2023 (4) TMI 870 - AT - Central Excise

Scope of the order pursuant to remand back of the matter - Refund of Excess Duty paid - goods cleared to their depots on stock transfer basis under Section 4 of the Central Excise Act 1944 - corroborative evidence or not - principles of unjust enrichment - HELD THAT - Admittedly 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 and the original authorities after verification of all the documents have found that the appellant entitled to refund of the excess duty paid by them but the Ld. Commissioner vide the impugned order 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 identical issue was examined by the Tribunal in the case of NAHAR SPG. WVG. MILLS LTD. VERSUS COMMISSIONER OF C. EX. BHOPAL 2009 (2) TMI 677 - CESTAT NEW DELHI wherein after considering the submissions of the department that the appellant failed to co-relate the goods cleared from the factory and removal from the depot and therefore failed to establish that the question of duty has not been passed to any other person - once it is established that the goods were sold from the depot to the customers at a lower price as is the case in the present case then it is clear that the higher duty has not been collected by the appellant and hence there is no unjust enrichment. The Ld. Commissioner (Appeals) has travelled beyond the remand order passed by the Tribunal. In remand order the Ld. Commissioner was only to consider the issue of unjust enrichment whereas the Ld. Commissioner has gone beyond the remand order to hold that Rule 7 of the Central Excise Valuation Rules 2000 has not been followed. The impugned order is not sustainable in law - Appeal allowed.

Summary

Issues Involved:

1. Entitlement to refund of excess central excise duty paid.
2. Examination of unjust enrichment.
3. Compliance with Rule 7 of the Central Excise Valuation Rules, 2000.
4. Consideration of previous refund orders and their finality.
5. Scope of remand order and whether the Commissioner (Appeals) exceeded it.

Summary:

1. Entitlement to Refund of Excess Central Excise Duty Paid:
The appellant, engaged in the manufacture of excisable goods, paid central excise duty on goods cleared to their depots. They filed refund claims for excess duty paid. The Assistant Commissioner sanctioned the refunds, allowing re-credit in the Cenvat credit account. However, the department appealed, and the Commissioner (Appeals) reversed the decision. The Tribunal remanded the matter back to the Commissioner (Appeals) to re-examine evidence related to unjust enrichment.

2. Examination of Unjust Enrichment:
The Tribunal directed the Commissioner (Appeals) to verify that the appellant did not unjustly enrich themselves by recovering the higher duty from buyers. The Commissioner (Appeals) held that the appellant failed to prove that the higher duty was not recovered from buyers. The appellant argued that they sold goods at a lower price from the depot, indicating no unjust enrichment. They relied on Chartered Accountant certificates and previous refund orders to support their claim.

3. Compliance with Rule 7 of the Central Excise Valuation Rules, 2000:
The Commissioner (Appeals) held that Rule 7 was not followed. However, the Tribunal found that the original authorities verified documents and found the appellant entitled to refunds. The Tribunal cited the Nahar Spg. & Wvg. Mills Ltd. case, emphasizing that the depot price at the time of removal from the factory is relevant for assessment and unjust enrichment.

4. Consideration of Previous Refund Orders and Their Finality:
The appellant highlighted that refunds for previous periods were granted and attained finality. The Tribunal agreed that the department cannot take a contrary stand in proceedings on the same issue for the same assessee.

5. Scope of Remand Order and Whether the Commissioner (Appeals) Exceeded It:
The Tribunal noted that the Commissioner (Appeals) exceeded the scope of the remand order by addressing Rule 7 compliance instead of focusing solely on unjust enrichment. The Tribunal cited the Kodak India Ltd. case, stating that lower authorities cannot travel beyond the remand order.

Conclusion:
The Tribunal found that the appellant proved no unjust enrichment and that the Commissioner (Appeals) exceeded the remand order's scope. Consequently, the impugned order was set aside, and the appeals were allowed with consequential relief.