TaxTMI 
TaxTMI 
TaxTMI 
In case of inter-unit stock transfer of intermediate goods, doctrine of unjust enrichment would not apply
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....n case of inter-unit stock transfer of intermediate goods, doctrine of unjust enrichment would not apply<br>By: - Bimal jain<br>Central Excise<br>Dated:- 10-2-2015<br><br>Dear Professional Colleague, In case of inter-unit 'stock transfer' of intermediate goods, doctrine of unjust enrichment would not apply We are sharing with you an important judgment of Hon'ble CESTAT, New Delhi, in the....
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.... case of Bhansali Engg. Polymers Ltd. Vs. Commissioner of Central Excise and Service Tax, Bhopal [2015 (1) TMI 409 - CESTAT NEW DELHI] on the following issue: Issue: Whether the 'Doctrine of Unjust Enrichment' can be applied in of inter-unit 'stock transfer' of intermediate goods? Facts and background: Bhansali Engg. Polymers Ltd. ("the Appellant") manufactured Acrylonitrile Butadiene ....
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....Styrene Polymers ("Final Product") at its two unit located at Satnoor, Madhya Pradesh ("Satnoor unit") and Abu Road, Rajasthan ("Abu Road unit"). In course of manufacture of Final Product, two intermediate products namely HRG Powder and E-SAN Powder ("Intermediate Products") arose which were captively used. During the month of November 2011, there was some break down in Abu Road unit, as a result....
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.... of which Intermediate Products could not be manufactured there. Therefore, during November 2011, Abu Road unit received Intermediate Products from Satnoor Unit on stock transfer basis on payment of Excise duty under invoices. This transaction was assessed provisionally as the assessable value was to be determined in terms of Rule 8 of the Central Excise Valuation Rules, 2000 on the basis of the c....
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....ost of production and it was not possible to determine the cost of production exactly at that time. Later, in the final assessment it was ascertained that the duty finally assessed was less than the duty paid on provisional basis, therefore the Appellant filed six refund claims which were allowed by the Deputy Commissioner with the finding that unjust enrichment was not involved. Being aggrieved....
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.... the Revenue preferred an appeal before the Hon'ble Commissioner (Appeals) wherein the refund claims were rejected. Aggrieved by the order of the Commissioner (Appeals), the Appellant preferred an appeal before the Hon'ble CESTAT, Delhi. Held: The Hon'ble CESTAT, Delhi after observing that the Abu Road unit had reversed the Cenvat credit taken to the extent of refund filed, held that although Sa....
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....tnoor unit had cleared Intermediate Products on payment of Excise duty, wherein the price of Intermediate Products and the duty had been separately mentioned in invoices, but such clearances were on stock transfer basis and not on sale. When the clearances were not on sale but were purely on stock transfer basis, there is no question of Satnoor unit having recovered the incidence of duty from Abu ....
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....Road unit and, as such, the bar of unjust enrichment would not apply. It was further held that it is neither the Department's claim nor any evidence produced to show that during November 2011, the price charged by Abu Road unit for Final Product was higher. Hence, the doctrine of unjust enrichment is not applicable in the instant case. Hope the information will assist you in your Professional en....
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....deavors. In case of any query/ information, please do not hesitate to write back to us. Thanks and Best Regards, Bimal Jain FCA, FCS, LLB, B.Com (Hons) Delhi: Flat No. 34B, Ground Floor, Pocket - 1, Mayur Vihar, Phase - I, Delhi - 110091, India Desktel: +91-11-22757595/ 42427056 Mobile: +91 9810604563 Chandigarh: H. No. 908, Sector 12-A, Panchkula, Haryana - 134115 Kolkata: Ist Floo....
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....r, 10 R G Kar Road Shyambazar, Kolkata - 700 004 Email: [email protected] Web: www.a2ztaxcorp.com Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in thi....
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....s document nor for any actions taken in reliance thereon. Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commerc....
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....ial use) without our written permission.<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....