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Visaka Industries Ltd. Versus Commissioner of C. Ex., Bangalore-II

2016 (2) TMI 586 - CESTAT BANGALORE

Rejection of refund claim on the point of unjust enrichment - Held that:- It is for the first time that when the appeal was filed before Commissioner (Appeals) against the rejection of the refund claim vide adjudication order passed in de novo proceedings that Commissioner (Appeals) examined the refund claim on merits. Though as find acceptance in the reasononings of Commissioner (Appeals) that when the quantitative discounts were not known at the time of removal of the goods and the duty was pa .....

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the show-cause notice, amounts to going beyond the show-cause notice. Not only that when the matter was addressed by the Tribunal for the first time, Revenue never raised the issue that the refund claim is not admissible even otherwise. The matter was argued only on the issue of unjust enrichment. As such, fully agree that rejection of refund claim on merits by Commissioner (Appeals) is not proper and legal.

It is not disputed that the appellant has given quantitative discounts to th .....

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rder No. 21275/2015 - Dated:- 5-6-2015 - Ms. Archana Wadhwa, Member (J) Shri S.R. Madhavamurthy, Advocate, for the Appellant. Shri R. Gurunathan, Additional Commissioner (AR), for the Respondent. ORDER After hearing both the sides, I find that the appellants, who are engaged in the manufactured of asbestos cement products falling under Chapter 68 of the Central Excise Tariff Act, 1985, filed refund claim of ₹ 79,333/- for the period March, 2006 to July, 2006 on the ground that the duty ori .....

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ate customers. 2. The said order of the original adjudicating authority was upheld by Commissioner (Appeals). Thereafter an appeal was filed before Tribunal, who vide their Final Order No. 939/2009, dated 13-5-2009 took note of various decisions of the Tribunal and observed that there is no requirement to establish that the discount has reached the ultimate customers. As long as the persons who purchased the goods from the manufacturer have been given credit notes, the same would suffice th .....

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rejected the refund claim on the sole ground that the distributors are further selling the goods to the final consumer and there is no proof on record to show that the final consumer has been extended the benefit of low rate of duty. The said order of the Assistant Commissioner was impugned before Commissioner (Appeals), who upheld the same on the ground that the quantitative discounts offered by the appellant to the distributor subsequent to the sale of the goods cannot be allowed as deduction .....

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ontention of the learned advocate is that Commissioner (Appeals) has rejected their appeal on merits and on the ground which was not the subject matter of the show cause notice. The proceedings out of the show-cause notice had travelled upto the Tribunal, when the matter was remanded only on the point of unjust enrichment and Commissioner (Appeals) has no jurisdiction to go beyond the scope of such proceedings and to reject the claim on altogether new issue. As regards unjust enrichment, he subm .....

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or not. For the said proposition, he relies upon the Hon ble High Court of Madras decision in the case of Addison & Co. v. CCE, Madras [2001 (129) E.L.T. 44 (Mad.)]. He also submitted that such credit notes were issued to the distributor before the sale of the goods by the distributor to the ultimate customers. As such, he pleaded that the refund cannot be held to be hit by the bar of limitation. 6. Learned DR appearing for the Revenue reiterated the reasoning of the authorities below. .....

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the lower authorities with directions to reconsider the issue of unjust enrichment based upon the declaration of law by various courts. The original adjudicating authority rejected the refund claim, in de novo proceedings on the basis of unjust enrichment only. 8. It is for the first time that when the appeal was filed before Commissioner (Appeals) against the rejection of the refund claim vide adjudication order passed in de novo proceedings that Commissioner (Appeals) examined the refund .....

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roduction of the same, for the first time, by Commissioner (Appeals), while deciding the remand proceedings, cannot be appreciated. Taking up the matter on merits, which were not subject matter of the show-cause notice, amounts to going beyond the show-cause notice. Not only that when the matter was addressed by the Tribunal for the first time, Revenue never raised the issue that the refund claim is not admissible even otherwise. The matter was argued only on the issue of unjust enrichment. As s .....

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