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2026 Supreme(Online)(CESTAT) 2374
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Ashok Jindal, Judicial Member, K. Anpazhakan, Technical Member
Commissioner of Central GST & Central Excise – Appellant
Versus
Eastern Coalfields Ltd. – Respondent
Excise (Cross) Application No. 76842 of 2019 | Excise Appeal No. 76590 of 2019
For the Appellants/Petitioners: S. K. Dikshit
For the Respondents: Sanjay Dixit
A refund claim cannot be denied under the principle of unjust enrichment if the claimant provides substantiating evidence, such as audited balance sheets and Chartered Accountant certificates, proving that the incidence of excess excise duty paid was absorbed by the assessee and not passed on to third parties.
Headnote:(A) Central Excise Act, 1944 - Section 11B - Refund claim - Unjust enrichment - Burden of proof.
(B) The principle of unjust enrichment requires that the claimant must establish that the burden of duty has not been passed on to any other person. Substantial evidence in the form of Chartered Accountant certificates, audited balance sheets, and internal reconciliations is sufficient to overcome the presumption under Section 12B of the Central Excise Act. (Paras 6(vi), 6(vii), 6(viii)).
Facts of the case:
The assessee filed a refund claim for excess excise duty paid inadvertently on performance incentives. The adjudicating authority rejected the claim primarily on the ground of unjust enrichment, alleging insufficient documentary proof that the tax burden was not passed on to customers. The Commissioner (Appeals) reversed this decision after examining detailed financial records and certificates.
Findings of Court:
The Appellate Tribunal found that the assessee provided comprehensive documentary evidence, including CA-certified statements, audited accounts, and reconciliation of excise returns, which sufficiently corroborated the claim that the duty was absorbed by the assessee and not passed on.
Issues: Whether the assessee successfully discharged the burden of proof to overcome the bar of unjust enrichment under Section 11B of the Central Excise Act, 1944.
Ratio Decidendi: If an assessee proves through authenticated accounting records and certification that the duty incidence was absorbed rather than passed on to customers, the refund cannot be denied under the principle of unjust enrichment.
Result: Appeal dismissed; refund confirmed.
Order: [
PER SHRI ASHOK JINDAL]
The Revenue is in appeal against the impugned order.
The facts of the case are as under: -
“In the instant case a Show Notice under No. V(18)18/Refund/ECL/KLT/ASN-III/16-17/722 dt. 11.04.2017 was issued against M/s Eastern Coalfields Ltd., (A subsidiary of Coal India Ltd.), holder of Central Excise Registration No. AAACE7590EEM001 alleging that they have contravened the provisions of Section 11B of Central Excise Act ’44 read with para 2.4 of Chapter 9 of CBEC’s Excise Manual of Supplementary Instructions, in as much as the said assessee have filed an online refund claim of an amount of Rs. 2,49,49,131/- dated 16.01.2017 on the ground of payment of inadvertent excess of debit of Central Excise duty in the month of March ’16. It is noticed that the said claim is not supported by documentary evidence to establish the fact that incidence of excess payment of duty, claimed as refund in their refund application, has not been passed on to other persons.It was also further noticed that the documents submitted by the assessee appeared to be improper and insufficient to substantiate the said claim and hence the assessee’s claim of refund of duty of Rs. 2,49,49,131/- appears to be untenable & hit by the bar of unjust enrichment. Thus, the total refund claim of Rs. 2,49,49,131/- of the assessee appears to be in contravention of Section 11B of the Central Excise Act’44 and hence appears to be inadmissible.
The adjudicating authority finds that the assessee failed to produce documents evidencing that incidence of duty had not been passed on to the other persons. Section 12B of the CEA, 1944 provides that every person who has paid the duty of excise on any goods under this Act shall unless the contrary is proved by him be deemed to have passed on the full incidence of such duty to the buyer of such goods.
Accordingly, the Adjudicating authority vide Order In Original No. 09/Ref/ECL/ASN-II/17-18/Central Tax dated 04.12.2017 has rejected the refund claim of Rs.2,49,49,131/- under the provisions of Section 11B of the Central Excise Act, 1944.
Being aggrieved, the assessee has filed the appeal before the Commissioner of Siliguri Appeal Commissionerate. The Appeal Commissioner vide his order under O-I-A No. 470/SLG-CE/2018-19 dated 22.03.2019 allowed the appeal by way of reliance on the Chartered Accountant’s Certificate, balance sheet and letter of the official of the company and held that the appellant has established that the amount of duty of excise paid on such duty in relation to which such refund is claimed was paid by them and the incidence of such duty had not been passed on by them to any other person which makes them entitled to the claim of refund. Accordingly, the appellant authority allowed the appeal filed by the appellant and rejected the impugned order passed by the adjudicating authority.”
Against the said order, the Revenue is in appeal before us.
The main ground of the Revenue to file this appeal is that the respondent has not provided the relevant documents to show that the bar of unjust enrichment has been cleared by the appellant; and therefore, the impugned order is to be set aside.
Heard the Ld. Authorized Representative of the Revenue, considered the submissions and also examined the impugned order.
We find that in the impugned order, the Ld. Commissioner (Appeals) has recorded that the respondent has filed documents and written submissions. The documents, namely: -
(a) Balance Sheet of M/s. Eastern Coalfields Ltd. (consolidated) and Balance Sheet of Kolkata Sales Office, a unit of M/s. Eastern Coalfields Ltd., for the year 2015-16;
(b) Certificate from Chartered Accountant regarding inclusion of refund receivable amounting to Rs.2.49 crore in the Books of Accounts of ECL and Kolkata Sales Office;
(c) Details of Item No. 7C of ER-1 for the month of March, 2016 duly certified by the Senior Manager;
(d) Certificate regarding non-issue of invoices to other parties on Performance Incentive, ex
