Disputed Amount Paid Under Protest Much After Clearance Of Goods Is Not Covered Under Unjust Enrichment: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that disputed amount paid under protest much after clearance of goods is not covered by unjust enrichment. The Bench of Binu Tamta (Judicial Member) has observed that “once the supplies have already been made, any amount paid thereafter, as tax or deposit, the burden of such amount cannot be passed on to the assessee and, therefore, the test of unjust enrichment is not applicable.” In this case, the assessee/appellant had received Investment Subsidy against Entitlement Certificate sanctioned under the Rajasthan Investment Promotion Policy – 2010, which was adjusted towards payment of VAT and CST in their returns during the period January, 2014 to June, 2015. The assessee had also filed the refund claim for the amount of excise duty paid on VAT by them at their own risk for the subsequent period RG-23 A Part-II Entry No.451. The Adjudicating Authority rejected the refund claim on the ground of limitation. The appeal filed by the assessee was allowed by way of remand observing that the limitation clause of filing refund claim within one year is not applicable. Since the issue of unjust enrichment has not been particularly examined, the case was remanded to the Adjudicating Authority. On remand, the Adjudicating Authority sanctioned the refund claim. Being aggrieved, the Department preferred an appeal before the Commissioner (Appeals) The Commissioner (Appeals) observed that once the amount of tax paid has been booked as “expenses” in Profit & Loss Accounts, it automatically shows that incidence of duty has been passed on to the customers. The assessee has challenged the order passed by the Commissioner (Appeals) before the Tribunal. The assessee submitted that the disputed amount was paid under protest much after the clearance of the impugned goods and the said amount, therefore, is not covered by unjust enrichment. The bench referred to the case of M/s. Chambal Fertilizers and Chemical Vs. Commissioner of Central Excise and CGST, wherein it was noticed that the refund claim was rejected on the ground that the amount deposited was accounted as “expenses” in the Profit and Loss Account of the appellant meaning thereby that the burden of duty has been passed. The Tribunal observed that the issue of excisability of subsidy amount was pending adjudication, and was finally concluded only by the order of the Tribunal, where the period involved was from 2014 – 2015, however, the assessee had deposited further amount of central excise duty on VAT at their own risk and for the subsequent period which the present refund claim has been made. In this regard, it needs to be appreciated that the issue regarding the liability of duty on the subsidy amount was subjudice and the assessee to avoid any enhanced liability on account of non-payment of duty, had paid the said amount, stated the bench. In view of the above, the bench allowed the appeal. Case Title: M/s Oiles India Pvt. Ltd. v. Commissioner of Central Excise CGST Case Number: Excise Appeal No.50314 of 2024 Counsel for Petitioner/ Assessee: B.L. Yadav Counsel for Respondent/ Department: Vishwa Jeet Saharan Click Here To Read/Download The Order

Disputed Amount Paid Under Protest Much After Clearance Of Goods Is Not Covered Under Unjust Enrichment: CESTAT

Mehak Dhiman

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