The Commissioner Goods And Services Tax Commissionerate vs. Gawar Construction Limited

Held

The Court held that the Tribunal rightly found that an exemption notification does not preclude a refund of wrongly paid duty. Regarding the plea of bar of jurisdiction and incompetent authority, the Tribunal noted that the assessee's initial application to the Director General of Foreign Trade, though to a wrong forum, demonstrated they were not acquiescent regarding their claim. Concerning unjust enrichment, the Tribunal found that the respondent-assessee had submitted a certificate from a Chartered Accountant attesting that the paid duty was borne by the assessee and not passed on. The Court rejected the Revenue's argument that this finding was wrongly discarded, noting that the Assistant Commissioner's rejection was based on a presumptive finding that the duty must have been passed on due to its percentage, in the face of evidence from the assessee and lack of evidence from the Revenue. Consequently, the Court found no substantial question of law arising and dismissed the appeal.

Facts

The respondent, Gawar Construction Limited, was executing a project that qualified for exemption under Notification No. 108/95, dated 28.08.1995, which exempts goods supplied to the UN or an International Organization, subject to conditions. The respondent purchased Bitumen, and since the manufacturers were unaware of its end-use, they charged excise duty, which the respondent paid. The respondent then applied for a refund of this wrongly paid duty. The Assistant Commissioner rejected the refund claim, citing that the notification provided only for exemption and not refund, that the claim was time-barred, and that it was hit by the doctrine of unjust enrichment. The Tribunal allowed the respondent's appeal, setting aside the Revenue's order.

Key Issues

1. Whether the CESTAT's order is legally correct in admitting a refund claim for Central Excise Duty paid on exempted goods when the conditions for exemption were not fulfilled by the claimant? 2. Whether exemption could be available post-facto when there is no provision or procedure for it in the exemption notification? 3. Whether the refund claim was under proper jurisdiction and not barred by the time limit? 4. Whether the claimant, in the absence of evidence, passed the test of unjust enrichment as mandated by the Supreme Court in M/s Mafatlal Industries? 5. Whether the impugned order passed by the Tribunal is justified and in accordance with law? Contentions: Petitioner (Revenue): Argued that the Tribunal wrongly discarded the finding of unjust enrichment. The Assistant Commissioner had rejected the claim, holding that given the excise duty rate of 12.36%, the assessee must have passed on the burden to the purchaser. Respondent (Gawar Construction Limited): The Tribunal found that a mere exemption notification does not bar a refund of wrongly paid duty. Regarding jurisdiction and time bar, the Tribunal noted the assessee's application to the Director General of Foreign Trade, indicating they were not acquiescent. For unjust enrichment, the assessee provided a Chartered Accountant's certificate stating the duty was borne by them and not passed on.