2016 (11) TMI 236

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....ed on the following substantial question of law: "Whether the excise duty refund arising due to duty paid provisionally at the time of clearance of goods on stock transfer being higher than the excise duty finally assessed because of grant of various discounts through the issue of credit notes is subject to unjust enrichment?" 3.The Appellant is engaged in the manufacture of keyboards, printers and parts thereof. The Appellant follows a regular modus operandi whereunder clearances are effected from factory to branch office at a declared price. The pricing at the time of actual sale from the branch office however could vary from that of the factory price and a provisional assessment was made at the time of clearance from factory in view of....

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.... the component of discount by way of credit notes. 5.The Assessing Authority computed the excess payment of excise duty by the Appellant at a figure of Rs. 9,50,745/-. There is thus no dispute that the appellant has, in fact, remitted excess excise duty which has been duly quantified and determined to be refundable. The Assessing Authority finds, as a fact, that the details of credit note issued have been valued and found to be correct and without any discrepancy. However, the claim of refund was rejected on the ground of possible unjust enrichment. In conclusion, he orders that the refund be paid over to the Consumer Welfare Fund in so far as the Appellant according to him, was not entitled to the same. 6.The Assessment was confirmed in ....

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....und that the quantum of discount was not known prior to the removable of the goods. In an appeal filed by the respondent-assessee, this Court by its judgment dated 11.03.1997 in Addision and Co. Ltd. Vs. Collector of Central Excise, Madras (supra) held that the turnover discount is an admissible deduction. This Court approved the normal practice under which discounts are given and held that the discount is known to the dealer at the time of purchase. The Additional Solicitor General submitted that any credit note that was raised post clearance will not be taken into account for the purpose of a refund by the department. We do not agree with the said submission as it was held by this Court in Union of India vs. Bombay Tyre International (sup....

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....on 11-B (2) of the Act cannot be restricted to the first buyer from the manufacturer. Another submission which remains to be considered is the requirement of verification to be done for the purpose of finding out who ultimately bore the burden of excise duty. It might be difficult to identify who had actually borne the burden but such verification definitely assist the Revenue in finding out whether the manufacturer or buyer who makes an application for refund are being unjustly enriched. If it is not possible to identify the person/persons who have borne the duty, the amount of excise duty collected in excess will remain in the fund which will be utilized for the benefit of the consumers as provided in Section 12-D." 10.This is thus, a ma....