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2019 (8) TMI 526 - AT - Central ExciseRefund - amount debited to profit and loss account as expense - principles of unjust enrichment - Availment and reversal of CENVAT Credit, which was subsequently held to be admissible credit - mismatch of weight in the paper used for covering copper strips manufactured by it and papers purchased by it which was in excess of its output -HELD THAT:- The finding of the Commissioner (Appeals) that appellant has not passed the test of unjust enrichment is based on the fact that appellant had charged the amount paid towards interest to its “Profit & Loss Account” in its financial statement under sub-heading “interest and others” and it had admitted that it had considered interest component for pricing purpose of the final products. While according to my approval to such test to be applied to refund of interest paid prior to 2008 as per the ratio of Mafathlal case, I failed to agree with the Commissioner (Appeals) that only by showing the amount in the ‘Profit & Loss Account’ as expenditure toward interest payment, cost of the product cannot go up by itself unless it is specifically infused for the said purpose. Further no statement of the appellant or its representative is found on record to establish that payment made towards interest had been absorbed in the cost component of the final product. In the instant case appellant had justified on record as to why the same amount has been shown in the Profit & Loss account whereby Appellant Company’s profit was proportionately reduced - the incidence of duty as interest paid has not been passed by the appellant to any other person to bring the case into the purview of unjust enrichment. The Appellant is entitled to get refund of ₹ 11,45,295/- along with applicable interest calculated from 3 months after filing of refund application on dated 25-09-2008, as per explanation appended to Sec – 11 BB of the Central Excise Act and the respondent Department is directed to pay the same to the appellant within 3 months from receipt of the order - appeal allowed.
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