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2023 (11) TMI 887 - CESTAT ALLAHABADRefund of duty - doctrine of unjust enrichment - duty was paid under compounded levy scheme - Refund was sanctioned but credited to the Consumer Welfare Fund under erstwhile Section 12B of the Central Excise Act, 1944 - HELD THAT:- It is astonishing to note that the department is missing a simple thing to notice that the company was paying excise duty liability on compounding basis i.e. its liability was fixed on the basis of no. of machines. Accordingly, the company was responsible to pay excise duty even if it had not produced a single pouch of scented tobacco jarda or branded chewing jarda as the case may be and if this was so it is beyond comprehension that how the company could take excise duty as component of cost for fixing price as mentioned in the order at several places. Since the company was paying excise duty on compounding basis and none of its part was treated as manufacturing expense therefore, it was deducted directly from Revenue from Operations as per guidelines given under Companies Act 2013. It may be noted that no Chartered Account can change the format of Balance Sheet or Profit and Loss Account as given under Schedule III of Companies Act 2013, and since the format specifically mandates that excise duty paid should be specifically deducted from Revenue from operations, then every Chartered Accountants is bound to follow the same format - the company had to pay excise duty irrespective of sale/production under compounding scheme, therefore, it has correctly debited entire amount to profit and loss account. The refund amount constitutes the entitlement of the company on account of excess excised duty paid and mere change in nomenclature i.e. called pre-deposit or deposited under protest etc. does not change the essence of transaction. Under no circumstance compoundable excise duty can be shown anywhere else but as a reduction from Revenue from Operation. recovery of excise duty is not possible. It is found that there is no set mechanism or opportunity available to the manufacturers working under compounded levy scheme in terms of Section 3A and the Assessee necessarily have to pay the prescribed duty in advance, irrespective of the number of days the machines are operative and irrespective of the quantity of the goods manufactured - the principle of the unjust enrichment, which is ordinarily applicable only on the goods manufactured and removed under the scheme of levy and more appropriately under Section 3 of the Act, the said principle cannot by any logically and economical be justifiable as legally tenable principle be extended to the manufactures working under compounded levy scheme under Section 3A. The impugned order cannot be sustained and is accordingly set aside. The doctrine of unjust enrichment is not applicable to the facts and circumstances of the present case and accordingly it is directed that the refund of Rs.6,95,52,000/- appropriated in favour of the ‘Consumer Welfare Fund’ be credited to the account of the Appellant. Accordingly the appeal filed by the Appellant is allowed.
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