2002 (9) TMI 359 - AT - Central Excise

Summary

Issues:
The issues involved in this case pertain to a refund claim based on the interpretation of the period for concessional duty rate eligibility and the application of the principle of unjust enrichment.

Refund Claim Issue:
The appeal concerns a refund claim for the differential duty amounting to Rs. 47,59,801/- based on a concessional rate of duty for paper manufacturers. The dispute arose from differing interpretations of the five-year eligibility period for the concessional rate, with the Department contending it started from the date of first clearance and the appellants arguing it commenced from the date of the relevant notification. The Tribunal allowed the appeal, directing refund for the period in question, which was within the five-year timeframe specified in the notification. The Supreme Court upheld this decision, dismissing the Revenue's appeal against it.

Unjust Enrichment Issue:
The second issue revolves around the principle of unjust enrichment in relation to the refund claim. The Department sought to reject the refund claim on grounds of unjust enrichment, alleging insufficient evidence that the duty burden was not passed on to customers. The appellants argued that since the price remained constant and the duty was not separately indicated on invoices, the burden of proof regarding passing on the duty to customers was discharged. Citing precedents where similar situations led to refund claims being allowed, the appellants contended that unjust enrichment did not apply in this case. The Tribunal and Supreme Court decisions supported this argument, leading to the appeal being allowed on its merits.

In conclusion, the Tribunal allowed the appeal on both the refund claim issue and the unjust enrichment issue, finding in favor of the appellants based on the evidence presented regarding the duty burden not being passed on to customers.