market. As the certificate was not submitted to the lower authorities and was issued after the impugned order, the Tribunal remanded the matter to allow examination of the certificate and any supporting documents. It emphasized that even if the duty burden was passed on, the refund should be granted and credited to the Consumer Welfare Fund. Therefore, the impugned order was set aside, and the appeal was allowed for remand to the original authority for further evaluation.[Order pronounced on 13. 04. 2023]