Clipped from: https://www.taxscan.in/no-unjust-enrichment-when-goods-sold-to-customer-at-lower-price-cestat/272506/
The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no scope for unjust enrichment when goods are sold to customers at lower prices.
Carrier Air Conditioning and Refrigeration Ltd, the appellant engaged in the manufacture of excisable goods i.e. Air Conditioners, Chillers and parts thereof. They were paying central excise duty on their products, cleared to their depots on a stock transfer basis under Section 4 of the Central Excise Act, 1944. They filed refund claims for Rs. 7,01,241/- and 6,11,387/-.
The Assistant Commissioner sanctioned both the refunds in favour of the appellant vide order-in-original dated 18.12.2007 and 14.01.2008 respectively and allowed re-credit of these amounts in the cenvat credit account of the appellant.
The Tribunal reduced the litigation to a narrow compass of examining evidence to test the unjust enrichment only. Under the order of the Tribunal, Commissioner (Appeals) allowed the Revenue’s appeal vide impugned order dated 31.08.2009.
It was evident that the appellant has paid duty at a higher value while clearing the goods from the factory to the depots and the said goods were sold to the customers at a lower price the original authorities after verification of all the documents have found that the appellant entitled to a refund of the excess duty paid by them.
The Commissioner has accepted the appeal of the department by holding that the appellant has failed to prove that the higher duty paid by them has not been recovered from their buyer. The Commissioner (Appeals) set aside the adjudication order, holding that the appellants failed.
It was observed that once it is established that the goods were sold from the depot to the customers at a lower price then the higher duty has not been collected by the appellant and hence there is no unjust enrichment.
The CESTAT viewed that the Commissioner (Appeals) has not given any credence to the certificates issued by the chartered accountant wherein the chartered accountant has stated that they have verified the entire books of accounts which reveal that the excess duty at the time of clearance, which was paid has not been passed on to the customers.
The original authority while granting the refund has verified all the documents as recorded by them in the order-in original granting the refund and in the absence of any contrary evidence, the department cannot possibly say that the bar of unjust enrichment has not been passed by the appellant.
While allowing the appeal, the two-member bench comprising Mr S S Garg, (Judicial) and Mr P Anjani Kumar, (Technical) set aside the impugned order.To Read the full text of the Order CLICK HERE
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Carrier Air Conditioning and Refrigeration Ltd. vs Commissioner of Central Excise
CITATION: 2023 TAXSCAN (CESTAT) 442
Counsel for Appellant: Ms. Krati Singh
Counsel for Respondent: Shri Manoj Nayyar and Ms. Geetika
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