In the case of M/s. Steel Authority of India Limited, the Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the refund claim of excise duty, as the unjust enrichment alleged against the appellant failed to prove.
The Appellant had sold goods (blooms) to its customers, Rail Wheel Factory, Yelanhanka, Bangalore in the month of April 2012 amounting to Rs.24,85,746/- against two invoices dated 28.03.2018 whereby the Appellant erroneously calculated Central Excise duty @ 10.30% instead of 12.36% which was discharged as excise duty in the month of March 2012.
On realizing the bona fide mistake, the Appellant issued two supplementary invoices on 30.04.2012 to recover the differential duty @ 2.06% (i.e. 12.36 % less 10.30%) and inadvertently the Appellant once again paid the entire amount of excise duty @ 12.36% vide debit from Cenvat Credit Register as excise duty for the month of April 2012.
The Appellant made an excess deposit of Central Excise duty amounting to Rs.5,04,393/ andfiled an application for refund of excise duty on 24.04.2013 supported by documentary evidence inclosing the copies of the original invoices, supplementary invoices, payment proofs, Cenvat Credit Register and Certificate issued by Deputy Chief Material Manager, Rail Wheel Factory stating that Rail Wheel Factory did not avail Modvat benefits for the purchase of blooms.
The range Superintendent on verification of Form-ER-1 Returns confirmed that the Appellant had paid the excise duty twice on sales made to Rail Wheel Factory, however, the benefit of refund of such erroneously paid Central Excise duty is being denied on the presumption that the incidence of duty has been passed on by the Appellant to the buyer (Rail Wheel Factory) in terms of Section 12B of Central Excise Act, 1944.
The Commissioner denied the Refund claim of excise duty including education cess amounting to Rs.5,04,393/- on the ground that the appellant failed to prove that the amount of duty has been borne by the Appellant and not passed on to the buyer (Rail Wheel Factory).
It was viewed that the refund claim was not hit by the bar of unjust enrichment as the excess Central Excise duty paid by mistake by the Appellant continues to be borne by the Appellant and has not been passed on to the buyer.
The single-member bench of Shri P K Choudhary, member(judicial) observed that if the assessee has not received the amount from the buyers, it cannot be held, that the Appellant will be unjustly enriched and set aside the impugned order. The Appeal was allowed with consequential relief.
Shri Aakash Agarwal, Chartered Accountant & Shri Rahul Tangri, Advocate appeared for the Appellant and Shri K.Chowdhury, Authorized Representative appeared for the Respondent.
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