2002 (10) TMI 480 - AT - Central Excise

Summary

Issues:
The appeal against the rejection of the refund claim by the appellants.

Summary:
The appellants, engaged in manufacturing calcium carbide and acetylene black, filed an appeal against the rejection of their refund claim. The dispute arose when the Revenue Department informed them that their input, calcium carbide, was excisable. The Assistant Collector initially classified the goods under Tariff Item 14AA, but this decision was set aside for fresh consideration. Subsequently, the Assistant Collector held that calcium carbide was not excisable, leading the appellants to seek a refund of duty paid under protest from April 1978 to May 1983.

The Commissioner (Appeals) allowed the refund, but the Tribunal remanded the matter citing the doctrine of unjust enrichment. The Commissioner (Appeals) then rejected the refund claim based on unjust enrichment. The appellants argued that the duty was paid under protest, assessments were provisional, and evidence showed no passing on of duty to buyers. The Tribunal noted that duty paid under protest is not subject to unjust enrichment, citing legal precedents.

The assessments during the disputed period were provisional until the final decision by the Assistant Collector. The doctrine of unjust enrichment does not apply post-finalization of provisional assessments. The appellants provided evidence that the duty incidence was not passed on to buyers, supported by certificates and financial records. The Tribunal found no grounds to reject this evidence and ruled in favor of the appellants, granting them the refund.

In conclusion, the Tribunal set aside the Commissioner (Appeals) order, stating that the refund claim was not subject to unjust enrichment. The appellants were entitled to the refund amount, as the evidence showed no passing on of duty to consumers.