2005 (6) TMI 496 - AT - Central Excise

Summary

Issues:
1. Whether the Appellant is authorized to take credit on excess payment detected before the submission of the return.
2. Whether the duty incident was passed on to the ultimate consumer.
3. Application of the bar of 'unjust enrichment' in the case.

Analysis:

Issue 1:
The Appellant argued that they are not authorized to take credit on excess payment detected before the submission of the return, as per the Central Excise Rules. The Commissioner (Appeals) allowed the refund, but the Appellant contended that this was incorrect. Citing judicial pronouncements, the Appellant's representative emphasized that issuing a credit note to a wholesale dealer subsequently does not entitle the assessee for a refund. The Larger Bench decision in the case of Grasim Industries Ltd. v. CCE, Bhopal was relied upon to support this argument.

Issue 2:
The Respondent, supported by the learned Advocate, maintained that the Credit Note was issued without passing on the duty incident to the buyer. The Commissioner of Appeals upheld the appeal based on this argument. Various decisions, such as Shyam Textile Mills & Anr. v. Union of India and SICPA India Ltd. v. CCE, Jaipur, were cited to support the contention that the appeal was rightly allowed.

Issue 3:
The judgment highlighted that the Appellant credited an amount in PLA without proper authority, leading to an excess payment of duty. It was emphasized that the Appellant is not authorized to take credit on such excess payment. The concept of 'unjust enrichment' was deemed applicable even if a credit note representing the Excise Duty amount was issued subsequently. Referring to the case of Grasim Industries Ltd. v. CCE, Bhopal, where the Larger Bench of CEGAT held that the bar of unjust enrichment applies even if a credit note is issued post-clearance, the appeal filed by the Revenue was deemed deserving of being allowed. Consequently, the impugned order was set aside, and the appeal filed by the Revenue was allowed.