Revenue fails to prove unjust enrichment in double duty payment refund case

CESTAT Kolkata dismissed Revenue's appeal regarding refund claim for double duty payment. Appellant issued 559 invoices during January-March 2010 for machinery clearance. Revenue seized invoices and goods but failed to verify with customers or transporters whether goods were actually delivered against original invoices. Appellant was compelled to issue fresh invoices and pay duty again for seized goods. Commissioner(Appeals) correctly sanctioned refund after verifying customer affidavits and gate passes, confirming double duty payment on same goods. Revenue failed to discharge burden of proving unjust enrichment, having conducted no proper enquiry to substantiate their case.

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Issues Involved:
The judgment deals with the issue of whether the respondent has passed the bar of unjust enrichment in a case involving payment of duty twice for the same goods.

Details of the Judgment:

1. Background and Facts:
The respondent, engaged in manufacturing heavy machines and equipment, issued 559 invoices for clearance of goods between January 2010 to March 2010. These goods were seized by the Revenue, and the respondent claimed to have paid duty twice due to the seizure. The matter was remanded to the adjudicating authority to verify unjust enrichment.

2. Department's Argument:
The department contended that the Commissioner(Appeals) exceeded authority by giving observations on a case already adjudicated. They argued that no extra excise duty was self-assessed or paid for the respective months, and no cancellation of invoices was notified, questioning the refund.

3. Respondent's Defense:
The respondent argued that they paid duty twice, supported by documents like Gate Register, Transporter Affidavit, and Customer Affidavit. They claimed the seized goods were later cleared with fresh invoices, justifying the refund.

4. Court's Observation:
The Court noted the lack of verification by the Revenue regarding the clearance of goods against the 559 invoices and the seizure of goods. The Commissioner(Appeals) found evidence supporting the respondent's claim of double duty payment, including affidavits and correlating invoices.

5. Decision and Ruling:
The Court upheld the Commissioner(Appeals)'s decision to sanction the refund, pending verification of unjust enrichment. It was held that the respondent paid duty twice for the same goods, and the appeal by the Revenue was dismissed.

In conclusion, the judgment affirmed the refund claim based on the evidence presented by the respondent, emphasizing the need for verification of unjust enrichment by the adjudicating authority.

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